Change Management Starts with the CFO - Plotting a New Direction
The primary role of a Chief Finance Officer (CFO) is to manage and navigate financial risk across a business. By doing so, a CFO connects with all financial functions across a business. To accomplish this, very often the CFO collaborates with their CEO to develop future company strategies and gains a global perspective of their company’s real-time performance.
In the 21st century, CFOs increasingly utilize process automation, data analytics, and IT in finance, all of which requires them to stay updated on the latest tools and fintech. In a cooling economy with rising interest rates, a CFO’s strategies may involve reducing capital allocation, enhancing working capital management, prioritizing key functions, and reallocating company resources to address new priorities. To keep a company competitive, CFOs are expected to react to market changes much faster than in the past.
The modern CFO goes beyond financial expertise: strong people and communication skills are essential. They must be able to effectively communicate the benefits and necessity of proposed changes companywide. A key facet of their newer duties to employees and shareholders, if applicable, is to ensure that staff receives any necessary training and development to embrace change. The CFO’s role may even increase team integration across the business to enhance efficiency. In the modern business environment, the CFO influences all aspects of the business unlike any employee except for the CEO and company president.
As with any change, employee buy-in is directly related to the quality of communication from the executive team as to why the change is occurring. Oftentimes it falls to the CFO to explain the financial aspects of the change to employees and as in personal lives, when the change is explained from an honest standpoint, employee pushback can be minimized. People typically resist change. It is a part of human nature. As a CFO, it may be your responsibility to help everyone prepare for upcoming changes, both viewed positively and negatively.
To learn more about the every evolving role of the CFO subscribe to our newsletter here. Each month, Seth Block CPA, a leading financial industry expert and Executive VP of Thermo Credit, unpacks issues involving finance, lending, and how they impact small business in his podcast at The Funding University (www.thefundinguniversity.com).
Finance Alliance: 5 CFO Change Management Strategies: https://bit.ly/3PVxorX
Forbes: The CFO as Change Manager: https://bit.ly/4687mHL
SF Magazine: How Finance Leads Change Management: https://bit.ly/3PTCTHw