Agile, inventive, ambitious: startups are often known to be one step ahead of larger companies. Here’s five things modern CFOs can learn from them:
1. They are fully involved in their company’s strategy and growth
Startups usually recruit CFOs to secure the company’s growth after fundraising, or to support a wage increase. They choose a young profile, trained in large organisations, to bring a structured vision to the finance function. In fact, according to a survey conducted by Nomination, only 0.7% of startup CFOs have worked in an audit firm – an experience that was mandatory some twenty years ago.
Nonetheless, startup CFOs are way more involved in the company’s strategy than those in large organisations. CFOs are becoming strategy-makers working hand in hand with the CEO to grow the business. They focus their attention on analysis rather than the collection of data to be more efficient, valuable and fulfilled.
2. They foster digitisation and new ways of working
The ability to manage technological change is a priority for CFOs in 2018. The financial officer of the future is younger – almost 50% of startup CFOs are under 39, compared to 11% in traditional companies. Hence, the use of new technologies and the digitisation of processes are a necessity. 58% of financial officers believe they need to “build their understanding of digital, smart technologies and sophisticated data analytics.” It will be particularly critical that they build their understanding of two disruptive technologies: blockchain and robotics process automation (RPA).
More and more CFOs strongly believe that technology could, indeed, be an opportunity rather than a threat. The amount of data, the velocity of communication and potential risks have been a source of stress and vertigo for many years. Though a growing part of the finance community now believe that digital tools can be used to drive cost efficiency, manage strategic risk and even an opportunity to focus on high added value tasks and create value. A vision that we share and thrive at UpSlide!
3. They harness the power of data
CFOs believe that delivering the data and advanced analytics for business intelligence and information management will be a critical capability for tomorrow’s finance function. However, many organisations are struggling to turn the promise of data analytics into the reality of improved performance. This presents an important opportunity for modern CFOs to step in and transform their organisations by turning the promise of data analytics into measurable performance gains. And finance leaders are ideally positioned to define a role for themselves and the finance function that goes beyond pure finance-related data analytics.
“There’s no doubt that CFOs need to be a champion and driver for the use of analytics in all current core financial processes under his or her remit today,” says Chris Mazzei, global chief analytics officer at research firm EY.
As CFOs become more focused on deriving strategic insight from data, they increasingly see the need for investment in the right people, as well as the right technology. The CFO’s next challenge will be to transform the analytics-based insights into actions, and aligning incentives, rewards and measurement accordingly.
4. They answer to the company’s specific needs
Bye bye well-defined job descriptions! Millennial CFOs roles are defined by their company’s specific needs. 78% of them believe they will be increasingly responsible for the organisation’s ethical concerns. 66% also think they will have to handle way more than financial processes. Only 54% of the baby-boom generation and 61% of the X generation share this vision.
These figures illustrate the profound change revolutionising the function: CFOs will need to adapt to an environment where the employee’s happiness and the eco-responsibility policy of the company are almost as important as account management.
5. They manage all types of risk
Managing all types of risk - strategic, reputational, regulatory and cyber risk - are growing parts of the finance function, particularly in larger organisations, where 66% say it’s a critical future capability according to EY.
Today, organisations and their finance leaders are challenged by a rapidly changing risk landscape. Finding enough certainty to be able to make decisions in this volatile risk landscape is a major challenge for CFOs, and they are taking an increasing role in risk management.
Relationships are one of these risks, especially when they involve stakeholders. CFOs increasingly have to juggle the requirements of regulators with the demands of investors, and other stakeholders.
A research report from the Financial Executives Research Foundation found that 74% of the companies surveyed are taking action to improve their financial reports. The benefits of doing so included positive feedback from senior management, board members, investors and analysts who found the information easier to read and digest — allowing them to make more informed decisions.
Léa Faust is content manager at Upslide. This article is based on a blog post on the Upslide website. View the original article in full here.