The role of the modern CFO has evolved significantly in recent years. According to Elizabeth Freedman, a Forbes contributor, there are four key ways in which finance leaders are now leading differently:
1. They prioritize employee engagement: Modern CFOs understand the importance of engaging employees in financial matters. They create ongoing dialogues with employees and ensure that they understand the numbers and metrics that matter to the company. They no longer assume what employees should care about, but rather seek to understand what matters to them and figure it out together.
2. They focus on collaboration: Modern CFOs engage in genuine two-way dialogues with other leaders in the organization to get to the right outcomes. Instead of handing out impossible targets or using threats to enforce compliance, they work collaboratively to find the best solutions. They value insights and recommendations from others and have a permanent seat at the decision-making table.
3. They explain the ‘why’ behind the ‘what’: Modern CFOs ensure that decisions, policies, and choices are well-understood internally, not just by investors or the board. They provide employees with a clear rationale behind the company’s capital projects, future investments, and resource allocation decisions. This helps employees understand the company’s strategic direction and align their efforts accordingly.
4. They reject traditional leadership roles: Modern CFOs no longer feel the need to conform to the traditional stereotype of the aggressive, tough guy CFO. They understand that creating a culture of fear is not an effective way to lead. Instead, they lead authentically as themselves, rejecting the old playbook and exploring new ways of achieving outcomes.
By adopting these new approaches to leadership, modern CFOs are able to drive better outcomes for their organizations and play a key role in modernizing their finance departments. They are not afraid to lead differently and challenge traditional norms in order to succeed.
