Effective CEO-CFO Relationship
Traditionally, the Chief Financial Officer was the number cruncher in the company, while the Chief Executive Officer took care of the strategic direction. However, the needs in today’s business environment are redefining the roles of the CFO. Some CFO’s are influencing the direction of some of the most valuable brands known today. Peter Oppenheimer, the former CFO of Apple Inc. is known to have been a major factor in having Apple where it is today. Today’s CFO is more of a strategic partner to the CEO than a subordinate.
While CEOs lead from the front by defining new paths for the business, these paths are fraught with risk and unpredictability in many cases. The CFO is trained to manage risk and can help chart the path while avoiding major risks to the business.
The CFO is a specialist in data analysis, planning and forecasting, risk management, monitoring and evaluation, and predictive analysis. These are skills the CEO will rely on when charting a strategic path for the business. The CFO’s input is crucial in today’s environment of big data where businesses have to continuously adapt by relying on massive market information available.
As a trained accountant, the CFO is able to break problems into linear solvable bits. This is a trait that many CEOs lack as they tend to see the bigger picture and will often think of big picture solutions which may not be appropriate in some situations. The CFO is able to present a linear way of solving problems which the CEO can execute successfully.
Also Read: Challenges CFOs Face in a Digital World
Elaborating the vision
Shareholders are often wary of the business heading into unfamiliar territory as envisioned by a CEO. This could be problematic in implementing business strategy. The CFO is the go-between for both sides. As the person in charge of the organization’s resources, the CFO is able to calm shareholder fears on how well the business can bear the risk in a strategic shift.
The CFO is in charge of crucial departments that drive that facilitate the rest of the business. He is in charge of seeing that resources are available to execute plans. In planning strategy, the CFO’s input is crucial to the CEO as plans cannot be executed without resources.
The Chief Finance Officer is also an advisor, architect and engineer in the business. He will advise the CEO on the priorities that have better chances of success, do resource trade-offs to make these executing these priorities possible, and oversee the implementation of the decisions that will put these priorities in place.
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