CFOs are primed to lead businesses but are unaware of their potential to do so, Anaplan report reveals
Once perceived as risk-averse cost gatekeepers in charge of financial reporting and forecasting, today’s CFOs are critical to driving digital transformation and growth. Ongoing market uncertainty has only accented this trend the past few years. To explore the evolving role of the CFO and the internal tensions and opportunities that come with this transition, Anaplan, in partnership with Deloitte, commissioned The Harris Poll to survey more than 700 CFOs and senior departmental leaders across the U.S., UK, Australia, France, Germany, Japan, and Singapore. Today, we’ve released the findings and a selection of key insights in a new research report: Architects of business change: Awakening the potential of the modern CFO.
Commenting on the findings, Victor Barnes, Chief of Connected Planning at Anaplan, said, “CFOs are critical to driving digital transformation and expanding growth opportunities. And while we’ve done our best to dispel the myth of the CFO as conservative executives preoccupied with numbers, there’s still more to be done. It is encouraging, therefore, to see that these findings show that CFOs are, in fact, inspiring, strategic leaders.”
CFOs have become the company’s compass in uncertain times
Today’s business environment requires leaders to be confident in their ability to quickly adjust plans according to everchanging realities. However, planning – and therefore, strategic decision-making – has historically been a highly manual and siloed process. It’s therefore unsurprising that a majority of CFOs (82%) and their senior colleagues (86%) agree that recent challenges, such as the transition to hybrid work and supply chain volatility, could have been improved with stronger communication.
Global business leaders must revamp their approaches to planning to be more collaborative, agile, and real-time, but CFOs and senior colleagues realize that this requires an improvement in people dynamics (82% vs. 86%), technology (80% vs. 86%) and processes (81% vs. 86%). Striking a balance among these three considerations is essential to handling market uncertainty and democratizing planning to effectively deliver business objectives and today’s CFOs must take the lead.
CFO self-perceptions are not aligned how others see them
CFOs have a pivotal role to play outside of owning the business’s financial priorities, but do they realize it? Our research reveals that although CFOs and senior colleagues are aligned in the view of their CFO’s ability to solve business problems (85% vs. 86%) and understand operational realities (82% vs. 85%), when it comes to more interpersonal skills, there is a mismatch between how CFOs are perceived and how CFOs see themselves.
On the one hand, CFOs over-credit themselves when it comes to coaching (27% vs. 12%) and collaboration (34% vs. 27%). On the other hand, other see CFOs as inspiring – a personal characteristic that many CFOs didn’t see in themselves, with only 10% of CFOs considering themselves as inspiring compared to 37% of their colleagues.
This dynamic of undervaluing their own leadership efforts holds across a variety of business challenges, especially in regard to tech-related efforts like facilitating hybrid work (81% vs. 93%) and ensuring effective cybersecurity measures (82% vs. 90%). Overall, it seems that ongoing global disruption has helped businesses understand the importance of the CFO in ways they themselves have yet to realize let alone capitalize on.
ESG progress starts and ends with the CFO
This misalignment continues with environmental, social, and governance (ESG) initiatives, which CFOs consider themselves less effective at addressing despite the wider business seeing it as one of their top three successes.
Our research reveals that 85% of senior colleagues consider ESG to primarily be a concern for the CFO, citing it as the second most common challenge for the CFO. By contrast, CFOs ranked ESG initiatives fifth on their priority lists. In terms of success, 91% of colleagues believe CFOs have risen to the challenge of realizing ESG initiatives compared to just 78% of CFOs.
Clearly, there is a real opportunity for CFOs to expand the role of managing their organization’s ESG initiatives and to embrace it as one of their core priorities.
Going forward, be it in the delivery of democratized planning or ESG initiatives, success will largely depend on whether CFOs are able to evolve with the times. Those who can positively pivot their roles and responsibilities in line with their colleagues’ perceptions will have the best chance of achieving this.
Barnes concluded, “The disruptions of the last few years have laid bare the importance of business connectivity across an enterprise. And to fully understand business risks and opportunities, CFOs need to be able to gather critical insights from every corner of the organization. Achieving this requires a more democratized approach to decision-making. Siloed business planning practices are not only ineffective, they are down-right detrimental.”