The world is ceaselessly rocked by events that necessitate rethinking the business-as-usual mentality.
Unprecedented events like Covid-19 repeatedly demonstrate the seismic shocks that run through the global economy, crushing businesses in their devastating wake.
What differentiates an organisation that stands tall at the end of a storm and one that crashes and burns? Extraordinary leadership.
At the heart of the leadership fabric is the C-Suite led by the CEO in concert with his C-team extraordinaire.
The Chief Financial Officer (CFO) is the commander-in-chief of the financial department critical to paving the way out of a crisis. After all, strong finance lays the foundation of a strong organisation.
Read on to learn more about CFO leadership skills and their role in times of crisis.
Who is a CFO?
The Chief Financial Officer (CFO) leads the financial department from the upper echelons of the management hierarchy. They are the all-in-one financial guru of the company responsible for overseeing and maintaining its financial health and growth. In the past, the CEO was the only recognisable executive of an organisation. But today, with the ever-expanding and evolving role of the CFO, the world has stopped to take notice of this C-Suite executive in awe and admiration.
The CFO is no longer a number-cruncher or glorified accountant. They are visionaries and strategists with a finger on the pulse of the economy and an ear to the ground.
Responsibilities of a CFO
The responsibilities of a CFO are manifold. From conservative gatekeepers to strategic advisors and risk managers, the role of CFOs is continuously evolving.
CFOs are responsible for the management of A-Z of the finance department of an organization. They are leaders who play the critical role of standing strong through the headwinds of uncertain times and contributing to growth.
These are the major responsibilities of a CFO:
- Financial Overseer:
- Compliance Officer
- Chief Negotiator
- Financial Advisor
- Risk Manager
CFO’s Leadership Role During Crisis
The mettle of a true leader shines through during testing times. The leadership role of a CFO has become considerably visible with the increasing frequency of disruptions. Strong finance is the first and often the last line of defence during a crisis.
Let’s look more closely at how CFOs can lead an organization through the other end of the tunnel during (and after) a crisis:
Be Agile and Flexible
Crises call for agility and flexibility on the part of the CFO. Rethinking business models depending on the requirements of the situation and being able to think on their toes can help CFOs be the leader an organization needs.
Communication is key
This oft-repeated mantra holds truer during a crisis. The CFO is in a unique position as a member of the C-Suite to communicate effectively with all stakeholders and share information from the unique perspective of a financial guru.
Cash is king. Uncertainty demands greater liquidity of assets, and the CFO is responsible for ensuring that the organisation is taken care of in this regard. The CFO has to ensure the company is in running condition and insufficient cash flow does not impede operations.
Risk Management and Forecasting
The first thing that takes a hit during uncertainties is the financial structure of an organisation. The CFO, as the ‘chief’ financial advisor to the CEO, is involved in strategising and providing innovative inputs for risk management. Moreover, they are also responsible for analysing and forecasting the potential risks to the future fiscal health of the organisation and mitigating the bulk of potential negative impacts.
Undertake Scenario Planning
Crises are unpredictable. The only way to get ahead is to prepare for multiple scenarios and plan effectively for each. Working on risk mitigation plans beforehand requires foresight and critical thinking, which falls right within the job description of a CFO.
As a leader, a CFO should be able to harness the power of the collective and motivate them to work in collaboration towards a clear vision. The CFO not only brings the finance team together, but also liaisons with the upper management of other departments, including the CEO, and actors external to the organisation.
Embrace Digital Transformation
Adapting to technological advances and embracing its offerings can shoulder some of the challenges thrown up during uncertain times. The future of fintech is blazing bright. A CFO must be ahead of innovations that can help tackle obstacles, optimise resource usage and bring operational improvements.
Visualise the Big Picture
A true leader can see beyond the obvious. A CFO should look at the big picture and motivate the team to work towards it. Leading by example by looking into the future and working towards larger objectives rather than letting present uncertainties unravel the organisation is the duty of the CFO.
Captaining a ship through troubled waters while boosting morale is a task only a few can accomplish. The CFO is the leader a CEO and an organisation can rely on during a crisis to secure its financial present and future. Their leadership role can turn the tides in favour of the organisation and contribute to phenomenal growth. A crisis becomes an opportunity under the chieftainship of the right CFO. Their responsibilities are immense that require continuous dedication to learning and development.
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