The Role of the CFO: Navigating the Perception Gap

December 07, 2021 By Dave Chase

There is a worrying trend in the world of senior financial leadership: an increasing number of companies are unaware of the value CFOs can bring.

Amplēo blames it on the current CFO perception gap. Let’s discuss what that is and what the role of the CFO really should be.

The CFO Perception Gap

We’ve noticed a direct correlation between the size of an organization and their perception of what the role of the CFO should be in a company. 

Smaller organizations tend to not fully understand how a CFO can add value to their business. These organizations are usually the ones that assume CFOs are primarily responsible for accounting and forecasting. While these tasks are functions that a CFO can tackle, they don’t even scratch the surface of the value of a CFO.

Meanwhile, as a company matures, they begin to view CFOs as strategic partners who can develop long-term financial plans that set the company up for growth and success.

What’s Causing the Gap?

Why does this gap exist? There could be a myriad of reasons, but we’ve narrowed it down to a couple:

CFOs of the Past (Self-Inflicted)

Part of the problem may be the fault of CFOs (or at least those in the past). Before, a CFOs primary purpose was to protect assets. That led many CFOs to be so protective of the assets that they didn’t end up doing anything to grow them.  

The Evolution of the CFO Role

Luckily, the role of the CFO has evolved to be more focused on value creation—finding a way to actually grow the assets rather than protect them. Many CFOs can even manage this while working remotely.

But here’s the problem: many CEOs and company execs are stuck with the perception of the old type of CFO mentioned above. Because CEOs don’t understand this new and developing value, that makes them slow to adopt CFOs today.

How to Close the Gap

What can be done to close this gap and show the true value of CFOs in your business? Simple: by becoming a transformational CFO. Let’s talk about how to become a CFO who can inspire this change.

How to Become a Transformational CFO

The key to becoming a transformational CFO is the ability to frame up the right decisions, financial and otherwise, that an organization should make. How can you do that effectively? We suggest that there are three steps to doing so:

1. Create a framework that clearly illustrates how value is created in the organization.

Too often in business, people only tell the CEO what they want to hear, which sometimes leads to bending the truth. While doing so may keep you in the good graces of the CEO, it smothers the more inconvenient facts with flowery and misleading language. 

Unfortunately, value cannot be increased with hyperbole—it needs true data.

To be transformational, CFOs must look at the data they gather and deliver a completely transparent report of what they’ve found. From that report, CFOs can create frameworks that genuinely drive good business decisions.

2. Invest in and upscale the organization’s finance teams.

Improving finance teams doesn’t just mean looking for the best candidates—though that is part of it. To truly be competitive in today’s market, CFOs must be willing to invest in technologies that upscale organizations. These are items like:

  • Artificial intelligence: AI technology can help finance teams augment their own intelligence, helping them sift through mountains of data to find the really important information.
  • Automation: Manual processes plague too many finance departments, causing teams to take more time to complete menial tasks. Automation will help remove that burden and allow CFOs to focus on more important tasks, like data analysis.

3. Motivate the team to execute your finance strategy.

Once finance teams are properly trained on ROI thinking, they then need to go out into the organization to teach others this mentality. This will help the finance department develop the respect the CFO needs from the organization to properly execute their strategies.

Learn More about How CFOs Drive Value

As CFOs focus on these three points, they will increase their ability to drive value and become transformational CFOs.

If you want to learn more about what CFOs can do for your business, reach out to Amplēo. Our representatives will be more than happy to detail exactly how a CFO can change your life.

Are you ready to make finance

a competitive advantage?