What is a CFO of the Future? And what can finance executives do now to become a CFO of the Future?
These two questions have underpinned the research and ideation at the CFO of the Future Summit, held annually at Harvard University. The Summit brings together current chief financial officers, faculty and researchers, and select subject-matter experts to envision and chart a path for the future of financial operations and firm growth.
As CFOs and financial executives at the Summit have reflected on their role in the world, they’re experiencing profound change now, as well as seeing shifts on the horizon. In fact, over the past three years of the CFO of the Future Summit, and average of 71% of attendees said they have experienced “significant or extreme change” in their operating environment over the past five years, and 86% anticipate even more change over the next five years.
Attendees that said they have experienced “significant or extreme change”
Attendees that anticipate even more change over the next five years.
This level of change – driven by massive social, economic, and technological shifts – is moving CFOs to relook at the core strategies, competencies, and activities they focus on. This reflection and anticipation have made it clear that the CFO of the Future has to not only protect and drive firm value, but also create and harness new business models and forms of value. As Tracey Travis, CFO of Estee Lauder Companies and member of the Summit Executive Leadership Group framed; “In finance, rather than creating static reports to look at trends, it’s about our ability to help the organization be more predictive in what’s trending and determine what response we can develop to generate new value from that. We have to create more real-time dashboards, understand what’s happening, and be ready to capitalize on that.”
Essentially, the CFO role is changing, and a consistent theme in the Summit is the need for chief financial officers to work hand-in-hand with their chief executive officer to transform their enterprise. As Dr. Christian Campagna, senior managing director for CFO & Enterprise Value at Accenture Strategy, advised during the Summit, “The CFO and the CEO must see the whole enterprise, as it’s only these two that feel the pain when something somewhere is not headed in the right direction. Together, they need to design the future.”
Designing the future hasn’t historically been a focus for CFOs, who traditionally have aimed their attention at retrospective analysis and financial forecasting. Designing and transforming the enterprise requires CFOs to foster “adaptive capacity,” a concept Dr. Antonio Oftelie, fellow at Harvard and Summit faculty chair, defines as “the ability for an organization to strategically fit its structures, capabilities, and resources to the demands of an evolving environment.”
Leaning into this adaptive challenge means that CFOs of the Future navigate and harmonize three focal areas:
Putting all the pieces together requires creativity, vision, and reach. As Summit speaker Jeff Campbell, CFO of American Express, advocated; “The role of the CFO of the future – the role of the finance organization – more than anything else, is to provide true honesty about where you are. You uniquely have that 360-degree view…”
As Summit speakers and attendees have noted, this 360-degree view will illuminate where the CFO can optimize the current business model, generate new forms of value, and create more dynamic capacity. As the CFO aligns this work across the enterprise, often untapped potential can be found within the organization as it reorganizes or recombines best practices and innovations internally. But increasingly – particularly in a hyper-digital world – an organization has to reach outside its own boundaries to bring in new capabilities – whether that be ideas, technologies, collaborations, or people. These new capabilities – whether they are “home grown” or brought in from the outside – then have to be integrated into the current organization, which means CFOs of the future will have to grapple with an array of governance, structural, procedural, and cultural barriers.
Thus, for the CFO of the future there is a valuable journey to embark upon. As you can see from the cases and insights generated from the CFO of the Future Summit, progress is being made already, and the future is unfolding before us.
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