Technology has evolved by leaps and bounds over the past few decades, and it continues to move forward at light speed. It’s an exciting time, as changes in how we do business quickly become dated or obsolete, and are replaced by newer approaches that help us do our work more efficiently and effectively, and in many cases saving considerable time and money.
As these changes have continued to take place, it’s been interesting to observe how the role of the Chief Financial Officer has evolved. Having spent more than two decades in the financial industry, I’ve watched and experienced firsthand how today’s CFO, as well as other financial professionals, work far differently than we did even 10 years ago. New technology has completely redefined what constitutes a “typical day” for the financial leader. From blockchain and fintech, to real-time data and beyond, it’s a brave new world. Fortunately, many financial organizations are realizing the need to stay current with processes and practices. That’s not only smart, but it’s also crucial if they’re going to continue to survive and compete into even the near future. On the other hand, some in our industry have been a little slower to jump on board. This is a problem because being even a little behind the curve could present real problems for them and place them at a competitive disadvantage. So here’s the deal: CFOs will need to acclimate to changes or risk falling behind. As an example, we already see how rapidly automation is beginning to replace human capital, and how artificial intelligence (AI) has been making its presence known and felt (even in our homes!) The CFO of the 2020s needs to stay aware of, understand and ultimately embrace these changes. Now. This means that financial leaders will need to adapt to learning new programming, analytical, communication, and other skills relevant to their positions. Because the CFO is expected to play an integral role in the company’s success, the modern CFO must be able to master a number of new tasks and processes so he or she can continue to facilitate business development. Their company’s shareholders are depending on them. I mentioned the importance of developing strong communication skills. These are absolutely key, as part of a CFO’s job is to convey vital information to a number of constituencies including the CEO, executive team, possibly clients, and even board members. It’s easy to perceive the CFO as a bean counter huddled over his or her adding machine, but today’s CFO is far, far away from that archaic stereotype. No, today’s CFO has a much higher profile and more visible role in the corporate hierarchy, and it’s now necessary for him or her to relay complex information to current customers and potential prospects. The CFO is also expected to guide business decisions with a more reasoned approach, backed by hard data, than ever before. The company’s financial priorities have shifted from addressing departmental needs to taking a wider, and much more educated, view of what will most effectively serve the company as a whole. Lest you think I’m only talking about the CFO’s new role, I’m not. The new paradigm means increased demands on the company’s entire finance function. It’s a given that CFOs can’t accomplish these tasks by themselves, so the truly smart ones will, out of necessity, surround themselves with a talented team and make developing and mentoring them a top priority. Technology has certainly brought forth new challenges, but it has also allowed the CFO and other financial leaders to move away from mundane day-to-day tasks needed to keep a business running and to take on a more diverse role. Today’s (and tomorrow’s) CFOs need to have a range of skills that are vital for future growth and success. Disruption is occurring in every area of the business world. Thanks in large part to new advances in technology, companies are doing things differently at every level. This will continue well into the future as new innovations continue to be revealed that help us do business more efficiently, effectively and with the potential to be more profitable.
This is a good thing for companies because it keeps them competitive and on the cutting edge. At the same time, it’s necessary for leaders to embrace, welcome and support disruption. But what is disruption? For general use, a dictionary would define it as an interruption; not necessarily a good thing. In our day-to-day lives, disrupting is synonymous with annoying. In the business world, however, the word has a positive connotation. In his 1997 book The Innovator’s Dilemma, Harvard professor Clayton Christensen coined the concept of disruptive innovation to refer to how successful companies don’t simply meet the existing needs of their customers, but also anticipate their needs in the future. According to Christensen, disruption has taken place when small companies with fewer resources than their mega-corporate counterparts resources have been able to displace the established system. How everyone works continues to change, and today’s leaders need to embrace that change or fall behind their competitors. In the financial industry, for example, blockchain and financial technology, or fintech, are transforming business models and economic models. Blockchain is now moving from what was not that long ago a nebulous concept to a widely accepted alternative method for making financial transactions. Numerous major companies are now actively leveraging it. Fintech, still an emerging concept, combines innovation and new technology like cryptocurrency and mobile banking to improve how financial activities take place. As digital has become mainstream in the business world, forward-thinking, disruptive leaders have found numerous ways to incorporate it into their daily activities. Data is everywhere, and we’ve found innovative ways to collect it, refine it and leverage it. It allows us to understand customer needs far more accurately than ever before. These developments are just a miniscule portion of what’s available to today’s truly disruptive leaders. As you read this, this is much more technology being developed that will change how we all work in the months and years ahead. It’s there for the taking. Leaders just need to be smart and savvy enough to appreciate the benefits and embrace new developments, or they will lose market share to others who do. It’s easy to stay on top of these developments. Everyone has access to a non-ending news cycle and can plan early to incorporate new methods of doing things that will improve how their companies operate. Watch, listen, learn, and adopt. When RLM Consulting begins working with a new client, one of the first questions we ask is - does the company have a mission statement? It’s essential to have a strong mission statement that articulates what your company stands for.
Most companies have mission statements, but they’re not always written as clearly and concisely as they should be. A good mission statement is often a helpful guide for defining what makes your company unique in a meaningful way to your customers. It also states where your company is heading with regard to long-range growth, and provides employees with a purpose; what are we working toward? When planning your mission statement, it’s helpful to sit down with the team and ask, “what does our company do for our customers, our employees and our investors?” Crafting a well-written mission statement is an opportunity to assess your client base and determine how your products or services will benefit them. You’ll also want to define the specific reasons that customers should choose to do business with you rather than your competitors. This point is important because of the competition that exists in the marketplace. You’ll want to create a mission statement that sets your company apart. Which leads to another point: Don’t forget to include any benefits you’re offering to the community and the world at large. In an era of social entrepreneurship, all types of companies today are giving serious attention to giving back in one form or another. If altruism is a part of your mission, say so. With a flipchart filled with ideas, it’s time to organize your notes down to a brief, impactful statement. Be clear in framing your ideas and making bullet points so they’re easily understandable. Considering that your mission statement will be available to a wide range of audiences, you’ll want to state things in a way that inspires people to have confidence in your brand or business, both inside and outside of the company. A solid mission statement has the potential to evoke a positive reaction and, in the case of your employees, it can make them not only proud of the work they do, but also turn them into ambassadors for the company. Remember, a mission statement should be brief, but it should also contain as much language as needed to get your point across. The verbiage should be a genuine in tone and relay how you would want your customers, employees and the public to perceive your company. |
Robert MortonToronto Executive and Principal at RLM Consulting Archives
January 2020
Categories |