Today, CFOs have a different role beyond the financial health of the organisation. We are catalysts for change. The CFO is a trusted advisor to the CEO helping in steering business transformation – to help shape their organization for the future.
One of the biggest challenges is how can you predict and prepare for the future when you don’t know what is around the bend? For example, if you are driving a car and approach a bend at full speed you will crash, but if you drive too slow, you will be overtaken. So, what do you do if you don’t know how to navigate the road ahead at the right speed and take the right approach?
Be a future thinker to be ahead
The recent times have been unprecedented. Standard solutions and the way we look at performance have not always been ideal. But there are lessons we can learn from.
For instance, nearly all of us have been working from home — pretty much for 100% of the time for over a year across the globe. If there’s any silver lining to the pandemic, it’s that we had the infrastructure to enable this. There’s been a rapid shift to the cloud, where software has defined everything, and app-based services have ensured seamless connectivity of people, processes, apps, and devices. Imagine if this pandemic hit us only a decade ago, the world economy would have been significantly impacted as none of this would have been possible.
So, who were the people that made these digital transformation investment decisions five years ago? Without all the facts and figures? Without knowing what would happen?
There’s a great example I could give: Pokémon Go, the digital game, became an overnight phenomenon in 2016. I actually had people walking through my front garden to capture these virtual creatures on their phones through the app. The valuation of Nintendo, the franchisee owner of Pokemon, went up by almost $7.5bn in a short span of 48 hours. Despite the fact that Niantic, the American software company created the game and launched it successfully. And the game become a global phenomenon due to the cloud infrastructure Niantic already had in place – all thanks to the future-thinking they made years ago.
Ultimately, it is the CFO’s decision to invest for this unknown turn in the bend. They must develop the knack for steering and accelerating at just the right speed, in blind yet calculated anticipation of what’s coming.
“The CFO is making decisions today for what can transform a business and not just make it more profitable five years from now but also relevant and future-proof.”
Be a Catalyst; All Innovation is Now Digital!
I now see my peers in the industry evolve their enterprises from working on digital projects to initiating digital programs and having a fully-fledged digital adoption roadmap encompassing all parts of the organisation. All innovation is now digital. Such as the hotel I stayed at recently, where everything in the room was Wi-Fi enabled and controlled by a tablet – the lights, AC, ceiling fans, room service, and more.. I can imagine if manufacturers of physical switches do not evolve, their entire business will be at risk.
“I wont be wrong in saying that as a company, we live or die by our digital evolution.”
The CFO of a business should be trusted with leading the way. You only have to look at the four quadrants of CFOs we have today – Stewards, Operators, Strategists, and Catalysts. It’s this latter quadrant where the crème de la crème of the top-performing Fortune 500 companies are. They’re making the decisions that are shaping the future – and the businesses they help steer are reaping the rewards.
Be disruptive in digital transformation
Having a solid brand is still important today. It should speak on your behalf and offer your brand values in a reliable and consistent manner. Today, a competitor brand won’t disrupt your business by offering a 30% price cut – it will be because they have a fundamentally different go-to-market model. There is a CFO behind that. He or she has helped their company to lay down forward-thinking plans. And more often than not, it is based on digital transformation.
Customers are crucial of course; they demand better products. You need to be online to deal with this – even if you don’t have an online presence, it still affects your business. Take third party rating sites such as Trip Advisor for example, where some customers are reviewing you – and other customers are listening, and making decisions that affect your business based on what they read. Your online presence matters more than ever.
You may have a great brand and customer-base, but you also need employees who will go the extra mile to evangelize on your behalf. Potential employees will now judge you on your digital transformation. It started with Bring Your Own Device, but now it’s extended to software and usability – the need to consume info where and when they want. CFOs need to help their organisations attract new talent who are demanding this high level of employee experience. They are making the choice to join you based on your digital infrastructure right now.
Be agile and adapt
Today there’s often less time and more data muddying the waters. But big decisions are still needed from CFOs. The answer is to fail fast.
Not all trends are successful – who remembers snail-trail beauty treatments? – but participating in the ones that are a success allows for huge profits, if you’re prepared to fail fast by making a few wrong turns along the way.
It’s all mostly about agility and the right KPIs. The product lifecycle is shorter, but the mark-ups are potentially greater. CFOs need to be let loose to constantly adapt.
Be ‘Digital-First’ with a digital ecosystem enabler.
Organizations who act as a digital ecosystem enabler provide the answer for CFOs.
“Tata Communications can help you create the ecosystem for borderless growth and address your challenges – in whatever form they lie.”
Organizations need a digital-first infrastructure in place. And CFOs, in my view, need to be able to spend a disproportionate amount of their investment budget on digital. You need to be prepared to fail faster. To write off certain projects so that you can reap the rewards of those that don’t.
Future-facing CFOs need to make the decisions which will help their business evolve and be in the best place possible for whatever is ‘beyond the bend’.
For more information on this, read our eBook Accelerate Your Workplace Evolution, or contact Tata Communications.