A New Era of Leadership: Redefining the Role of the CFO

The desks of CFOs are flooded with articles about digital finance transformation and workforce planning in the digital age. Entire meetings and roundtable discussions are dedicated to redefining roles within the finance function. With this much movement in the function, CFOs must figure out the evolution of their own role.  

In years past, CFO leadership strategy was centered on understanding the numbers with speed and accuracy; they needed to be able to tell business partners how to manage funds and make investments in a way that supports business goals. What used to be the core function of a CFO is now a single component of the job.  

Recent insights from CFO Brew’s report, “The state of finance hiring & careers,” show that finance leaders are navigating a fundamentally different operating environment. Hiring is more difficult, expectations are higher, and technology is completely overhauling traditional workflows. Nearly 60% of finance leaders say that hiring talent is harder than in previous years, with many roles taking months to fill.

As expectations shift and organizations begin to lean on finance leaders in new ways, CFOs need to understand their new responsibilities, adjust how they build their teams, learn the most effective ways to implement new tools and technologies, and step into their rightful place as a strategic leader.

Key Driver: Finance Transformation

From advanced analytics to artificial intelligence (AI), digital finance transformation is changing how work gets done. Trading file cabinets and monthly close binders for advanced systems and automated workflows brings efficiency and new capabilities, but it demands a complete shift at every level of the finance function.

For CFOs, capitalizing on digital transformation is more than an extracurricular achievement – it’s a mandate. But it’s a much more complicated undertaking than simply plugging in a few new tools and letting their teams take over.

Here are a few questions CFOs must be able to answer before they can ready their CFO leadership strategy for finance transformation:

• What is the organization’s current data landscape? Is there an ERP or source system with all the data? Is it clean and reliable?
• Are our source systems compatible with advanced technology platforms and AI tools?
• How will we mitigate financial risk and compliance issues that may come with digital transformation?
• Are managers and analysts comfortable using data to tell stories?
• What processes can we optimize and automate? What tools do we need to be successful?

These questions offer insight into just how comprehensive finance transformation is. For the 83% of CFOs who believe AI and GenAI will boost employee productivity and insight, navigating digital finance transformation is non-negotiable. While they push toward the future, CFOs are still leading their organizations through monthly close cycles, coordinating accurate forecasting methodologies, and acting as strategic advisors to other company leaders.

One person can’t do it all, but one person can make it possible to do it all. That person? The CFO.

Stepping into Strategy

To make time for technology-related duties, finance leaders have to adjust their current responsibilities. With less time for consolidating analytical insights and managing financial errors, CFOs must be able to delegate, relying on directors, managers, and other leaders to absorb some of the function’s key priorities.

That might look like:

• Creating a functional hierarchy that addresses different priorities. A VP of Data and Technology Integration, a Director of Finance Talent, and a VP of Risk & Compliance are just a few roles that can help alleviate competing CFO responsibilities.
• Developing a “strike team” for process optimization and technology implementation. Requiring over-extended teams to take on AI projects and adopt technology-centric processes can lead to burnout. With a dedicated team leading the way, implementation is targeted and manageable.

Even the best CFOs will experience discomfort when recalibrating their daily tasks, key priorities, and even team structure. Changing the way things have been done for decades isn’t an easy feat, but success starts with the CFO identifying areas where they can step back – making space for new capabilities they can take on.  

Addressing the Talent Gap

A new era of finance impacts the function as a whole, not just the CFO leadership strategy. When it comes to workforce planning, CFOs are faced with more than a talent gap; they’re navigating a global skills gap. It’s less about slow hiring and open roles, and more about revamping the finance talent strategy to look for technology-centric skillsets amongst traditionally educated finance professionals.

CFO Brew’s survey of leaders highlights this clearly:

• 77% of finance leaders say strategic thinking is the most crucial skill for incoming finance employees.
• 63% are focused on AI and automation proficiency.
• 59% say that data and analytical capabilities are vital.

As in-demand as the above skills are, they are not traditional finance skills. Industry professionals who entered the workforce just a few years ago were educated with an entirely different talent profile than we see today.

Historically, preparation for finance-focused career paths revolved around accounting, compliance, and financial reporting. Today, the foundational capabilities are still important, but they are paired with technology fluency, deep analytical insights, and the ability to translate complex data into action.

Developing a New Finance Talent Strategy

Adopting a new finance talent strategy is one of the most persistent challenges for CFOs. The solution is multi-pronged – everything from recruitment to upskilling current talent needs a complete overhaul. Here’s how CFO’s can begin to make an impact:

Recruitment

Encourage hiring managers to phase out old job descriptions, hiring requirements, and interview questions. The roles those once helped fill are no longer the roles organizations need. Instead, CFOs should mandate that all new job postings incorporate key technical skills required for each role. Featuring items like “data analytics,” “data visualization,” and “automation familiarity” can streamline workforce planning and recruitment.

Upskilling and Employee Training

Many talented finance team members may need a bit of help developing the technical prowess that finance transformation requires. Holding them back or pushing them away from the function isn't the right move; CFOs can help establish a culture that moves toward advancements instead of fearing them by committing to a rigorous upskilling regimen.

Current finance teams have a lot to learn when it comes to digital skills, but they still have invaluable perspectives and important skills that have gotten them this far. With weekly tech education classes and comprehensive training plans before rolling out new tools, CFOs can bring their teams into today's landscape without alienating anyone.

This framework benefits new hires, too. Plugging external talent into the same upskilling structure from day one accelerates onboarding and builds consistency across the team.

Cultural Shifts

Revising job descriptions and investing in upskilling current employees will only be successful if an organization has a healthy appetite for taking risks and learning on the go. Impatient CFOs who only consider hard savings and cost-cutting will obstruct the function’s ability to test new tools, adjust processes, and collaborate through the transition.

If people are afraid of losing their jobs or getting penalized for not “getting it right” every time, innovation has no room to grow. There are many considerations when driving cultural changes, but starting with a 30-minute “CFO Corner” where the CFO gets candid about tools and methodologies they’ve been exploring – even when a trial fails – can help reassure finance teams that they’re safe to experiment with advanced technologies.

Becoming a New-Age Leader

The role of the CFO isn’t in the process of changing; it has already changed. Now it’s time to adjust your CFO leadership strategy to match.

The finance function used to be one of control and compliance, but today, it’s based on strategic thinking, finance transformation, and technology-driven value creation. Organizations that can recognize the current state of the function and make investments to operate within the digital age will be well-positioned to overcome economic uncertainty, reach new levels of growth, and develop a workforce strategy the makes sense.

The CFO doesn’t sit at the top of this transformation; they sit in the center of it all. With a propensity for innovation, a patience for the process, and an understanding of how advancements impact their teams, CFOs can move into their adapted role with confidence.

Want to learn more about building a future-ready finance team? Contact us.