THE 5 FOCUS AREAS, IF THE CFO IS TO BECOME A STRATEGIC BUSINESS PARTNER

New possibilities and opportunities have become available to professionals within finance and financial management. However, the prerequisites for them to be realized are not part of the economics study curriculum. We have spoken to an expert in the development of tailor-made training programs for, among others, CFOs, who point to five focus areas and key competencies that need to be trained.

Christian Frantz Hansen is partner and co-owner of the Business Partnering Institute (BPI), who offers a wide range of services aimed at professionals and companies within finance and business development. Christian Frantz Hansen is responsible for BPI's Learning & Development department, which provides various services related to training and education courses that are tailored to employees who are engaged in various aspects of economics and finance. He therefore has professional insights into the new opportunities, CFOs have at playing a more central role in management teams, as well as what it takes if these are to be realised.

"Both new technological solutions and the methods used to optimize companies strategically have opened up completely new opportunities for the CFO regarding the way he or she engages in top management and especially in the sparring with the CEO.

Today companies have access to extract and analyse data from multiple sources, and they have the technological solutions to generate different scenarios and forecasts that can be used to make strategic decisions that gear the company to achieve greater competitiveness and better results. The key stakeholder to ensure that the company makes full use of these opportunities and has the skills to convey, put the potentials into perspective, and point out which strategic measures should be used to realize them, is the CFO. If the person in question approaches it the right way, it can provide a new and more central role in management compared to before", Christian Frantz Hansen explains.

But according to Christian Frantz Hansen, this means that the CFO must approach his work in a new way and in many cases acquire some new skills that have not traditionally been part of the job description:

"Without falling into clichés, the CFO may not traditionally have had such an outgoing or communicative role. It has – somewhat caricatured – been a matter of dry numbers in an Excel sheet. A recording function with a few annual spikes in connection with budgeting and the presentation of the final accounts. Assuming a role that requires active and visible interaction with the entire company and close sparring with the management team obviously requires a different approach to the task and the addition of some new tools".

The 5 focus areas

BPI's full program for education and training tailored for CFOs is comprehensive and with several different courses.

However, if Christian Frantz Hansen were to highlight five efforts, that a CFO with ambitions to realize his full potential and take on a new and more influential role in the company and its management needs to focus on, he would point to the following:

• Influence the strategy

The CFO must support top management in the efforts to assessing strategic options, influencing the team's objectives and identify ways to create value across the business. This requires that the CFO has a solid understanding of the core business and can see both opportunities and threats in the market, in order to be able to identify where the most realistic potentials lie.

• Influence the decision-making processes

The CFO must work closely with business teams throughout the company and contribute the relevant financial perspectives and thus help to qualify them in their decision-making process. By focusing on delivering a relevant and comprehensible communication of his insights and recommendations, the CFO can ensure that he or she becomes a source who is naturally involved in decision-making processes across all business areas.

• Become the Devil's Advocate

Decisions and priorities always benefit from being challenged and tested. Based on a strong credibility built up over time with factual and well-documented arguments and analyses, the CFO can secure a position as someone who ensures that all perspectives come into play and that one does not have blind spots that could end up in inappropriate priorities. The CFO must thus be able to balance between enabling his colleagues to succeed through support and sparring, but also dare to challenge and occasionally attack unsustainable business initiatives.

• Interact with stakeholders

In order to realize the full potential for influence, the CFO must actively interact with both internal and external stakeholders, thereby becoming one of their primary touch points and a valued representative of the company who can contribute qualified information and background knowledge. This will be essential, especially in relation to external stakeholders, in order to increase the company's credibility and the market's trust.

• Become the CEO's co-pilot

The CFO can become one of the CEO's primary sparring partners and supplier of insights, analyzes and recommendations, which he or she uses on an ongoing basis to make decisions. Partly based on the unique professional competences related to the financial area, the CFO can, via his interaction with all management teams across the company as well as the close relations with the external stakeholders, qualify the CEO to develop and implement the business strategy. As the CEO's close sparring partner, the CFO's role in the management team is simultaneously cemented as a driving and defining capacity for the decisions that are made.

New perspectives and new challenges

As mentioned, there are several elements that must be worked on if the CFO is to realize the full potential to become a strategic sparring partner for the company's management and actively impact the decisions that are made. However, according to Christian Frantz Hansen, the five focus areas are a good place to start:

"The recognition of what opportunities exist helps to open the perspective and create fertile ground for the further process of upgrading the competence catalogue. Some parts of it can be quite challenging, but it is my experience that with a qualification of which gains lie in working purposefully with them, brings us far", Christian Frantz Hansen concludes.