Mastering change: The new CFO mandate

One trend about CFOs that we’ve confirmed after years of research: the finance leader’s role is ever evolving. That has never been more true than it is today, during an era of dramatic change—with, for instance, the COVID-19 pandemic, increased attention being paid to social and environmental issues, and the accelerated adoption of technology to address myriad business and social problems. All these trends are triggering fundamental shifts in how people and businesses get work done. According to the latest McKinsey Global Survey on the role of the CFO,1 finance leaders are deeply involved in determining how businesses adapt to these trends—particularly in those places where digital and finance intersect.

The newest survey results show that in the throes of the pandemic, the CFO’s focus has shifted toward crisis management and away from longer-term responsibilities such as strategic leadership, organizational change, and finance capabilities. But the results also point to a way forward for CFOs and their companies, as more industries and economies move toward recovery—suggesting the degree to which finance leaders can have more impact in key areas of the business, and how companies can take advantage of missed opportunities to leverage the CFO’s insights and leadership.

Finance leaders are deeply involved in determining how businesses adapt to significant changes in how work gets done—particularly in places where digital and finance intersect.

CFOs cite increasing oversight over key areas of the business.
The finance organization’s adoption of digital is more common at the best-performing companies, and has also increased over time.
Greater technology adoption in finance could have lasting effects on a company’s overall resilience.
There is no one singular barrier to adopting digital technologies in finance processes.
Respondents report a mismatch between the finance activities that currently use digital and those where digital would add the most value.
CFO–CEO interactions on ESG, analytics, and digital—areas where CFOs are primed to make more impact—took a back seat in the pandemic’s first year.
When CFOs help develop ESG programs, the results suggest greater alignment with critical company objectives.
Transformations are ubiquitous and are initiated for a wide range of reasons.

Looking ahead

It’s no surprise, perhaps, that CFOs have been at the forefront of addressing the many challenges that the global COVID-19 pandemic has wrought across industries and geographies. Many of them have had to focus on their business’s shorter-term needs and have closely monitored performance, costs, and productivity. But the longer-term implications of many critical business trends—digital, transformation, and ESG among them—are now apparent and require the CFO’s leadership as well. Given the CFO’s focus on the kind of value creation that relies on their deep understanding of the economics of the company’s business model, their strategic perspective on sector-shaping trends, and their role as thought partner with the CEO and the board, they are best qualified to drive these changes.

CFOs are uniquely qualified to drive changes in how their companies experiment with new technologies, evaluate ESG risks and opportunities, and execute transformations.

In particular, CFOs can continue to experiment with new tools and technologies, digitize their own functions, and, with that experience, help spread digitization throughout the organization. They can lead the way in evaluating ESG risks and opportunities by factoring ESG-related criteria into the company’s investment objectives and decision making. CFOs can also take on a bigger role in executing transformations, beyond just traditional financial tasks, since they control most of the key business levers that determine a transformation’s success.

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