CFOs in CPG companies have taken on an increasingly expansive and strategic role in recent years. This evolution continues today, accelerated by changes from the pandemic year. While 2020 brought growth gains in some categories, many large global CPGs are still chasing numerous digital natives’ double-digit growth. Moving forward, CFOs must elevate their role even further. It’s about transforming themselves to transform the business.
Seventy-eight percent of CFOs expect their role to be even more influential after the COVID-19 crisis.
Architecting 360-degree business value
In addition to delivering financial value, CFOs are delivering broader value that encompasses things like reinventing the business, reskilling employees and becoming more sustainable. It’s 360-degree business value that cascades across the enterprise, impacting consumers, customers, partners, employees, communities and the planet.
Doing this will well means that CFOs gain true cross-enterprise visibility so they can protect profitability and allocate resources appropriately. This focus on value creation also involves infusing a cost discipline ethos across the business, giving people easy-to-understand data insights to make informed decisions.
of CPG CFOs say Finance takes ultimate responsible for environmental, social and corporate governance in their company.
of CPG CFOs are collaborating more regularly outside of Finance.
Driving digital strategies
Digital underpins 360-degree business value. So it’s no surprise that CFOs are becoming digital dynamos. Many are tech-savvy innovators driving digital transformation—some with Silicon Valley-like flair. These CFOs do more than greenlight investments. They understand how technology brings value to the business.
This is key when it comes to M&A. CFOs are also evaluating acquisitions in terms of assets and channels. They are determining how the acquisition will contribute to the digital strategy. For many CPG players, it’s about acquiring digital capability to better serve and understand customers, strengthening their direct-to-consumer reach.
Seventy-two percent of CPG CFOs report that they have the final say in the technology direction of the enterprise.
Executing like a venture capitalist
To execute as value creators and digital strategists, CFOs must shift from a private equity mindset to a VC mindset. While private equity investors are about control and analysis, reductions and return on investment, VC investors watch trends and manage portfolios, analyzing data to assess how value is generated—and where it will come from next.
Fully embracing this role means that CFOs will need to derive more value from data. This will require more human and machine collaboration in the finance organization. While investing in more automation, CFOs will also need to build finance teams with skills in analytics, financial modeling and communications.
1. Make finance everyone’s business
By raising everyone’s financial quotient or “FQ,” CFOs can empower others with tools to simplify complexity and make data insight digestible for all.
2. Advance the digital agenda
CFOs must see digitizing the enterprise as a strategic differentiator, taking risks, experimenting and stopping investments that are not delivering.
3. Orchestrate for speed
CFOs need to take a lead role in moving the enterprise from a scale focus to a speed focus, sharing data and acting boldly to work in new ways.