The evolution of the CFO role is part of a long-term process of change, involving the assumption of new responsibilities focused on value creation. This allows the CFO to become the "change manager" of the company while still fulfilling their more traditional functions.
The finance department has transitioned from being seen as a "necessary evil" to a "strategic reference point," with the goal of adapting the organisation to modern times. This requires a deep understanding of the company's business and the sector it belongs to.
This transformation of the CFO's role is ongoing, with the trend being to continue deepening the journey towards becoming a CVO (Chief Value Officer)—essentially, the creator of value within the organisation.
Many CFOs are already embracing this role, focusing on defining strategies that allow for long-term value creation for the company, its customers, and the market. This shift requires considering other important aspects, such as fostering innovation within the organisation, embracing digitalisation, and managing human and environmental capital, to name a few.
In other words, the aim is to develop the "non-financial" side of the CFO through strategic decision-making about products, growth opportunities, and markets, always with an eye on the value that can be generated for the organisation.
Given that we are in rapidly transforming business environments where the pace of change is crucial, it's essential for CFOs to acquire new skills and tools that enable them to lead this change within the company. This means becoming skilled and competent communicators who can not only explain the past but also anticipate the near future and its potential impact on the company.
In this regard, Embat's cash forecasting functionality becomes essential, offering tools to analyse the past and accurately project the future. With reliable cash forecasts connected to the ERP, Embat provides visibility into future cash flows, budget tracking, and customisable reports to quickly identify deviations, notifications about expected balances by banking product, and monitoring of future cash flows. This reliability and flexibility support the company's financial strategy.
Beyond financial management, emotional management skills are undeniably important. These skills facilitate interactions with different areas of the organisation and help recognise and understand the emotions of the people involved.
Additionally, transitioning to the role of CVO will require continuous learning in areas not currently part of the CFO's direct management. These areas, such as new technologies, data analysis, and sustainability, often require ongoing trainings.
The CFO will need to understand and manage the delicate balance between short-term value creation and its long-term impacts on the company. They must be able to solve and respond to the "strategic problems" that arise within the organisation, focusing on areas that generate the most value.
It is clear that this process of growing into the role potentially positions the CFO as the company's "number two," enabling them to become the natural partner of the CEO and possibly their future internal successor. This also applies to their direct relationship with the board of directors and shareholders when communicating progress in terms of organisational value creation.
Therefore, the CFO of the future (or rather, of the present) must adopt a new image, focusing on strategy. Their role as CVO should be maintained over time without neglecting their primary functions, making this a challenging yet intriguing goal to achieve.
Will the CFO be able to become the CVO of the organisation?
