Beyond the Numbers: Insights from a CFO

April 01, 2024

By Rizwan Saleem, Chief Financial Officer

In contrast to the common perception that Chief Financial Officers (CFOs), and by extension accountants, are considered dull, overly controlling, and devoid of humor, I'd like to suggest that there are outliers among us. Despite the numerous caricatures and internet jokes, we possess the ability to maintain a healthy balance, after all we have been balancing books for a while now.

With over twenty years of finance experience including five years being a CFO, I am a firm believer in navigating finance from a holistic perspective; integrating empathy, Emotional intelligence (EQ), technology and social responsibility when it comes to leadership, decision making, and financial reporting.

Leadership: Embracing Learning, Commitment and Emotional intelligence

Whenever I am posed with the question of what the secret behind success is, I always reply by saying: ‘You must be willing to learn and commit to follow-through. So many people dream, so few act – this is what sets the achievers apart from the dreamers.’ This is the advice and moto that I live by and try to instill in my team.

In a strong team the unifying factor is a shared sense of purpose and the willingness to collectively achieve team and corporate goals. Like any other manager, in order to be an efficient leader, one must exercise a significant amount of emotional intelligence to be able to understand different temperaments in the team. As well as make sure the department works well internally as well as integrates into the wider architecture of the group.

For example, when I started at GMG, the business performance reports for most business units were manual and dependent on the month-end closing of the books before the business heads could review and deep-dive into their results. By investing in the Group FP&A function, related IT tools and parallel investment in the business finance team, today we have PowerBI dashboards for all business units across GMG wherein the sales, margin and key KPIs are published daily for the business unit heads to review in alignment with active finance business partners to take timely actions in managing the business. Through such action, we were able to shift the perception of finance team from being number crunchers and report providers to a team providing business intelligence report to the business on an ongoing basis and facilitate active finance business partnership.

Elevating Decision – Making

In finance, decision-making involves uncertainty and risk. Having a high emotional quotient empowers CFOs to manage emotions under pressure, fostering calmness and facilitating sound decisions. It aids in navigating the emotional aspects of interactions, crucial for reporting earnings, communicating with investors, and collaborating with leaders and the board. Although I do feel that an excess of emotions can lead to impulsive financial choices, leveraging emotional intelligence in moderation helps us navigate complexities, build partnerships, and inspire confidence, positively impacting the organization's financial success.

Financial - Reporting

CFOs have a responsibility to foster a culture of financial discipline and integrity within the organization. They establish and enforce financial policies and procedures to ensure ethical conduct and compliance with regulatory standards. While reporting the results of the company, the CFO needs to take into consideration the temperature on the ground: What changes are occurring to the market? What the employee sentiments are? How is the performance of the business unit compared to the Group?

It is important to remember that we are not analyzing the finances for the sake of the analysis, but to make recommendations that lead to action and move the business in a positive direction. Therefore, we need to determine the correct path to follow and subsequently promote it.

In reality, all stakeholders don’t care about the same things, or the same level of detail. For instance, will the CEO really want to drill down into the numbers? No — they’d prefer the CFO to figure out the root cause of a drop in revenue and recommend one or more options to address it.

Moreover, when presenting to the board, it's crucial to keep the narrative succinct. Someone adept at understanding individuals recognizes that the board is already inundated with a significant volume of information, and their time is limited. Employing this level of emotional intelligence can yield rewarding results.

Enhancing storytelling skills for CFOs involves a considerable amount of trial and error. However, the key lies in self-awareness, actively seeking feedback, and understanding what resonates with diverse audiences.

Digital Transformation

As the financial stewards of their organization, CFOs and their teams have always worked to preserve and protect value as a part of their fiduciary responsibility. By leveraging automation, data, and a more modernized workforce, they can continue to safeguard the organization’s assets by increasing the speed, accuracy, and quality of financial data and analysis while mitigating financial and compliance risks.

CFOs can do their part in developing this digital culture by recruiting strong performers and change champions who can pave the way for setting a new digital mindset. They can enable digital capabilities by investing in new technologies and removing obstacles from the workforce that limit digital transformation.

For example, we at GMG have invested heavily in finance transformation over the last 3 years, including on-boarding of capable finance team members, investing, and promoting from within, as well as leveraging enhanced IT tools cultivating a culture of customer service within the finance function, as digitally accelerated organizations are all about agility and deploying people with the right skillsets to the right place. Today, many routine processes within GMG finance function are automated using Robotic Process Automation (RPA) that makes the overall processes efficient through accuracy, speed, trust. This allows the finance team members to focus on cross-functional business partnering through interpreting data, managing relationships within the organization, and making data-driven decisions.

By embracing technology that leverages automation for manual repetitive processes and enabling employees to focus on more value-add work, CFOs can build or enhance their workplace culture into one that is more likely to succeed in engaging their employees and retaining top talent, which ultimately leads to happier, more engaged customers.

Social responsibility - Sustainability

Sustainability has a variety of impacts and now that competitive advantage is at risk, companies can no longer afford to ignore it. Today’s CFOs are uniquely positioned to integrate ESG considerations into their company’s long-term strategic vision.

In the quest to align profitability with ESG considerations, companies are increasingly relying on their CFOs as change agents. And for good reason: CFOs possess a host of tools for forecasting, budgeting, allocation, and score-carding that they can use to bring sustainability factors into every business process and every decision about value creation. CFOs need to be acting now and integrating ESG into their finance function to take full advantage of the opportunities.

Looking forward

As we look forward to the months ahead in 2024 and beyond, the most successful CFOs will be those who prioritize workforce optimization, quickly implement efficiency-boosting technology, and attract and retain strong talent. With this, one more thing is certain about CFOs — the traditional roles of finance are shifting rapidly, and the new CFO will be a change agent for sustainability and continued growth across the enterprise.