You know those questionnaires that ask you: If you were not a CFO, then what would you be? Perhaps you could consider answering, “A dancer.” Yes, I do realize you are probably very well-groomed and serious, with “more important things to do”. But as a CFO in the current job market, you are probably accountable for performance in more areas than ever before.
If you get the time to reflect upon it, your range of responsibilities might sometimes overwhelm you. Add to this the dynamic, fluctuating market scenario and you could fill a book with the number of challenges you have to lead your business to overcome. This blog post takes a look at the top 5 and how you can tackle them.
1. Saving v/s Investing
The CFO’s job is not only to hoard existing funds but also to generate them. When the current market credo is “Innovate or die”, it is essential for CFOs to bring in new, improved performance to the table. But Innovation has a twin he simply can’t do without; Investment. Expect improved capabilities if you invest in talent; better decisions and lowered risk if you invest in business intelligence; improved compliance if you invest in treasury; the list goes on.
2. Increasing the Bottom line
While considerable budgets and time are reserved for the sales team, it is the tax team that enhances your organization’s bottom line. Don’t let their potential remain untapped. Involve them in the business, make crucial decisions keeping tax implications in mind and review profit after taxes when you analyze your books. Doing this could help you add millions of dollars to your bottom line.
3. Retaining Talent
You cannot deny the fact that the talent crunch in finance is not going away anytime soon. You probably put in great efforts to ensure that your topmost talent is here to stay. Sometimes, unfortunately, these efforts are what cause stagnation, stunt individual growth and cause people to move out to move up.
Instead, consider another type of move – around. Encourage your team members to dabble into other areas to help their learning curve. Similarly, be open to embracing members of other departments within your organization; after all, they know what makes it tick. Also, hire often and different. Sometimes, it is the creative, business-savvy types who can help you achieve your financial goals.
4. Managing Risk
Risk management is not just about planting your foot firmly on the brake. It involves acceleration, effectively controlled by the ability to stop. Taking risks is essential; the challenge lies in increasing the chances of reward. To do this, determine which risks can gain maximum rewards. Next, help the powers-that-be in your organization to understand them. Finally, focus your efforts into managing just these key risks in the best possible way.
5. Climbing the Corporate Ladder
You take up an ever-increasing number of responsibilities to work towards your CEO dream. But do consider that you may just burn out instead of climbing up. Less than 50% CFOs actually become CEOs of their organization. Amongst the world’s top companies, more CFOs are gaining fulfillment by retaining their roles, but in a different company. And this is not by doing more but less.
So, instead of trying to put your finger in too many pies, narrow down on activities that create real financial value for your business and do those exceptionally well.
Finally, don’t let the constantly increasing demands leave you feeling winded. Instead, refocus on value creation and remain in control.
Also have a look at the video of the above post: