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Adapting to change is the CFOs big challenge
Change management and strategy implementation are widely pursued qualities and are ranked among the top priorities in business practice today according to the recently launched Michael Page Global CFO Barometer report.
Enterprises that are active internationally must adapt rapidly to external and internal changes, with the CFO taking greater responsibility for increasing corporate agility, according to the report.
“They will need to be a champion for compliance and ethics. In addition, they should have a high level of maturity, perseverance, team spirit and sensitivity to corporate politics,” said Steel Qian, Asia Finance Director with TMD Friction.
According to a 2014 survey jointly conducted by Forbes Insights and KPMG, nearly three quarters of CEOs said they expected the CFO role to grow to be increasingly important over the next three years. About a third argued for the need for more proactive support to their business. A third said CFOs were not able to understand or help them address issues facing their companies.
To fulfil the above, strategic thinking is the missing link for the business to thrive and develop. Strategic thinking involves understanding and prioritising a range of issues.
The issues and priorities that CFOs of the future must focus on include regulation, globalisation, risk, transformation and stakeholder management.
Becoming a catalyst for change
Across industries, organisations in Asia are realising that the same strategies in which they generated revenue or drove growth in the past are unlikely to be successful in the future.
A rapid pace of change now urges our companies to constantly reinvent their operating models, shift business plans and redesign processes or controls. These changes should be aimed at reducing cost and increasing productivity. CFOs need to be at the forefront of these changes, driving effectiveness and pushing for efficiencies in the whole organisation, as well as within the finance function.
“Start at the bottom and understand the nuts and bolts of how businesses tick as you won’t have the chance to do this later in your career. Don’t be afraid of new challenges. Technical skills are important but the development of your management skills to progress your career is equally as important,” said John Willcocks, APAC CFO at Cushman and Wakefield.
Supporting growth and expansion
CFOs deliver the most value when they actively participate in setting strategic objectives for the company in its entirety. For such growth to be authentic and holistic, CFOs in Asia need to proactively foster growth by becoming real thought leaders.
They should be capable of fostering new thinking paradigms, acquiring and transferring knowledge and creating versatile and easy-to-recreate solutions. It is imperative that they become aware of relevant developments in other industries or countries, and identify differentiators for firms to move forward.
“My tip is they need to perform an honest self-evaluation to identify core competencies and skill gaps so that they can plan the appropriate career moves or development to move closer to their goal,” added Peter Adams, Chief Financial Officer at Integrated Research Ltd.
Strategic planning and target setting
Be it finance governance, forecasting or the essence of financial risk management, CFOs in Asia will have to link the value drivers from disparate areas to the organisation’s overall strategic objectives and targets.
Having planning and budgeting guidelines and actively engaging with the business to gather input and discuss the results, allow for CFOs to be more focused on true “business partnering” and drive enterprise-wide change successfully.
“Always be positive, to be a leader not a technical manager and act as a business partner,” added Johnny Wu, CFO Greater China for Pearson.
Pushing a value-centric culture
CFOs in Asia must drive a stronger shareholder value orientation throughout the organisation.
To achieve this, they must manage complex and multi-functional projects, such as the implementation of shared service centres or new enterprise-wide technologies. They will have to apply these new technologies to drive the next stage of growth, hike efficiency and support broader business decision-making.
Putting their minds into the shoes of a customer
Some studies highlight that many CFOs in Asia do not get sufficient exposure to the complex world of understanding customers and what drives their behaviour.
They may also lack the insight into understanding non-customers and why they are not behaving in certain ways. In view of this, there are opportunities for CFOs in Asia to forge ties with their Chief Marketing Officers to learn more and weigh in on the debate.
“Join large companies early in your career to get the best training. Start off in public practice and be proactive,” added Peter Wong, CFO (Global) with Cargo Services Far East.
Close collaboration for collective success
As CFOs increasingly have a broader variety of responsibilities, the ability to collaborate effectively with other functions of the business is a critical factor for success.
CFOs will also need to build internal structures that will allow the firm’s global offerings to have responsiveness and build close-knit ties with all stakeholders so as to provide input and influence outcomes if needed.
They will also have to think of collaborations with their foreign counterparts such as decision makers and business leaders in the region, and create innovative and intelligent solutions through a trust-based community.
“If you want to be a successful CFO then you need to maintain broad relationships, never burn a bridge, and be prepared to work quickly and efficiently,” said Paul Jobbins, Head of Finance/Company Secretary for NEXTDC.
Challenges for CFOs of tomorrow
The CFO of tomorrow will be a strategic thinker with the capacity to introduce and manage continuous change effectively and someone who is a diligent and adaptable collaborator and a trusted adviser. Developing and implementing strategy within their organisation whilst innovatively designing growth opportunities for the future will be a core capability of tomorrow’s CFO.
Financial leaders with the support of their organisations, must be committed to lifelong learning in refreshing their qualifications, learn new methods and technologies such as data analytics and improve their communication and change management competencies.
Meeting these calls for change are what it takes to have organisations enter an unprecedented path of growth and deal with unforeseen concerns before they become real issues. Are CFOs ready for the change?
Find out full details in the 2015 Global CFO Barometer report, available for download here.
The 2015 Michael Page Global CFO Barometer report has revealed the top priorities for CFOs, including:
- Reinvention of operating models to reduce costs and improve productivity
- Foster growth through innovative and proactive leadership
- Draw together disparate business areas to collaborate and drive effective change
- Drive strong shareholder value orientation
- Gain insight into customer behaviours