4 High Expectations for Tomorrow's CFO's and Leaders

4 High Expectations for Tomorrow's CFO's and Leaders

There was once a time in distant memory when CFOs just had to keep track of and report on “the numbers.” Warren Buffett vaguely remembers this time with a wistful sense of nostalgia. Probably.

But those bygone expectations aren’t what the CFOs of today—or tomorrow—must contend with. Modern financial leaders at the helm of competitive organizations are getting used to a new set of expectations, which means embracing new roles.

In fact, depending on who you ask, CFOs may soon have the most complex role in the C-Suite.

That’s because the CFOs of the future won’t just be bean-counters, number-crunchers, or cost-cutters. They must also be prepared to step in as future-focused business strategists that confidently guide decision-makers with deep and nuanced insights into financial data.

The aspiring financial leaders of the future won’t just have to know where an organization has been or where it’s going next—but where it can go, too. 

Here are four high expectations for tomorrow’s strategic financial decision-makers and what it means for their current roles.

Expectation #1: Eloquent Financial “Data Storyteller”

As the top financial leader and overseer in an organization, CFOs already have an intimidating to-do list that includes (but is not limited to):

  • keeping track of cash flows
  • doing strategic planning, modeling, and budgeting (FP&A)
  • overseeing accounting and preparing taxes
  • ensuring financial reports are complete and accurate
  • keeping an eye on the markets and global economic sentiment

In the 21st century, modern technology can help lighten every CFO’s load significantly. The actual day-to-day drudgery that goes on behind the scenes takes up far less of the workweek than it used to.

But what technology doesn’t do is put it all together so that coworkers, stakeholders, and decision-makers can understand what the numbers are telling them. That’s why tomorrow’s CFOs will also have to add this bullet point to the list:

  • explaining all of the above in an engaging and easy-to-understand way

In other words, modern CFOs are expected to be financial data storytellers.

Future financial leaders will have a front-and-center seat at the decision-making table. They will also be expected to explain operational and financial risks, weigh different scenarios, and come up with sound recommendations so that everyone else's job is easier. 

Effective data storytelling incorporates data visualization but also a compelling narrative that incorporates strategic financial insights and potential pathways to achieve business goals. Forward-thinking financial leaders will be expected to:

  • Use as-needed data visualization tools to quickly explain issues that may impact profitability in the present or in the future.
  • Explain the risks and potential rewards behind various future scenarios that have been stress-tested for all eventualities, including black swan events and worst-case scenarios. 
  • Be ready to answer any last-minute questions from their C-Suite or stakeholder audience without having to go back to the drawing board.
  • Share relevant and regularly updated financial data with anyone who needs it, which ideally means it should all “live” in one place.

Data storytelling helps CFOs and financial leaders turn numbers into narratives with input from every department of an organization, which helps decision-makers make less risky, more strategic, and more confident business decisions.

Expectation #2: Effective Interdepartmental Communicator

Naturally, this means that CFOs will also be expected to communicate far more frequently on a regular or even ad hoc basis with their own teams and other departments in their organization, not just the C-Suite or the board of advisors.

That’s because modern, cloud-based technology also makes it a lot easier to run the numbers and report on them far more quickly and far more often. After all, there’s no reason not to.

If financial data visibility and transparency help reduce risks while improving the odds of achieving key business goals, then everyone should be looking at the numbers as routinely as possible. Technology makes it easier than ever to keep financial planning top of mind and talk about it.

In other words, while the CFOs of the past spent most of their time passively monitoring financials and preparing big-picture reports, that’s because the equivalent of tedious administrative work kept them from using their time more efficiently. 

The CFOs of the future, aided by modern technology, will be expected to be a bit more proactive instead of reactive. Not only will future reporting look a bit different with all those real-time modeling and forecasting solutions, but it should probably happen more often, too. 

And not all reports need to be high-stakes, do-or-die, big-picture presentations either. 

“Little picture” reporting at the departmental and even individual team level is more than possible now—which means that tomorrow’s CFOs should be prepared to tell financial data stories and tailor those stories to their audiences.

Expectation #3: Driver of Internal Controls & Process Improvements

All of that interdepartmental communication, financial planning, and forecasting also implies that the CFOs of the future will have more than enough information at their disposal to garner deep insights into organizational operations and business processes.

Financial leaders will no longer be just the gatekeepers of financial data or the wardens of spend. Decision-makers may also look to CFOs to come up with new ways to improve existing processes and systems in order to enhance efficiencies.

Not to mention that since data collection, analytics, and reporting will become far more streamlined, the main goal of FP&A will gradually be to provide more accurate, forward-looking information about a company’s long-term operations. The idea of a “going concern” is about to be radically redefined.

Unsurprisingly, there are those who believe that the role of the COO and CFO will eventually be rolled into one new C-Suite position. The CFO of tomorrow will be able to propose, design, and maintain an organization-wide operating control environment that encourages data integrity as well as operational efficiency.

Going back to better data transparency and interdepartmental communication, CFOs should also ensure that critical financial data isn’t siloed away in forgotten, hard-to-find corners (because that leads to siloed decision-making, too). No one should have to play detective to uncover the most up-to-date numbers.

Fortunately, the global move toward integrated cloud-based financial planning solutions means that it should be easier than ever to eliminate data silos and maintain a single source of truth that encourages accountability and collaboration, which in turn will enable organizations to be more financially flexible and adaptive.

Expectation #4: Environment, Social, and Governance Overseer

With far greater insights into past, present, and future spending and investment, tomorrow’s financial leaders will also be able to focus more on what really matters—human capital. 

At the end of the day, an organization is nothing without its workforce (and the customers they serve). And in the 21st century, both workers and customers care more than they ever have about environmental, social, and governance (ESG) considerations.

Put another way, the biggest stakeholder for many large-scale organizations and enterprises is society itself. And society has its own high expectations.

For example, younger workers and consumers aren’t at all like their parents, who were loyal to brands for decades. Many surveys and large-scale consumer studies have shown that Millennials and Gen-Z, in particular, prefer brands aligned with their ethics and politics, and care deeply about issues like social justice and company responsibility.

So much for just being a provider of affordable goods and services, which the CFOs of yesteryear were very good at. Organizations must rise to meet society’s high standards and expectations. Think of ESG as the new compliance.

CMOs alone can’t meet these expectations, by the way. Younger consumers are also very good at sniffing out when a brand’s image doesn’t align with its actual business practices.

That’s why future CFOs have no choice but to figure out how to tie the numbers into ESG reporting initiatives. The newest challenge is to achieve financial objectives in not just a cost-conscious, but also socially-conscious way.

The Future for CFOs is Brighter Than Ever

You don’t need a crystal ball or a palantir to see that the role of the CFO continues to grow broader and deeper.

Tomorrow’s financial leaders can’t just report on the numbers anymore. They must also be eloquent communicators, data storytellers, and strategic business partners that guide an organization into a socially-conscious and profitable future.

The modern CFO needs to help stakeholders and investors quickly see the bigger picture, be conversationally fluent with CTOs in order to explore new technology investments or growth opportunities, oversee day-to-day operational efficiencies alongside the COO, and even act as an organization-wide change agent with the CEO—all while taking on society’s changing expectations.

Will this be a challenging transition for many financial leaders? Absolutely. For some, it may will be a Herculean task.

Without the aid of modern, cloud-based FP&A, scenario analysis, and financial modeling solutions, it may very well be impossible to meet most of these expectations.

Fortunately, Synario can help. 

Let us work with you to help you digitally transform your Finance function to meet modern expectations. We will give you the tools you need to quickly and accurately analyze, plan, budget, model, and forecast while confidently communicating your findings and advising decision-makers on the best course of action—regardless of what the future holds.