Evolution of the Modern CFO Part 1: From Mr. No to Chief Trusted Advisor

If you’re a CFO, your job does not look like it did five years ago. That was a key takeaway in a discussion I had recently with Ernie Humphrey of The CFO Alliance, a global community of senior financial leaders and decision makers. In addition to having been a CFO himself, Ernie has engaged with thousands of CFOs through his previous role at Proformative and current position with The CFO Alliance.

I wanted to sit down with Ernie and get his perspective on the evolution of the CFO over the past several years. Our timing couldn’t have been better. Ernie had just wrapped up his work on the 2017 CFO Sentiment Study. He shared so much compelling data regarding the role of the CFO that we decided to share our discussion in a two-part blog series.

Following is part one – From Mr. No to Chief Trusted Advisor. 

Q: How has the role of CFO evolved over the past five years?

A: CFOs can no longer sit in the corner office with the door closed. In the past, interactions with sales, marketing, and customers typically related to not getting the desired budget or purchasing terms. Subsequently, the experience was oftentimes negative – hence, the term “Mr. No.” CFOs came into the picture when there was a problem.

That’s no longer the case. Nowadays, they’re being tasked to engage more, both internally and externally, with employees and customers. CFOs must get out of their shells to become “social CFOs.” This requires leveraging soft skills that they may not have needed in the past.

Q: You say CFOs need “soft skills.” Can you elaborate on that?  

A: CFOs must find ways to build positive relationships with customers throughout the entire customer lifecycle. This can include working directly with the CFOs at the companies of customers. Today, more and more, you’ll find CFOs sitting in on sales, prospect and customer service calls.

They’re reaching out to top customers, asking how things are going, and how they can be of more value to them. In doing so, they are helping their companies understand how to deepen and strengthen customer relationships, and create alignment between perception and reality in terms of the value they offer customers.

To be an effective CFO in today’s world, CFOs must commit the time to become more educated on the customers’ needs. With a better understanding of the customer, companies become trusted partners – making recommendations and suggestions for customers relative to products and services to leverage strengthening their own market leadership positions.

Q: What role – if any – does technology play in these changes?

A: Technology is critical to making this possible. With new technologies, CFOs can get 360-degree visibility into customer relationships. They can see interactions within CRM solutions and what type and quality of engagement that is happening – for example, upsells or cross sells.

These valuable insights used to be hidden from the CFO – now technology has a meaningful impact on visibility. This lets a CFO be proactive versus reactive if he sees issues or opportunities on the horizon.

Q: How can CFOs engage more internally?

A: Technology gives “passive visibility” – and, although it’s important, it doesn’t replace face-to-face interactions. CFOs must find opportunities to engage with company leaders and team members to make sure everyone is strategically aligned.

The face-to-face relationship allows information to be shared that doesn’t get into these systems. You don’t know what you don’t know. CFOs must use technology and relationships to mitigate that piece of not knowing what they don’t know.

Q: Why weren’t CFOs doing relationship building five years ago?

A: Relationship building really wasn’t under their umbrella of responsibility for CFOs five years ago. They were mainly responsible for producing the numbers. They weren’t looked at as strategic partners of the CEO – so they were far from a right-hand man to the CEO in terms of driving company strategy. I’m not sure that many CEOs realized how valuable CFOs could be in driving performance across the enterprise.

Subsequently, CFOs weren’t asked to be involved in operations and overall strategy. For that reason, CFOs had a huge inherent barrier in elevating had a huge inherent barrier in elevating to the role of CEO. So, I think now there’s a growing understanding that the best person to elevate to CEO can, in fact, be the CFO – as opposed to going outside the company. I believe this is the right move, but it also requires CFOs to involve themselves more – in operations, marketing, and sales.