The Two Faces of the Chief Financial Officer
As the world order of business and corporate dealings changes so does the traditional book-keeping function of the Chief Financial Officer. In fact, if they have their heads stuck in the books, they are bereft of at least 70% of their functional duties. In 2011, Deloitte came up with the concept of “The Four Faces of CFO” theorizing that CFOs typically fit into four categories:
1. Responder – the one who supports company strategy development by helping business leaders to quantitatively analyse financial implications of different strategy choices
2. Challenger – the one who examines the risks to and expected returns on different strategy alternatives. This CFO seeks to minimise risks, hence is trained to look at the glass half empty and is inclined to say “no” a lot more to risky innovation.
3. Architect – the one who shapes strategy choices and applies finance strategies to complement and maximise the value of the strategy. So, in essence they find a way to make the strategy successful in financial terms.
4. Transformer – the one who becomes a lead partner to the CEO in moulding and implementing future business strategies. This CFO addresses core questions around shifting product market mix, delivering value and creating distinctive capabilities to provide the best operational and financial options.
In all honesty, while most CFOs fit into the Transformer category, in practical life, the role changes according to the changing needs of the business and the working style of the CEO. And this is what got me thinking. Are there set categories that we can fit the CFO role into. Although my first instinct was to say that the modern CFO will inevitably move between styles depending on the needs of the organization, on talking with my peers, I realised that there are two faces to the CFOs:
Mediator of Change
Once the C-Suite has decided a direction for a big change or a strategic direction, the CFOs then use their financial skills to make it viable and utilize the resources to operationalise it.
Being the Realist
While there is no growth or change without a certain level of risk, the CFO plays the role of the devil’s advocate to make sure that the risks are minimized and mitigation measures are put in place to reduce the financial losses that could occur in case the strategy went South.
It is my experience that both of these are the roles that a CFO plays during the course of this work life, and both are not exclusive to each other.
