The complete version of this report is available as a PDF
Chief financial officers (CFOs) are facing an era of disruption: a time when forces and factors such as macro-economic shifts, global regulatory flux, digital tools and e-currencies, data and analytics, behavioral economics, and an information-savvy customer base will drive a surge of new service demands and upend outdated corporate financial models. While disruption will bring formidable challenges for finance leaders, it will also create an unprecedented opportunity to not only ensure new levels of compliance but also drive growth and enterprise value.
To help current and next generation CFOs meet the demands of this new era, the Technology and Entrepreneurship Center at Harvard, Accenture Strategy, and Leadership for a Networked World convened The 2016 CFO of the Future Summit: Creating Value in a Digital Age, held from May 18 – 20, 2016, at Harvard University in Cambridge, Massachusetts.
The Summit focused on the strategies and skills CFOs need in order to effectively address questions such as:
What strategies and methods should I employ to optimize current operating models and modes of value creation? How do
I develop and incubate new and disruptive business and financial models? What methods can be used to align and adapt
the enterprise to new forms of value creation? What skills, competencies, and relationships must the next generation CFO develop?
This report synthesizes the key findings from the Summit. In particular, it contains special sections on Harvard Business School Professor Karim Lakhani’s groundbreaking work on “digital ubiquity” and LinkedIn’s innovative approaches to harnessing the power of data and analytics. The report also delves into three case studies highlighting leadership in finance departments in transition:
We hope this report offers new ideas, strategies, and insights to help CFOs lead their organizations to new levels of efficiency and innovation.
“The role of finance is changing from being the cost controller to becoming what I call, ‘the business value architect.’ That’s what finance will be in the future, and I think that’s a huge opportunity.”
Dr. Christian Campagna
Accenture Strategy, CFO & Enterprise Value Lead
In late 2013, Accenture was at an inflection point. Throughout most of its history, the firm had functioned as a consultancy. By then, however, it had evolved into a multi-dimensional business with wings devoted to consulting, strategy, technology, and operations. Accenture’s diversification forced the entire company to evolve, but it created particularly acute pressure for the finance division to adapt.
At the turn of the 21st century, The Stanley Works (Stanley) appeared to be in excellent position. Founded in the mid-19th century as a small family business, the firm—which specialized in hand tools for the construction industry—had blossomed into a multi-national company with approximately $2.7 billion in annual revenue. Nonetheless, Stanley officials feared that the firm was not positioned to thrive in the next century.
In 2005, the National Cash Register Corporation (NCR) stood at a crossroads. Founded in the late nineteenth century and famous for having invented the mechanical cash register, the firm had become a leader in manufacturing hardware to process financial transactions and a significant player in the data warehousing market. Unfortunately, at the turn of the 21st century, the firm’s competitive advantage was eroding—quickly.
“The question is how do you learn from each other and do so in a way that keeps your eye on the vision and the focus of what it is that you need to do in the future, which is to continue to drive your business in an ever-changing dynamic world.”
Senior Vice President, Estée Lauder Companies
As CFOs strive to lead their organizations deep into the 21st century, they are on point to not only sustain and grow business value, but also prepare their organizations for a turbulent future. The primary challenge for CFOs is aligning and renewing firm-wide capabilities, as well as personal leadership skills, as they traverse uncertain markets,
technologically advanced consumers and value chains, and an operating environment full of disruption. CFOs that help their firms navigate this transition will make their companies more resilient and profitable, and will solidify their positions as key leaders within their firms.
The leaders at the 2016 CFO of the Future Summit identified three keys for CFOs to lead effectively and evolve in an uncertain future. First, CFOs must diversify their skillsets. Specifically, they cannot rely exclusively on traditional financial management skills but also must develop technological expertise, just as Bob Fishman did as NCR expanded its use of software. Second, CFOs cannot pursue technical skills at the expense of the human side of their work. All three leaders featured in this report leveraged technological and financial acumen and also went to great lengths to foster innovative and creative teams that were open to taking risks. Finally, CFOs need to conceive their roles broadly and in particular see themselves as an integral player in business development strategies. As Accenture CFO David Rowland has said, CFOs must think of themselves as “Chief Growth Officers.”
Beyond mastering these diverse skillsets and priorities, CFOs need something else: a sense of urgency. In his presentation on digital ubiquity, Harvard Business School Professor Karim Lakhani quoted the science fiction writer William Gibson, who said, “The future is already here – it’s just not evenly distributed.” The implication is that change, often in the form of disruptive technologies, will come sooner than leaders think. It is therefore imperative for CFOs to act, innovate, and experiment now so that they are at the forefront of and benefit from technological change.
Leadership for a Networked World, and the Technology and Entrepreneurship Center at Harvard would like to thank the Executive Leadership Group for their vision and ideas that aided the development of this Summit.
Leadership for a Networked World’s applied research, student innovation challenge, and on-campus summit programs are an initiative of Dr. Antonio M. Oftelie, Innovation Fellow at the Technology and Entrepreneurship Center at Harvard (TECH), part of the Harvard John A. Paulson School of Engineering and Applied Sciences. TECH is a hub for students, faculty, alumni, and government and industry leaders to learn together, collaborate, and innovate. LNW accelerates these efforts by connecting leaders across sectors and developing cutting-edge thought leadership on innovation and organizational transformation.