CFO in Transition: Four faces of the CFO
A Deloitte Point-of-View
Based on Deloitte’s research and discussions with many CFOs and other CXOs, we believe that the Four Faces of the CFO is a critical framework for understanding and resolving much of the turmoil that has buffeted CFOs and their finance organisations.
The “Faces” are roles that CFOs play:
- Steward: Protect and preserve the assets of the organisation
- Operator: Balance capabilities, costs and service levels to fulfill the finance organisation’s responsibilities
- Strategist: Provide financial leadership in determining strategic business direction and align financial strategies
- Catalyst: Stimulate behaviors across the organisation to achieve strategic and financial objectives
We have heard CEOs express that finance has become too insular, introspective and isolated. CFO turnover is emblematic of the sustained and continuing changes and pressures faced by CFOs. CFO roles have become more complex and variegated. Many CFOs are grappling with an expanded scope of responsibility while they drive or adapt to strategic shifts and changes to their company’s business model, while assuring the finance organisation is aligned. Regulatory scrutiny still weighs heavily and the cost of control eats into alternative investments. Activist investors scrutinize not only performance, but governance infrastructure. Despite some high profile promotions of CFOs to the CEO position, many CFOs feel they have not achieved their professional goals and that the “fun has been taken out of the job.” Many CFOs express feeling a greater degree of personal risk.
While CFOs and their finance organisations may differ in their particular pain points, priorities and appetite for change, based on our research and work with CFOs, we believe that CFOs need to:
- Understand the four distinct, but interrelated roles they play in the organisation and how finance resources are aligned. Determine how finance fulfills the four roles and dynamically prioritizes the CFO’s personal focus.
- Recognise the inherent conflicts these roles may cause in organisation, leadership development models, incentives and operating models
- Identify the critical challenges to fulfilling each role individually and the overall mission of finance collectively. In this document, we present the challenges most often mentioned in our discussions with CFOs, along with our perspective on what leading CFOs are doing to address them
- Understand where finance drives value in the organisation and recognises the enabling infrastructure. Determine which gaps in current vs required performance to address first (and the pitfalls of getting the sequence wrong)