Essential skills for the visionary CFO
As the role of the CFO has transformed from a financial professional focused on the past performance of the business to today’s real-time analyst able to help the business improve operational and management performance, a new set of skills and competencies has become necessary for those taking up the position.
But will those skills be enough to take today’s CFO into the future?
Recent research conducted by Sage in South Africa revealed that 12% of senior finance decision-makers struggle to adapt to their new roles and their responsibilities that have evolved over the past two years.
These individuals are stuck in what has been dubbed the CFO 1.0 era. The rest appear to have moved on, taking up the challenges of CFO 2.0 – confidently using modern financial tools to automate their finance function. Almost two-thirds (64%) of the South African survey respondents report spending more time analysing data than they do gathering and processing it.
However, the rapid development of technologies like artificial intelligence (AI) and machine learning is heralding a new phase in finance, and CFO 2.0 is evolving, very quickly, into what is termed the “visionary” CFO – CFO 3.0.
Pieter Bensch, Executive vice-president for Africa & Middle East at Sage, points out that as finance enters the CFO 3.0 era, CFOs need tools that enable them to deliver on their core competencies, and to be confident in driving the digital agenda throughout their organisation.
New skills are as important as digital tools. The CFO’s role today is not simply about the traditional essentials of maintaining the books and records, financial reporting and statutory compliance. CFO 3.0s also requires new technology skills, strategic insight and critical thinking.
As futurist and strategy consultant, Graeme Codrington points out, technologies such as AI are as much of a threat to highly skilled professionals with years of academic training – including doctors, lawyers and accountants – as they are to the low-skilled, repetitive type jobs that can be automated and are already being replaced by robots.
However, rather than taking over all aspects of the job, Codrington believes it is likely that technology will – or can – take over only those aspects of the job that do not require “human” skills such as “what if” thinking; adaptive intelligence; intuition; diversity intelligence; curiosity and storytelling; initiative and an entrepreneurial mindset; and being tech-savvy.
The World Economic Forum said much the same in its latest Future of Jobs Report. This report highlighted skills that went beyond hard skills and formal qualifications, predicting that by 2022 “no less than 54% of all employees will require significant re- and upskilling” in order to attain the competencies they’ll need to perform various job tasks successfully.
However, proficiency in new technologies will be only part of the new skills equation. Just as – if not more – important will be those skills deemed to be “soft” or “human” skills.
- Complex problem-solving: The ability to solve novel, ill-defined problems in complex, real-world settings; having the mental elasticity to solve problems never seen before in an environment that is changing rapidly.
- Critical thinking: Being able to use logic and reasoning to interrogate a problem, consider alternative solutions to the issue, and evaluate the pros and cons of each option.
- Creativity, originality and initiative: In the business arena, creativity involves being able to connect the dots of seemingly disconnected information and come up with something new.
The WEF noted that skills like persuasion and negotiation would also retain or increase their value, as would attention to detail, resilience and flexibility. In addition, “emotional intelligence, leadership and social influence as well as service orientation (will) also see an outsized increase in demand relative to their current prominence”.
By combining soft skills with accounting acumen, CFO 3.0 will not only offer operational guidance, support in risk management and regulatory compliance, and financial insight; they also have strong leadership and communication skills to partner with the rest of the C-suite on organisational growth.
Ultimately, CFO 3.0 will use a combination of hard and soft skills to help deliver what the business needs – an effective strategy to navigate an ever-changing future.