CFO Leadership

Originally published on the Certent Insider blog.  For the past five years, Armanino has surveyed CFOs in [their] Annual CFO Evolution Benchmark Survey, where west coast CFOs are asked about responsibilities, roles and strategic priorities. Based on their responses, market research and their extensive experience as a leading CPA and Consulting firm, they’ve developed an in-depth report titled “Turning Trends to Tactics,” which outlines the findings on these leading trends including IPO, Expansion, M&A, Analysis & Reporting, Mobility, Regulations and Project Management. There is a shift occurring in the CFO role, and Matt Armanino, CFO at Armanino, is surveying the CFO community to better understand what is driving this transformation.  Matt explains the survey findings in his article. The Shift Our findings have revealed that the CFO role is generally split into three general categories composed of 25% business leader, 20% business protector and 55% accountant. However, a new, streamlined organization can be optimized through efficient technologies, allowing the CFO function to convert to 30% accountant, 20% protector, and 50% business leader. Thanks to smart, cloud-based automations, the CFO and senior financial team can streamline day-to-day functions, allowing them to become more strategic and visible organizational leaders. M&A: On the CFO Bucket List In the story, Matt notes that our survey results revealed that as a CFO, the M&A transaction in particular, can be a “hallmark of an organization that is highly strategic and well-regarded.” It also can be the hallmark of a CFO’s career. In fact, we found that no one is better equipped to take a company to a new level than an experienced and driven CFO. Help is On the Way Because of cloud technologies and platform integrations now available to the CFO office, the role can now more readily transition from strictly finance into overall organizational leadership, often as a springboard to the CEO role. For example, with time-saving tools like Certent, available in Armanino’s Equity Management practice, CFOs can greatly decrease the number of hours a team devotes to spreadsheet tracking and accounting of stock options, pre-IPO and post-IPO. Implementing Certent with Armanino saves resources, and establishes a highly scalable equity management solution. Not surprisingly, this makes CFOs and their teams very happy. Take the Survey Does this resonate with you? We’d love to hear from you. Take our survey here: CFO Evolution Benchmark Survey. The post The Evolution of the CFO appeared first on Blog | Vena Voice | Vena Solutions.

A research study says finance leaders may not be able to analyze an important area of the business, but that doesn’t mean they’re not eager to learn. Nobody’s saying gross revenues aren’t important, but let’s be honest: When you’re working in finance, it’s all about margin.  The responsibility for reporting on – and to help the organization drive – profitability – is core to what CFOs and their teams do. It’s just a shame that it’s so challenging for so many of them to do. In a recent study with the Cranfield School of Management of more than 200 CFOs and other executives in Europe, for example, there is a pretty major gap between the desire of senior leaders to positively affect margin growth and their basic ability to keep on top of where it’s at today. “Based on conversations with C-level executives, and by analyzing the results of a survey of 200 CFOs and CMOs, a new in-depth report reveals that those who report growth ahead of market expectations are more likely to say that maintaining or increasing margin is vitally important (41%) to their organization, in comparison to those behind (4%),” a story on a site called The C-Suite summarizing the data said. “Despite striking evidence that a lack of insight into margin is damaging shareholder value and the financial health of organizations, more than a third (38%) would not know how to affect an increase in margin tomorrow.” The report goes beyond the numbers to offer a model of eight different actions that are designed to help close this gap. This includes “opening the data vault,” offering data that matters and ensuring that awareness, analysis and action are linked. (If this sounds like a great way of summing up the value of corporate performance management, that’s because it is.” It could be that CFOs’ abilities simply need to catch up with their desires. Another recent study from staffing firm AccountTemps showed that 30% of CFOs polled said motivation to learn new skills is necessary to get ahead. This was followed by interpersonal skills (27%) and ability to adapt easily to change (24%): These results vary from a 2002 Accountemps study, when respondent CFOs deemed “embracing change” the most critical factor for professional advancement. Employees will be glad to know that only 7% of CFOs cited working long hours as a success strategy. Perhaps the next step is for CFOs and their teams to think more specifically about what they need to learn. They probably already know Excel inside and out. They may have a working knowledge of cloud computing and how it changes the game for CPM. Developing a goal around better understanding how to affect an increase in margin may be a way to evaluate everything from technology and tactics to how they spend their time. That’s got to be a better way to get ahead in their careers. Or at least marginally better. The post Why Margins Shouldn’t Be A Mystery For CFOs appeared first on Blog | Vena Voice | Vena Solutions.

Financial executives are constantly evaluating their own performance as well as their organization, and that’s a healthy sign There’s more than enough stress in being a CFO today that you wouldn’t think anyone would seek out a tougher job than they already have, but that’s what Jeffrey Bornstein says got him to where he is today. In a recent video interview on Bloomberg, the financial leader for General Electric was asked what kind of advice he would give his 20-year-old self, where such a thing possible. His answer? Taking on bigger risks even earlier in his career. “If your stomach isn’t turning over a little bit in terms of your competence, you’re not biting off enough,” he said, adding that if your stomach isn’t churning a little bit, you may not be reaching your full potential. “Almost all your personal and career growth is when you really stretch into a job you’re not sure you can do.” The relationship between stretching yourself, learning and ultimately growing is something that applies not only to CFOs, of course, but to all of us. So what’s different about CFOs? Probably the ways in which they can stretch themselves and learn, and what they can use to tackle those stomach-turning challenges. To get a better idea of how to do that, it’s worth looking at the results of a workshop that took place among attendees at the Wall Street Journal’s 2016 CFO Network Conference. Executives were divided into groups and asked to discuss the way they would rank the various items on their agenda. This included working with financial technology or fintech startups, more broad-based IT products such as cloud-based software, and simply being a modern-day CFO. What’s interesting in that last area was what the group in question said about communicating “market realities” to the rest of the business, using their budget as a key vehicle. Use the budget as the tool to drive messaging to employees, the board and investors. Use benchmarks to help frame the budget, then expand the use of leading indicators to move the discussion beyond the financials and into operations. Educate investors about the business environment in which you operate, clearly identifying competitive threats, the impact of technology and other innovations. This is a great summation of not only what the CFO’s role in budgeting should be, but what it might be possible to achieve with the results of all the effort that goes into budgeting. No one is saying budgeting isn’t getting more difficult or complex (although great technology exists to make it easier). But even if things get hard, it’s when you stretch and learn that you ultimately do something your 20-year-old self would be proud to see. The post The Best Ways For CFOs to Stretch Themselves and Learn appeared first on Blog | Vena Voice | Vena Solutions.

The phenomenon of machines taking over jobs performed by humans – known as technological unemployment – isn’t a new one. It began in manufacturing with the Industrial Revolution in the 18th century, and continues today as companies like Tesla and Google threaten jobs in transportation and logistics. Finance and accounting aren’t immune to the trend either; applications such as Quill are already drafting reports for financial giants and even U.S. intelligence agencies according to the MIT Technology Review. A study by NPR also found that accountants and auditors have a 93.5 percent chance of being automated, while bookkeepers have a 97.6 percent chance within the next decade or two. So should Finance fear automation and the rise of “robo-accountants”? Embracing technology to succeed The short answer is no. Pessimism stemming from such statistics are based on the old school perception that Finance is only an administrative function – number-crunching, so to speak. And in that solely administrative arena, robo-accountants will undoubtedly come out on top. The NPR study reinforces this distinction, explaining that jobs “mainly consisting of tasks following well-defined procedures that can easily be performed by sophisticated algorithms,” are at a high risk of automation. That spells great news for progressive finance professionals As we’re seeing at an ever-growing rate, Finance is much more than just repeatable number-crunching. The Association of Accountants and Financial Professionals in Business recently described the trend as “an on-going transformation that shows the finance function becoming more of strategic business partner within their organizations.” Instead of fighting automation, finance departments that embrace it to get at data more quickly and efficiently will actually increase their value to the organization. Time freed up by automation enables finance teams to analyze data and provide real insights to their management partners. In other words, finance can work side by side with robo-accountants, or as Brian Picarrelli, President of Thomson Reuters Tax & Accounting, writes: “We expect to see the industry evolve significantly as it increasingly marries powerful technology with the human element to create a hybrid — a cyborg if you will. This new breed of professional will be powered by big data and enhanced productivity tools.” That embrace of technology is not future talk. In fact, most CFOs already have it high on their to-do lists. As The Hackett Group found in The CFO Agenda, a report on finance leaders and their biggest priorities: “CFOs want more insights into their business than simply broad stroke profit and loss numbers. Tools that provide greater understanding of nuanced performance metrics such as business unit performance, customer lifetime value, and churn will also be part of the CFO’s top technological investments over the next 18 months.” As Finance continues to make an impact in profit-making decisions with value-added analysis and reports, CFOs shouldn’t fear robo-accountants, but look forward to them. Embracing the future, where algorithms and corporate performance management solutions take care of the number crunching, while Finance delivers valuable analysis insights, sounds more like Utopia rather than the ‘Skynet’ dystopia evoked by the march of the robo-accountants.  The post Why Finance Shouldn’t Fear Robo-Accountants appeared first on Blog | Vena Voice | Vena Solutions.

A first step to better work-life balance may be brokering better relationships across collaborators who can help solve challenges. If you’re fortunate enough to work in a company that offers half-day Fridays in the summer, you’re probably already looking out the window with longing. What occasionally makes the long wait for sunshine even harder, of course, is when you’re so swamped with work-related challenges that you wind up spending even more time indoors. CFOs and their teams often fall into this category because of the increased pressure from other departments, based on responses to a poll produced a few months back by the Institute of Management Accountants. An article in Strategic Finance reported that 26% of those polled said they were “somewhat dissatisfied” and 12% were “very dissatisfied” by the level of work-life balance they have today. “Satisfaction with work-life balance increases as the median working hours decrease for each group,” the article said. “Overall, respondents work an average of 48.4 hours per week (median 46.5). When asked about the number of hours worked, 47% would prefer to work fewer hours per week, and 62% reported feeling pressured to work more hours per week.” There’s no easy fix to this, of course, but there is at least the potential for finance professionals to improve that ratio by developing a more collaborative relationship with the rest of the organization. In fact, it may be as much about showing more value through the information finance departments provide and the way they show that value. A recent interview with Patrick Brooker of the CFO Centre in the Globe and Mail spoke to this: “At the CFO Centre we call it the barbecue test,” he laughs. He explains that the centre’s chief executive officer Ian Young selects CFOs for his team with decades of experience, but the true test is whether or not he would invite them to his home for a barbecue. Because it’s these communications skills that employers want to see. Of course, that article was talking more about what it takes to get hired as a part-time or “virtual” CFO, but even those in full-time, established roles need to pass the barbeque test. As they tap into technology that arms them with better insight into business performance, they’ll have the first ingredient, so to speak. They’ll have something helpful and important to talk about. The secret sauce? That’s a spirit of leadership that takes those insights and brings them to other stakeholders in the enterprise in a way that empowers them and makes them feel part of a shared mission – not just another guest at the barbeque, but someone who’s ready to cook up something transformative. The post The Secret Sauce that Sets Sizzling CFOs Apart appeared first on Blog | Vena Voice | Vena Solutions.

Accounting has traditionally been a key skill for financial leaders, but the ability to get insight from data and act may be even more important. It must sometimes feel like leading a modern-day finance department requires not only a good knowledge of numbers but a degree in computer science, psychology and fortune-telling capabilities. Given the demands of the job, it raises the question of how important an accounting background is to become a strong CFO. This has actually been explored in a paper that will be published soon in the Journal of Accounting and Economics which studied more than 5,000 finance execs between the years 2000 and 2010. Bentley University, which lead the research, summarized the results: “The paper found that accountant CFOs are a good fit in low-growth industries such as heavy manufacturing given their conservative, risk-averse tendencies, while non-accountant CFOs thrive in high-growth industries more open to taking risks,” the paper read. “Being conservative and risk-averse are not necessarily bad attributes, particularly when one is in charge of such activities as financial reporting, budgeting, and cost control. However, risk aversion may impede future growth in industries where investment in growth is crucial.” Margin Call Bear in mind, of course, that 2010 predates a wave of technological changes in the way information is collected, managed and analyzed. Also bear in mind that most companies won’t choose a financial leader on a single study, however well-researched. There’s no question, however, that the rate of growth and the competencies of CFOs go hand-in hand. For example, a recent post on Forbes provided some interesting insight into how the best finance execs not only keep their eyes on the numbers, but ensure they’re the right numbers and act accordingly: A study by Patrick Reinmoeller, Professor of Strategic Management at the Cranfield School of Management and Vendavo highlights what it calls “a worrying lack of insight into margin among many organizations, and a clear link between low level of margin insight and company under-performance.” Its research finds that European organizations performing ahead of market expectations and creating more value for shareholders place a much greater emphasis on understanding and improving margin than their competitors. Although this data was collected solely in Europe – where 47% of European CFOs said they don’t know how to increase margin quickly – the trends are probably not isolated to that region. The point is that whether you’re a CPA or not, you need to be able to get clear insight into the most critical data available to you. That insight, more than a particular academic background, is what will probably compel you to act – and will make you a top-performing CFO in the process. It’s all about having the ability to analyze and quickly act on your data. The post The Relationship between Company Growth and CFO Performance appeared first on Blog | Vena Voice | Vena Solutions.

Unless they’re particularly reclusive or rrand-new to the organization, it shouldn’t be difficult for most employees in a company to know who the CFO is. What can be challenging though, is identifying the next-generation CFOs. Recently consulting firm The Hackett Group released a report, The CFO Agenda, which profiled a number of financial leaders to identify their biggest priorities. This included some things you might expect, like planning a financial roadmap, reengineering processes and installing BI or ERP tools. The No. 1 priority, however, was improving financial leadership skills and business acumen. That may seem odd at first. If you’ve made it to the CFO role, aren’t you already well-equipped as a leader? In reality, though, great leaders never stop learning. They also know it’s not just good enough to do their own jobs well. They need to inculcate a sense of mission to their team and keep succession planning always in mind. The Hackett Group pointed to this in the report’s conclusion. “Today, it is widely understood that leadership skills aren’t just for people with senior management titles,” it said. “As finance employees partner with the business, they must demonstrate leadership through persuasion and motivation, planning and organizing, taking initiative and making appropriate decisions.” A Shift In Attitude Those high-level recommendations may leave some CFOs wondering where to begin. One suggestion is by walking the walk – demonstrating an openness to new ideas and taking well-calculated risks that could benefit the business. There’s some evidence this is starting to happen already. A much different kind of survey of financial executives profiled on iTWire, for instance, showed that CFOs are becoming much more comfortable adopting things like cloud computing where it makes sense. You could say the challenges they face demands it: “CFOs want more insights into their business than simply broad stroke profit and loss numbers. Tools that provide greater understanding of nuanced performance metrics such as business unit performance, customer lifetime value, and churn will also be part of the CFO’s top technological investments over the next 18 months.” Think of it this way: only by taking a step into technology that offers greater analytical capability will CFOs really understand their business. Only then can they plan, organize, persuade and motivate. Only then can they show the people they work with what real leadership looks like. The post The Quickest Way for CFOs to Become Better Leaders appeared first on Blog | Vena Voice | Vena Solutions.

A recent video on Yahoo Finance kicked off with an ominous question from the show host: “What are CFOs so worried about?” The segment was centered around an interview with Sanford Cockrell, national managing partner with consulting firm Deloitte, who was speaking about its latest report, Modernizing Finance: Why The Time Is Now And How Finance Can Get There. As Cockrell noted, there is more than one worry for the majority of financial leaders: interest rates, of course, but also contraction in the U.S. economy, hiring freezes and much more. The biggest harbinger of angst, however, is a drop in expected revenues that’s more severe than anything Deloitte has tracked in the history of the survey.  “When we see these lows around sales and earnings, it’s almost an ‘a-ha’ moment about what’s going to come next,” Cockrell said on the Yahoo Finance web series. “CFOs are quite concerned about what the growth cycles are going to look like over the next six months to a year.” The concerns meet their fix  If you actually read through the full report, those worries are exacerbated by a feeling that there’s little finance departments can do to roll with the economic punches. Deloitte suggests CFOs and their teams are essentially burdened by either too many key performance indicators (KPIs), the wrong KPIs or KPIs they can’t measure effectively. These stats stood out in particular: only 25% of those polled say they have time to spend on strategy and 51% see themselves more as “stewards” – in other words, doing their best to maintain the status quo. This is a far cry from what Deloitte suggests CFOs could do if they had the right technology: “Enhanced systems would enable finance to capture and summarize relevant information, including financial and non-financial performance. Finance might also provide modelling scenarios and predictive analyses that address different capital allocation decisions, return on investment implications and various cost of capital models.” In short, enhanced systems that build upon existing technology, such as Excel, allow the finance department to spend more time on strategy and analysis rather than on data gathering efforts. Part of the transition towards action may already be under way. In what felt almost like an afterthought during his interview with Yahoo Finance, for instance, Cockrell noted that CFOs were also increasingly concerned about cybersecurity, even though it’s not necessarily their area of expertise. “IT people report into CFOs about half the time, but CFOs still have a responsibility to make sure they’re protected,” he said. Just as they’re ensuring hackers can’t get at corporate data, CFOs may start to implement systems that protect the long-term growth of their companies—a similarly important responsibility. After all, taking action is better than treating business trends like just another worry. The post What Worries CFOs and How to Deal with It appeared first on Blog | Vena Voice | Vena Solutions.

We all probably accept the old adage that you can’t manage what you can’t measure. But what if you can’t avoid managing it – and have to take at least some steps towards trying to measure it? It’s not that finance teams lack key performers indicators, necessarily. It’s just that, as a recent report from the Chartered Global Management Accountant (CGMA) organization recently pointed out, there are some areas that may be ignored at a CFO’s peril.    The report, The Digital Finance Imperative: Measure and Manage What Matters Next, was based on more than 800 survey responses as well as one-on-one-interviews with finance leaders, and it showed that less than half of companies are looking at things like how effective their digital marketing is today or whether customers are engaging on social media. The report’s authors suggest this isn’t due to a lack of willpower or diligence by finance departments so much as not having the right tools: To measure intangibles, businesses must make connections between financial outcomes and pre-financial measures that they can use as leading indicators, usually based on a causal relationship or correlation. However, can businesses assemble and analyze the data needed to measure intangibles? Beyond picking the right technology, the report suggests finance teams should start by making correlations between the KPIs they track today and the things they believe deliver the most value to their organization. According to the survey, the top five value driver are all the things you might expect: customer satisfaction, business processes, customer relationship, quality of people and reputation of the brand. KPI Connections All these things can align well with the top eight KPIs that are monitored by more than 50 percent of those featured in the study. A KPI such as data quality, for example (which was the most-cited by 67% of the sample), can tie directly to a value driver like the quality of a firm’s business processes. Employee productivity, which came in at 65%, obviously dovetails nicely with a value driver like quality of people. Still, the second most popular KPI at 65%, return on investment capital, may require more thought around its relationship to value drivers. This is where the best CFOs shine, of course. In fact, the CGMA report is well worth a read not only for the statistics but also for some of the quotes from finance leaders. This one, from LinkedIn’s vice-president of finance Richard Wong, seems like a perfect way to end off: “The fundamental responsibility of finance is financial reporting, and compliance and risk management. These have to be done right,” he said. “On top of that, finance is responsible for allocating resources; shaping and defining strategy; using all the data to help leadership – the CFO is a co-pilot who can also pilot the plane; projecting into the future – looking into risks and opportunities; total understanding of the value chain and value drivers.”