CFOs focus on strategy as Covid-19 hits
Chief financial officers have switched focus to serve as strategists and change agents, according to research from Grant Thornton, which surveyed CFOs in February and again in May once the global coronavirus pandemic had set in.
The biggest change is in the CFO’s role as strategist, with 42 percent of CFOs saying they spent as much as half of their time as strategists in the May survey – a 13 percentage-point jump compared with the February 2020 pre-pandemic survey.
At the same time, 41 percent of financial leaders say they spent up to half their day in a ‘change agent’ role due to the pandemic, a 6 percentage-point increase from February.
Research for the 2020 CFO Survey Report was conducted in two phases: an initial questionnaire was sent out in February 2020 when most US workplaces remained open, unemployment was at record lows and the economy was on a positive trajectory. Grant Thornton then fielded a second questionnaire in May 2020 after the Covid-19 pandemic had taken hold.
‘The second questionnaire in May made it clear that the role of the CFO was expanding in new directions,’ says the firm in a statement announcing the publication of the report.
As well as a shift toward strategic issues and a role as a ‘change agent’, Grant Thornton notes a shift away from certain types of work for CFOs. ‘The number of CFOs spending more than half their time on control and compliance efforts dropped from 36 percent in February to just 8 percent in May,’ it says. ‘Similarly, only 9 percent of CFOs say they spent more than half their time handling transactional processes in May – a drop from 40 percent in February.’
Smooch Repovich Reynolds, managing partner at ZRG Partners, says the coronavirus has accelerated an existing trend. ‘There has been growing momentum for the CFO role to move to more of a strategy headset and be a little less of the classic kind of chief accounting officer who’s all about the numbers,’ she says.
The numbers and the financials are, of course, important, she continues, but there has been a growing focus on recruiting general business executives as well as strategy executives into the CFO role ‘because the CEO is looking for a strategic thought partner, not just someone who knows the numbers.’ What CFOs should be doing as they focus more on different areas of the role is taking maximum advantage of their direct reports who are experts in accounting, treasury, tax and all other specific financial areas, adds Repovich Reynolds.
With the coming of Covid-19, she says, there’s an even greater need for CFOs to be strategy partners as they grapple with the unpredictability of the virus and try to develop different frameworks for the financials.
IR and strategy
This renewed focus on strategy and change presents an opportunity for IR professionals setting their sights on the CFO role, adds Repovich Reynolds. According to the most recent Global Investor Relations Practice Report from IR Magazine, 64 percent of IROs report to the CFO and Repovich Reynolds says this is increasingly the career goal for those working in IR.
The first step for investor relations professionals looking to make that jump is simply to let your career goals be known. ‘IROs need to talk to their bosses about the fact that they have an interest in becoming a CFO at some point, and finding out what they should be doing differently or in addition to their IR role,’ says Repovich Reynolds. ‘Maybe it’s stepping into an operating group CFO role and then coming back to corporate, maybe it’s being the number two in corporate strategy for a bit.
‘But unless you express your career aspirations to your immediate boss and others, they’re never going to know you have that interest. And that’s one of the most obvious flaws with executives as they navigate their careers: they call people like me and say, I want my next step to be a CFO position. Okay, that’s great. But what are you doing with your existing company? Because the safest place to take risks is with a management team that knows and believes in you.’