The year has started, and we can already see a number of trends that predicted in 2016 taking shape. CFOs are seeing their role evolve in nearly every industry, as their responsibilities increase and they play a more significant part of companies’ growth and business strategy. In a report by McKinsey & Company late 2016, 4 out of 10 CFOs said they spent most of their time on tasks unrelated to traditional finance. Accenture predicts that by 2020, productivity in finance will increase by 200% to 300% while organizational costs will decrease by 40%.
Decline in COOs
One of the reasons the CFO role is evolving so quickly, is the decline in COOs. The Chief Operating Officer’s role has been removed from many organizations, leaving their previous responsibilities to the CEO and CFO. According to Crist Kolder Associates, there has been a decrease of 45% in the number of Fortune 500 and S&P 500 companies with COOs since 2000, and only 35% still have COOs today.
As CFOs become more integral in business strategy, and as more and more technology companies and startups enter the market, it is becoming more common to expect CFOs to be technology leaders as well. That’s not to say CFOs are expected to be developers, but they do need to understand every single part of the organization, and technology is now a dominant feature.
CFOs lead and manage the financials and reports throughout the entire organization, making them the authority on crucial data such as revenue, costs, success of various campaigns, product development, milestones, and more. They already have all of the information needed to make strategic decisions and improve a company’s bottom line, and this is now becoming recognized by an increasing number of organizations around the world. A CFO may be responsible for leading the finance department, but the insights they gain along the way potentially make them excellent strategists.
How far with the CFO role continue to evolve? In a recent article on Raconteur, CFOs are described as “mini-CEOs”, and the importance of a CEO-CFO partnership in leading a company is emphasized.
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