Co-Founder and CEO at Y Scouts, a purpose-based leadership search firm.
getty
With inflation, a potential global recession and critical hiring needs as top challenges and priorities for organizations going into 2023, now is the time to invest in a strategic finance function, not cut it.
CFO is a difficult job. Strong financial talents aside, it requires someone who can co-exist with and answer to the CEO, board and investors. That combination of skill and finesse is rare and comes with immense pressure. But the right CFO is out there. And they can—and should be—used as an asset instead of a defense mechanism. The right one knows how to build the right systems, cut the right costs and guarantee the right amount of control to enable and empower the organization to grow efficiently.
Today’s CFO role goes far beyond "bean counting." They have an ever-growing influence on the entire structure of the organization. So just how can they add value and drive results?
Build Cutting-Edge, Efficient Systems
The right CFO will help build a solid foundation of scalable processes and systems that puts the company in a healthy position with headcount and capital expenditures. In other words—this CFO is building future value for investors.
They start by acquiring a holistic view of every corner of the company and designing well-planned processes, including a long-term financial strategy that leads to making better choices and working smarter, not harder.
Creating the right systems for employees to perform their roles in a more efficient, effective way is another way a CFO can add value. Programs and processes that add automation and technology can help employees better do their jobs, increase sales, boost cash flow, reduce waste and recognize savings.
Trim Unnecessary Expenditures The Right Way
Revenue growth not only leads to increased profits but also maximizes shareholder value. A recent study by McKinsey & Company found that "an extra five percentage points of revenue per year correlates with an additional three to four percentage points of total shareholder returns."
When it comes to managing efficient growth, some CFOs operate under the assumption that reducing headcount should always be the first response. Sometimes it is and sometimes it isn’t. And sometimes, there’s a solution somewhere in the middle. This brings us back to CFOs who can build long-term strategies that better prepare their company for the labor force eventualities that ebb and flow.
One way to trim unnecessary expenditures is outsourcing talent when appropriate. A flexible staffing strategy can include a combination of full-time specialists and project-based professionals who work for a predetermined time frame. According to Deloitte, the most common reasons enterprises choose this type of “as-needed” business model is not only to reduce operating costs, but also to help increase efficiency and solve talent shortages and capacity issues.
Now that you know the when and the why of hiring a CFO, how do you hire the right one? While there is no easy answer to that question, it’s important to ultimately make a match with a leader who learns relentlessly, develops others and is committed to driving results. You should look for someone who has the right combination of strategic, technical, communication, risk management, leadership and problem-solving skills. (Full disclosure: I run a leadership search firm, but you have many options when it comes to finding your next CFO.)
Before you start your CFO search, tackle these three important exercises first:
• Define your organization’s values and culture.
• Define the CFO role.
• Put yourself in a position to attract talent.
Today’s And Tomorrow’s CFO
The role of the CFO has experienced a philosophical transformation in recent decades. While traditional finance responsibilities like tracking cash flow, financial planning and reporting and compliance management are still crucial, so is knowing how to turn that financial big data into insights that inform operational decision-making and future business strategies.
Are you ready to find the right CFO?
Forbes Human Resources Council is an invitation-only organization for HR executives across all industries. Do I qualify?
