Over the past three years, our lives and livelihoods have undergone a profound shift. How we work, shop, travel, and interact with each other has been forever changed. Beyond our individual lives, this time has also shaped somewhat of a renaissance in the business world. Traditional business models, tested in the early days of the pandemic, proved ineffective in the face of unplanned disruption. Flexible work environments, once seen as a unique perk, became the new norm for employees and employers alike. And the CFO, viewed by many as the keeper of the budget, was thrust into a new role as strategic advisor to the CEO.
For many, this shift in the c-suite didn’t come as a surprise. CFOs have experience using data to respond to micro and macro disruptions – a critical asset in today’s business climate. They also have a unique level of visibility into an organization’s operational realities. So, with change happening at a rapid clip, and businesses placing a greater emphasis on growth and efficiency, it’s a natural transition for CFOs to be in the driver’s seat when it comes to the transformation required to navigate today’s dynamic business landscape.
This shift came with its own growing pains. New research from The Harris Poll – commissioned by Anaplan and Deloitte – shows that rifts exist between the way CFOs view themselves, their evolving role, and the way they are viewed by their cross-functional colleagues.
The survey of 700 CFOs and senior departmental leaders across the U.S., UK, Australia, France, Germany, Japan, and Singapore, revealed that while it’s obvious CFOs have taken on a more strategic role, there is still a divide in c-suite perceptions.
Getting on the same page
For CFOs to succeed at aligning financial goals and plans to operational realities, strong cross-functional relationships must be a priority. Our research shows that organizations are relying on the CFO to address and manage challenges beyond the bounds of traditional finance – for instance, 91% of respondents said their CFOs have been effective in managing supply chain shortages, and 93% credited CFOs with facilitating hybrid work. However, there are still some concerns when it comes to the CFOs ability to foster collaboration.
Among senior colleagues, 78% of respondents said they feel the most room for improvement comes in the CFO’s relationships with individual business units. This feeling was echoed by more than half of marketing and sales colleagues (55%) who said that increased collaboration and connection with the CFO would reduce conflict between their teams. Finally, a vast majority of CFOs (82%) and their senior colleagues (86%) said that recent challenges – like the transition to hybrid work and supply chain volatility – could have been addressed more strategically if there was stronger communication and alignment between departments.
If CFOs want to break down departmental silos and successfully collaborate with their peers across the business, they need to overcome these cultural tensions. Because siloed business planning practices are not only ineffective – they are down-right detrimental.
Thankfully, digital transformation projects provide a perfect opportunity for CFOs to improve cross-functional relationships. CFOs have long understood the value of data, and, in recent years, have more readily explored the use of digital tools and systems to get the most out of the data available to them. Armed with this experience, CFOs can help demonstrate to their colleagues how data can be leveraged to unlock opportunity. And when a CFO shows genuine interest in modernizing and building resilience in areas such as the supply chain, HR, sales, and marketing, it goes a long way towards winning over hearts and minds.
Puzzling out priorities
In addition to identifying the tensions that exist between CFOs and their cross-functional partners, our survey revealed a surprising misalignment when it comes to the prioritization of Environmental, Social, and Governance (ESG) initiatives.
While ESG is a critical concern of modern organizations, there’s an interesting disparity between how organizations perceive their CFO’s efforts towards ESG and how CFOs see themselves. For senior colleagues, it’s clear that responsibility for ESG falls squarely on the shoulders of the CFO. ESG was cited by survey respondents as the second most common challenge that CFOs play a role in addressing (66%). But for CFOs, ESG slips down the priority list, with the management of ESG initiatives coming in fifth (70%), just above ensuring effective cybersecurity (57%).
It's a similar story when we look at ESG success. While 91% of senior colleagues say CFOs have risen to the challenge of advancing ESG initiatives, only 78% of CFOs believe they’ve delivered.
Maybe it’s the result of modesty – or a reflection of the balancing act CFOs are currently maneuvering in this complex business environment. Either way, there is opportunity for CFOs to expand their role in driving their organizations’ ESG initiatives into the future – they just have to embrace it as one of their core priorities.
Awakening the potential of the modern CFO
Overall, findings from this global report underscore just how important the role of the CFO has become in recent years. CFOs have helped their organizations navigate unprecedented volatility, have led the charge to digital transformation, and have made great strides in establishing the use of data as a key component of sustainable business growth.
But it’s clear their work is not over.
Whether it’s demonstrating a willingness to support other areas of the business, or re-prioritizing the management of ESG, CFOs can – and should – use their experience, emotional intelligence, and data-driven expertise to nurture mutual trust and understanding. As the business world continues to evolve, and the environment around us continues to shift, cross-functional alignment will be the key to a CFOs ability to unlock opportunity, align financial priorities to operational realities, and ultimately drive growth for their organization.
Karen Clarke is the Managing Director of Americas, Anaplan