In this second part of our conversation with Chris Nester, Chief Financial Officer (CFO) at Planview, we explore the essential qualities and strategies a financial leader needs to thrive in today’s fast-paced Digital Age.
Building on our previous discussion about Chris’s journey, this post focuses on the traits that define successful CFOs and how they can navigate the complexities of modern finance.
I det här inlägget får du lära dig:
- How full visibility transforms CFOs into strategic leaders
- How CFOs foster effective business-tech collaboration
- Which technologies boost efficiency and drive results
What are the most critical qualities that a financial leader (and Finance department) must possess to succeed in today’s highly dynamic Digital Age?
We hear it all the time, but change is constant, and the pace is ever-increasing. You should always consider what’s coming next and be open to new ideas. Finance and accounting professionals might naturally resist change because it’s not how our minds are trained educationally, but you have to keep yourself informed.
I read the Wall Street Journal daily, watch CNBC, read books, and listen to podcasts. What we learned 20, 10, and even five years ago is still useful but not always relevant today. For example, who would have realized the impact of generative AI just a couple of years ago?
The question we must ask today is: What will be the “big thing” two, three, or even five years from now? That’s how a financial leader must think about the world.
We should stay continually curious and anticipate what’s coming next. With the rapid pace of change, being flexible, ready to pivot, and adaptable is essential for success.
Go Deeper: Finance as Champion of Transformation
Given your background in software and technology companies, what significant changes have you observed in this field over the years?
The shift to cloud infrastructure and SaaS business models has been transformative. When I started, companies owned their own large data centers. Then, they outsourced data centers but kept the hardware. Now, the rise of cloud service providers has marked a major change.
Businesses have increasingly adopted the SaaS model instead of the old license-and-maintenance approach. Over the past 10 to 15 years, this shift has led to new business models like Planview — software companies with high recurring cash flows that deliver products much differently than they were delivered historically.
How should companies respond to these changes?
Companies must continuously assess their products and market fit by asking: Are our products relevant to our target market? If not, how should we adjust our product mix or shift our focus to different markets?
With rapid changes happening, staying relevant is crucial to avoid falling behind. As a CFO, you need to guide quick decisions on capital allocation. Traditional budgets often fall short, so being able to move investments frequently helps keep the company agile.
How can the office of the CFO support and even drive digital transformation initiatives across a global enterprise?
First, you need to have the processes in place to drive those discussions (i.e., drive that allocation of capital) and be willing to make the hard trade-offs. CFOs of larger enterprises should strongly support digital transformation because their size typically means they have inefficient processes to address, wasted work to clean up, and slower innovation launches.
CFOs must tackle these challenges by ensuring their organization tracks the right metrics and maintains clear visibility to measure success. They should also be prepared to pivot quickly if things aren’t going as planned. It’s not just about sticking to the annual plan; adjusting strategies throughout the year as circumstances evolve is crucial.
What challenges do you, as a CFO, face in a sluggish economy with budget constraints?
When the budgets are more constrained, there’s top-line pressure that you must address by ensuring the organization is getting the most value from its investments. You can’t waste money on inefficient spending.
Value Stream Management (VSM) as a discipline can help organizations identify bottlenecks, increase throughput, and drive efficiency.
As a CFO, that’s music to my ears because then you could potentially free up the budget to invest in other areas. Having that visibility is a great opportunity for any company struggling to maximize its investments in a sluggish or volatile economy.
Many business leaders tout the importance of time management and focusing their teams on the work that matters most. How can these principles guide a CFO’s approach to adopting new digital initiatives and ensuring their successful implementation?
Focusing on what matters most is crucial for any leader. Prioritizing your team’s efforts is challenging, and deciding what not to focus on is important. This means deploying capital on initiatives that truly make a difference rather than those with minimal impact.
For example, investing in a project that might generate a few million dollars in new revenue in a couple years might seem appealing, but it’s often more reliable to allocate funds to a system that improves efficiency and saves $20 million over a decade.
Prioritization is key due to limited resources.
Many CEOs often favor revenue-generating projects for their appeal, but these carry higher risks and uncertainties. In my experience, cost-reducing or optimization projects are more predictable and offer better returns, providing stable and tangible benefits.
Finding the right balance between revenue and cost-efficiency initiatives is essential. CFOs are crucial in facilitating this balanced approach, integrating diverse perspectives, and ensuring that capital is allocated where it can deliver the most impact.
Bestselling CIO author Mark Schwartz writes that CFOs are positioned well to provide a competitive advantage for companies. How do you see Finance as a competitive advantage in today’s volatile digital age?
CFOs have a unique view of companies because they see the entire picture. Most leaders are still solely focused on the part of the company they’re leading. However, a CFO sees everything, and that’s where we can be a good thought partner to the CEO, who also sees across the entire company.
Financial leaders who take advantage of that view can help CEOs become more effective, provide suitable input to the board of directors, and use that view to drive enhanced enterprise collaboration. Additionally, you can use financial data to drive discussions of course corrections and make a pivot in real time rather than waiting for one quarter or a year to close.
The CFO role has evolved in the last 10 years to become a more strategic thought partner to the organization, not just someone who closes the books and does the budgets.
That evolution enables us to provide much more strategic consultation to the CEO, boards, and other organizational leaders.
From your perspective, how can CFOs foster collaboration between business and technology within their organizations, and what benefits does it yield?
Having that big-picture view can facilitate collaboration between technology teams and the broader organization, which is essential as technology teams play a crucial role in today’s companies. While they don’t need to be tech experts, CFOs should be able to speak the same language as tech leaders, understand their needs, and bridge the gap between them and business teams.
My experience in Investor Relations at Sabre taught me to simplify complex internal topics for external audiences, a skill crucial for effective discussions. I’ve often met with technology leaders to discuss projects, budgets, and improvements. By framing these discussions around the impact on P&L and shareholder value, tech leaders begin to view projects from a business perspective.
Instead of simply saying, “We need to cut five percent from our technology budget,” it’s more effective to ask, “How can we enhance efficiency to boost our investment in the product, and how will this investment affect our P&L and shareholder value?” This approach helps CFOs drive meaningful collaboration with technology leaders.
What advice would you give finance leaders who are eager to embark on their digital transformation journey and harness technology to drive business value?
The main thing is to accept that embarking on this digital transformation journey is probably not a choice. Every company will eventually go down this pathway, so I recommend embracing it. It’s part of the world we live in today.
You need to carefully allocate capital to support digital transformation and find ways to free up resources for investment. Having strong controls to monitor and adjust as needed is essential. But you’ll risk falling behind if you don’t embrace this shift and start the journey.
Läs nästa: Create a Successful Digital Transformation Framework
Final Thoughts and Next Steps
Chris highlights the need for ongoing learning and adaptability. He demonstrates how CFOs can lead digital transformation and address economic challenges by focusing on efficiency and making informed, timely investment decisions.
To dive deeper into these strategies, download the whitepaper Finance as Champion of Transformation. Uncover key CFO challenges, learn how Planview can assist, and explore three actionable steps to boost visibility and gain a competitive edge.
