The role of a CFO is rapidly changing and expanding, requiring a broader range of skills and more digitization, managing consulting company McKinsey discovered in a recent survey.
McKinsey partners Ankur Agrawal and Christian Grube and associate partner Meagan Hill discussed the results of the survey in an April 8 McKinsey interview, along with Jorn Jensen, former CFO of Dyson and senior adviser to McKinsey.
Four things to know:
1. Finance teams now need a broad scope of talents, including knowledge of data science and engineering. There is also a stronger link to finance and strategy in the budgeting cycle than ever.
"The message to finance professionals is that the breadth of skills required, the knowledge base you can gain, the types of roles you should aspire to play — that canvas is broader today than it ever was," Mr. Agrawal said.
2. There has been an increase in digitization with the CFO role, particularly in robotic process automation and advanced finance analytics, Mr. Grube said. These areas were accelerated by the COVID-19 pandemic. Technology is also becoming more relevant in demand forecasting or cash-flow planning. In the next eight to 12 months, Mr. Jensen said he expects inventory management will be more important because of supply chain issues.
3. CFOs sometimes have difficulty starting transformations within the company because peers think the transformation is not part of the CFO's role, the survey found. Mr. Jensen said he expects this way of thinking to wane over time.
4. CFOs are also focusing more on environmental, social and governance programs and how to align them with strategy and finance, Mr. Agrawal said. Many CFOs said in the survey that when done right, these programs can help grow the company in the long term.
"The key implication is that ESG is here to stay, and almost all respondents said that CFOs should be at the forefront of shaping the ESG debate," he said.
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