The role is continuously evolving: The CFO's role is becoming increasingly complex. With rapid advancement of technology, it brings both opportunities and challenges for CFOs, particularly in relation to cyber risk. As AI becomes increasingly sophisticated and assumes more mundane finance tasks, CFOs are grappling with the risk of creating a workforce overly reliant on AI with increased cyber risks.
To navigate this evolving landscape, CFOs of today are required to take on a hybrid skill set that combines financial expertise with technological acumen. As technology continues to transform business operations, CFOs need to be well-versed in emerging technologies such as AI, data analytics, and automation. They must embrace digital transformation and leverage technology to drive efficiencies, improve decision-making, and enhance financial insights while also implementing robust risk management strategies that can adapt to these technologies. It is a delicate balancing act. CFOs must not be overly eager to adopt new technologies without fully understanding the associated risks, but they also cannot afford to be left behind.
Further, the CFOs of today are also tasked with navigating the complexities of sustainability initiatives, regulatory requirements and stakeholder expectations related to ESG. With a growing emphasis on responsible business practices, CFOs must be kept abreast of ESG risks and opportunities to ensure long-term value creation. Additionally, the landscape of global trade is evolving, with shifting dynamics and changes in trade policies and geopolitical influences. CFOs must stay ahead of these developments, anticipate potential disruptions, and adapt their strategies accordingly to mitigate risks and seize new opportunities.
Addressing the Talent Gap: Developing the next generation of CFOs is a critical priority for organizations in today's rapidly evolving business landscape. As companies face increased volatility, technological advancements, and changing market dynamics, the role of the CFO has expanded beyond traditional financial responsibilities. Organizations are now seeking CFOs who possess a well-rounded skill set, including strong financial acumen, strategic thinking, leadership abilities, and the capacity to navigate complex challenges.
As we reflected on why finding the right talent was so difficult, a key question that was asked and reflected upon was - Are we trying to hire our clones?
Customised career trajectory: One key aspect of developing next-gen CFOs is acknowledging the changing expectations and motivations of younger talent. The younger generation values purpose-driven work, continuous learning, and opportunities for growth. To attract and retain this talent, organizations must meet them where they are and create a development path that aligns with their needs and aspirations. This may involve providing access to cutting-edge technologies, offering learning opportunities in uncertain environments, and fostering a culture of curiosity and learning agility.
Learning and development: To ensure the readiness of future CFOs, organizations need to invest in their learning and development. This can be achieved through a combination of on-the-job training, 1-on-1 coaching, and stretch assignments that expose them to different functions and challenges. By providing opportunities to work on cross-functional projects, CFOs can gain a broader perspective of the business and develop a well-rounded skill set.
Importance of networking: We also discussed how collaboration and networking can play a crucial role in developing next-gen CFOs. Bringing together CFOs, CEOs, and digital leaders in an ecosystem can facilitate knowledge sharing, idea generation, and collaboration. This can help CFOs stay updated on the latest trends, innovations, and best practices, enabling them to drive growth and navigate disruptions effectively.
Soft skills and leadership traits: Assessing and developing soft skills is another critical aspect of grooming future CFOs. While technical expertise and domain knowledge are essential, soft skills such as communication, storytelling, influencing, and execution capabilities are equally important. These were probably the biggest area many of the leaders agreed they were seeing as big gaps in the next generation of CFOs. Assessing soft skills can be challenging, but utilizing methods such as behavioural interviews, assessment centres, psychometric assessments, and reference checks can provide valuable insights into a candidate's interpersonal abilities and leadership potential.
Psychological safety: Another important need of the next gen is a culture of psychological safety which is also vital in their development. Encouraging an environment where individuals feel safe to take risks, learn from failures, and openly share ideas fosters growth and innovation. CFOs must lead by example, demonstrating humility, openness to diverse perspectives, and a willingness to learn from the younger generation.
In summary, developing the next generation of CFOs requires a multi-faceted approach that addresses the evolving expectations of younger talent, provides continuous learning opportunities, fosters collaboration, and emphasizes the development of both technical and soft skills. By investing in their growth and creating a supportive environment, organizations can cultivate a pipeline of future CFOs who are equipped to lead in an ever-changing business landscape.
Anupama Puranik is a member of Russell Reynolds Associates’ Board & CEO Advisory Partners and the Healthcare Practice. She is based in Singapore.
Lin Liu is a member of Russell Reynolds Associates’ Financial sector. She is based in Singapore.
Neha Agarwal is a member of Russell Reynolds Associates’ Financial Officers and Consumer sector Research team. She is based in Singapore.
Wesley Goh is a member of Russell Reynolds Associates’ Financial sector Research team. He is based in Singapore