It’s easy to assume that budgets are already at the right level, and it’s typical that future results will be presented in the shape of a hockey stick. Effective CFOs recognize, however, that leaders’ conclusions can be clouded by incomplete information and wish casting. Function and business unit leaders will present lofty goals and competing requests, all with the best of intentions. Agreeing on sources of value is easier said than done. Scope the challengeĪ critical first step for new CFOs is to form an independent, fact-based view of the resources, support structures, and activities that support and fall short of creating value-and then quickly gain agreement and follow through with C-suite colleagues, business unit leaders, and the board of directors about the assessment. Most important of all, CFOs are responsible for the human element of a modern finance function-leading a large group of individuals and partnering with C-suite colleagues.īased on years of research and experience working with new CFOs and seeing what works, we’ve identified seven key mindsets and practices that new finance leaders can commit to right from the outset, to help jump-start and sustain long-term value creation. 1 “ The new CFO mandate: Prioritize, transform, repeat,” McKinsey, December 3, 2018. Additionally, CFOs have reported that they increasingly oversee digital initiatives alongside traditional tasks such as budgeting, planning, and risk mitigation.
To start, the number of functions reporting to the CFO in a typical organization has increased steadily in recent years, from four in 2016 to more than six. Whether you’re the CFO of a publicly traded corporation, a privately held company, or a portfolio business, responsibilities will look very different once you’re in the lead. It’s a long climb to chief financial officer-and that’s just the easy part.
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