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What is the first thought that comes to your mind when you hear the word "Chief Finance Officer" (CFO). Let me guess; accounts, finance, taxation, numbers, excel, budgets, the guy who doesn't smile etc? Well if you picked one of the above choices or were even close to one of the above then let me tell you what a modern day CFO is role has evolved into.
Need For A Dynamic CFO In Changing Business Environments - Virtual CFO Services
Need For A Dynamic CFO
In Changing Business
Environments - Virtual
How A CFO Can Help?
What is the first thought that comes to your mind
when you hear the word "Chief Finance Officer" (CFO).
Let me guess; accounts, finance, taxation, numbers,
excel, budgets, the guy who doesn't smile etc? Well if
you picked one of the above choices or were even close
to one of the above then let me tell you what a modern
day CFO is role has evolved into.
A CFO by definition is the man in charge of the
company's accounts, finances, taxation and
commercials. It is a given that a CFO should have
the competency to smoothly run these
departments with his team. But having only these
skills is no longer an accepted skill set for a good
quality CFO. With the changing business
environments, companies are all the time looking
for that dynamic CFO who is able to cope up with
the uncertainties and the challenges that the role
demands from them. A modern day CFO is
expected to contribute to the business beyond the
What are the qualities expected in a
1. Soft-er Skills - Soft skills have become one of
the most important tools for a CFO. CFOs are
spending lesser time in front of excel sheets and
more time in strategy meetings and discussions.
Motivating the team, negotiating well with vendors,
pricing, influencing strategic decisions are as
important as having the TDS paid on or before 7th!
2. Strategic Mindset- Numbers are no longer the
only deciding factor for strategic decisions. CFO
needs to evaluate the project beyond the numbers,
understand the market, map the competitors and go
beyond ROI and EBIDTA multiples.
3. Wearing different hats - CFO should also be
wearing different hats depending on the need of the
business which may go beyond the F&A matters.
4. Ownership - CFO should think like the CEO /
promoters. He is anyways a Quasi CEO. He should
always have a sense of ownership towards the project /
company. For a CFO the next natural progression is to
step into the CEO's shoes. Take for instance, Indira
Nooyi who joined PepsiCo in 1994 and worked her way
to CFO, a position given to her in 2001. In her
command, Nooyi restructured the company and led
multiple acquisitions, including Tropicana in 1994,
Gatorade, and a merger with Quaker Oats Company. It
was in 2006 that she became the fifth CEO in PepsiCo
5. Quality Team - CFO should always try to get people
with the right experience. You want people that can
think beyond just the accounting and can understand
the business as well because they are going to be in
dynamic environment, you want people to be able to
think outside of just debits and credits. Businesses
have become so uncertain and complex these days
with increasing dependence on external factors. A
change in local law of the land, one accident at the
factory, some MNC/ competition entering the market
with huge funds, change in technology are some of
the factors for which no company can foresee.
The best a company can do is to have a back up plan
in place. In these situations a dynamic CFO is
preferred as compared to a CFO who always plays by
the book. The demand for these CFOs is high, but
qood quality individuals are not in abundance.
Compensation packages for CFOs are also changing
dynamically with 20-30% of remuneration is linked to
the performance of the company. The CFO of the
company is usually amongst the top 2-3 senior most
(and highly paid) employees of the organisation.
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