How is the role of CFOs changing?
That was a topic of discussion during “The New CFO” panel at Fortune’s Most Powerful Women Summit in Laguna Niguel, California, on Monday. I had the opportunity to talk with finance chiefs at Block, Nordstrom, Workday, The Estée Lauder Companies, and the incoming CFO at Meta about what they’re experiencing.
“I really see the CFO role as being an increasingly strategic one that helps our company balance aspiration and discipline,” said Amrita Ahuja, CFO at Block, a financial services company. Aspirations are the big business opportunities Block wants to address, and discipline is measuring the effectiveness of Block’s investments, Ahuja said. “The CFO role is well placed because we have real-time data across our entire business.”
Being strategic is an important element of the role, but CFOs have also become “the counsellor, the influencer, the truth-teller,” Nordstrom CFO Anne Bramman said. “But it’s also being a leader,” Bramman said. “It’s not just the financial piece or the strategic piece, it’s how are you leading across the organisation? Because many times, we’re the most senior women in the room.”
The CFO’s role has evolved to keep pace with new digital technologies, but at the same time, more women are moving into finance leadership positions. Read more about Women in Finance Systems here.
CFOs are tasked to “drive operation change, guide business strategy, and create value beyond just the financial statement,” Workday CFO Barbara Larson said. Businesses are also looking to CFOs to focus on “how you can leverage technology and think about data in new ways,” Larson said. “And how do you reinvent the way you think of talent as well?”
“I will soon be a brand new CFO,” said Susan Li, the VP of finance at Meta, who will begin her new position on Nov. 1. “Traditionally, people have thought of CFOs as a steward” and that includes “running a tight finance ship,” Li said. But today, CFOs wear so many more hats, like “the efficient operator hat,” Li said. “The CFO is really a partner in steering the business direction and product vision for the company.”
CFOs today have “a co-pilot role,” Tracey Travis, EVP, and CFO at The Estée Lauder Companies, said. “Many companies don’t have COOs, or are thinking of doing away with the role,” Travis explained. “So the CFO role has become much broader in recent years.”
Tech and finance alignment
The leaders noted the importance of collaboration between finance and IT teams.
“Tech planning and business planning go hand in hand,” Li said. “We have parts of our finance team dedicated to deconstructing tech problems and figuring out how to design and implement the digital transformation process.”
“Thirty per cent of our business is digital…and 75% of our investments are in tech,” Bramman said. “It’s an enormous piece of our infrastructure and an enormous piece of what we’re spending our money on,” she said.
At Block, “the business technology team and finance team partner to build automated tools, systems, and dashboards so product teams can get real-time access to data,” Ahuja said.
“I think it’s critical for IT to have a seat at the table,” Larson said. The first step for CFOs is finding new ways to work with CIOs, she says. “We have a vision at Workday to get to a zero-day close, and just streamline our process,” Larson explained. “We can’t do that by ourselves. We have to be in lockstep with our IT partners.”
At Estée Lauder, IT reports to Travis. “Strategic IT plays a very important role,” she said.
In the current macro environment, the leaders noted that their companies are making decisions with a long-term strategy in mind. “As we are navigating the increasing financial uncertainty and volatility, I think like many people in this room, we are building out our financial plans and budgets for next year,” Li said. Meta is looking at operating expenses, capital expenditures, and headcount, she said. “We expect that we are going to be slowing headcount growth steadily throughout the next year,” Li said.
“I think everyone is looking at how to reprioritise investment decisions aligned with the growth models of the company,” Travis said. “And it’s one of the most important roles that a CFO can play. Where do you invest? And where do you disinvest?” The decisions on disinvesting can be tough but necessary choices, Travis said.
This article was written by Sheryl Estrada from Fortune and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to email@example.com.