by Bill Benson and Jeff McGraw

We have experienced a clear shift in the role of CFOs with our family owned and middle market clients. The CFO has always played a key role as a member of the executive leadership team and as a financial business partner. Risk management, cost containment, internal controls and increasing the value of the organization are typical areas of focus.

The CFO role has often been involved in strategic decisions but more as a catalyst rather than an alter ego. Today, CFOs find themselves involved in leading change, innovation, and business development decisions. One factor driving this change is the need for data and dashboards across the organization. In addition, the CFO is often at the helm solving problems and leading change, which also requires the right data to navigate successfully. This expanded role often requires transparency, more communication and emotional intelligence – (not always qualities associated with a finance leader.)

Many small to medium-sized companies have been operating fine with a controller who is more of a traditional accountant and less business focused. However, not every accounting leader is able to adapt and transition to a more conceptual and strategic role. This gap between the traditional controller and strategic finance leader becomes obvious and apparent when an organization faces a downturn, a growth spurt, or another type of change.

Here is a deeper look at what has changed in the CFO role.

Broader Responsibility Domain: While financial oversight remains a cornerstone, they now serve as key contributors to strategic planning, actively identifying growth avenues, and leveraging data for strategic insights as well as risk assessment.

Shifting Business Landscape: Middle-market companies face a host of financial and strategic challenges influenced by rapid digitalization, global economic shifts, and changing customer behaviors. CFOs must adapt to these evolving demands, displaying not only financial acumen but also an ability to pivot and drive innovation.

CFOs as Growth Catalysts: Today’s CFOs bring more than “check and balance” – they are growth catalysts. They play a vital role in shaping and executing the company’s growth strategy, proactively seeking expansion opportunities, forging strategic alliances, and overseeing financial aspects of mergers, acquisitions, and investments.

Tech-Driven Finance and Data Insights: The intersection of technology and finance is reshaping how CFOs operate. They harness advanced data analytics, AI, and automation to gain data-driven insights into the business. This empowers them to make informed decisions, optimize costs and foster a culture of innovation. Tech proficiency is now a fundamental skill for finance leaders.

Striking the Balance Between Finance and Strategy: Balancing financial stewardship with strategic leadership is an art. CFOs must maintain fiscal discipline while actively contributing to the organization’s strategic goals. This involves seamlessly transitioning between intricate financial analysis and high-level strategic thinking.

Fostering Collaborative Relationships: Effective CFOs understand the importance of nurturing collaborative relationships across the organization. They work closely with sales, marketing, and operations, to align financial strategies with broader business objectives. This collaboration fosters a culture of unity and shared goals. Finance has become every department leader’s “wingman” or more aptly put…wing person.

What Intangibles Are Critical? If you are a CFO and looking to build the right kind of capabilities…here are a few areas to focus your growth:  

• Business Savvy – Able to translate functional finance, HR & IT concepts to actions that support reaching business goals.
• Critical Thinking – Utilize critical thinking skills, breaking down problems into components and using data driven action plans to positively impact the business.
• Change Management – Bring emotional intelligence into play to advocate for change in a way that is digestible with minimal disruption. Successful CFOs are no longer command and control oriented. They need to be part of casting the vision and leading through influence.
• Agile – Able to navigate constant change to develop both short term and long-term solutions. Work in gray areas and adapt plans along the way.
• Team Builder – Able to build strong teams and get them focused on the right things that will drive results. Exert influence sometimes without direct authority.

Conclusion: The role of the CFO in middle-market enterprises is undergoing a remarkable evolution. No longer confined to managing finance departments, CFOs are strategic leaders driving growth, innovation, and success. By embracing change, cultivating collaborative relationships, and staying abreast of industry trends, today’s CFOs are well-equipped to steer their organizations into an exciting and dynamic future.