Among professional epithets, few are as out of date as “bean counter.” And a quick look at today’s cadre of chief financial officers shows why.
Take Connecticut-based toolmaker Stanley Black & Decker, for example, where the CFO is leading a global transformation of the company’s business analysis and reporting capabilities. He has changed the forecasting process, basing it on the drivers of sales rather than on financial trends. In addition, by taking a multi- dimensional approach to performance reporting and harnessing the power of predictive analytics, the company is creating more accurate and transparent processes. The exercise has highlighted the CFO’s skills in the change management aspect of the complex project, which involves the harmonization of about 90 separate ERP systems.
Among the anticipated benefits for the company: a more diversified business portfolio and a roughly 30 percent increase in revenues by mid-decade—hardly a hill of beans.
In fact, the basic task of any CFO—monitoring the financial health of the company—has always been a foundation of good business practice. And without their financial acumen, and the essential work of record keeping and reporting that they oversee, no company could meet its compliance and risk management obligations.
Yet until recently, finance chiefs played only a narrow role in strategic decision making and virtually no role in business transformation. They were expected to take responsibility for the financial implications of the strategy, to be sure. But most remained almost entirely focused on their own function.
No longer. The Great Recession thrust CFOs into the corporate spotlight. If companies were to survive, they would require cost management skills of the highest order. And by pursuing a disciplined drive for operational efficiency, many CFOs excelled. Indeed, the success of their financial stewardship has left company coffers flush with cash—and the robust profits that have driven stock markets to new highs.