CFOs - Masters Of Trade-Offs

Maximizing Long-Term Corporate Growth And Shareholder Value

The CFO is a member of the CXO triad comprising of the Chief Executive Officer, the Chief Operating Officer and the Chief Financial Officer.

Earlier, the role of a CFO was of:
Steward- preserving the assets of the organization by minimizing risk, maximizing gains and getting the books right.

Operator- running a tight finance operation that is efficient and effective.

Now the role is of:
Strategist- Playing a lead role, providing back stage support to the CEO and the Board, support in terms of facts and figures to justify and enable decisions on strategic issues. It's increasingly
important for CFOs to help in shaping the overall strategy and direction.

"CFOs have a key role in strategizing for directing management attention towards business opportunities"

Catalysts- The CFO, as a catalyst, is an agent for change, focused on establishing a value attitude throughout the organization. He gains business alignment to identify, evaluate and  execute strategies, and serves as a business partner to other decision makers including business unit leaders, the Chief Information Officer, and sales and marketing leaders. He establishes a structure of enterprise accountability and drives enterprise execution.

Today's CFOs are deeply involved in areas like
Pricing Strategy:
Which is the most effective pricing strategy relative to our competitors?

When should we modify our pricing strategy in response to changes in our competitive environment?

Supply Chain:
What strategies and practices should be in place for moving the right product to the right place at the right time?

What are most effective direct and indirect sourcing and procurement strategies to fulfill our goals and satisfy customers?
How can we improve sales and operations planning while retaining supply chain flexibilities?

Organization Model:
Which operating model is preferred for our organization?

Driving Better Business Results
This role of Finance team can be bolstered by the following attributes

Instinctive objectivity: Though CFOs have biases, their roles and responsibilities force them to bring an inherent objectivity to the business. They support decisions with analytics, insights and data.

Central to performance management: CFOs need to understand past, present, future performance and the drivers to position themselves for distinguishing which decisions produce
best results.

Masters of trade-offs: CFOs are masters of trade-offs, as they weigh costs and benefits in every decision.

Apart from these, CFOs have a key role in strategizing for directing management attention towards business opportunities across the globe. Adding to it, the complexity of today's business requires CFOs to pro-actively monitor the various financial and non-financial risks, develop mitigation measures and continuously refine the risk assessment methodologies.