Major merchants can’t seem to hold onto their finance leaders. Those with staying power need to work differently.
The whole point of success in retail is getting customers to stick around for a while — or at least until they can make a purchase. Lately, however, the bigger challenge seems to be finding CFOs who don’t make a break for the exit prematurely.
Bloomberg took a quick analysis of CFO comings and goings among some of the most well-known merchants in the U.S., and the results are eyebrow-raising: while one-fifth of American retailers put a new head of finance in place in 2015, the past year saw another 45 walk out the door.
“Wearing different hats is clearly taking on a new meaning when it comes to retail CFOs.”
Of course, retail is often viewed as one of the most “disrupted” industries, with the rise of e-commerce, then mobile commerce, and now the Internet of Things shaking up the way products are merchandised, marketed and sold. The Bloomberg story suggested that it’s time to start mulling why those disruptions might pose a problem for those occupying the CFO role:
Useful skills for a retail CFO these days include closing stores, executing turnaround plans, and slimming down corporate structures. Skills that aren’t traditionally part of the CFO toolkit — such as coming up with big-picture strategy, operating stores, and websites, and parsing customer data — are also becoming more important.
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In ‘Retail industry: New year, new CFO,’ Pymnts.com contrasted these emerging responsibilities from what had been the more standard job description for someone running a retailers’ finance department:
“Previously the position focused on growth, from announcing new stores to monitoring the stock price — a cyclical range of duties that also included inventory management and some M&A work as well,” the article said. “Wearing different hats is clearly taking on a new meaning when it comes to retail CFOs.”
What do you do when you’re wearing all those hats, though? A post on Chain Store Age offered a list of areas where CFOs could use data to provide insight outside of the traditional finance function. They’re all worth considering, but this one stood out:
Develop plans and prioritize as to how to re-design and re-size the store fleet as some stores become less productive and in some cases no longer viable. Use lower-performing stores in alternative ways such as fulfillment centers to ship from store. The implications on inventory investment by store are significant and CFOs can be very helpful in objectively assessing alternatives.
You don’t have to work in retail to see how this same kind of transition could play out in other sectors. CFOs, having a better handle than most on many moving parts of a business, may be able to help successfully manage transitions from established ways of operating and ones that make more sense in the 21st century. Success in financial leadership will increasingly be communicating to the rest of the business what’s really in store.
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