Today’s ever-changing business environment is more ever-changing than, well, ever before.
That puts the onus on financial leaders to steer their organizations adroitly through the shifting macro headwinds.
“Where previously you had low interest rates, easy access to capital, and a growth-at-all-costs mindset, you didn’t want to sit on cash; you wanted to deploy that capital,” StoreConnect Chief Financial Officer Matt James told PYMNTS for the series “A Day in the Life of a CFO.” “That’s all shifted now and given way to a more measured approach.”
The unpredictable macro environment reflects the need for organizational agility in today’s business landscape.
“It’s forced not only companies but whole industries to embrace new solutions and to adapt and adapt quickly,” said James. “And it’s underscored staff retention. If you have good staff retention, change can be managed much more easily.”
The aftermath of COVID-19 has brought about changes in work dynamics, supply chain disruptions and an increased emphasis on cyber defenses, he explained.
Cyberattacks are expected to double in quantity by 2025, with a growth rate of 15% and an expected impact on enterprise bottom lines of $10.5 trillion annually, he said.
On the positive side of technological innovation, automation, digital tools and artificial intelligence have all increasingly become integral parts of the finance function, helping CFOs and their teams do more with less — and helping their organizations capture more workflow efficiencies by removing legacy redundancies and repetitive manual tasks.
From streamlining document signing processes to enhancing communication within organizations, technology has played a pivotal role in improving operational efficiency, James said.
Still, amidst the evolving landscape, certain core principles have remained unchanged for CFOs.
“The role of the CFO has evolved over time and will continue to evolve,” explained James. “But if you come back to the core fundamental competency, the CFO is the financial steward of the company.”
After all, ensuring the responsible use of resources and adherence to corporate governance practices never goes out of style.
“We can change the type of hats we’re wearing, but we always have to make sure we cover certain bases and cross the T’s and dot the I’s,” James said.
To assist with this, James emphasized the implementation of a growth management system (GMS), a tool that goes beyond traditional learning management systems (LMS) by linking objectives and key results (OKRs). The system enables real-time tracking of progress toward objectives, providing a proactive approach to managing and achieving goals.
“We’re continuing to roll out automation,” he added.
As for his advice to other CFOs looking to navigate today’s economy and architect their organization’s strong and sustainable future?
“I couldn’t go wrong quoting Charles Darwin,” James said. “It’s not the strongest species that survives. It’s not the most intelligent, but it’s the one most responsive to change. So, I would say embrace change, but never change for change’s sake, and be diligent in the changes you make.”
“To make these changes, you must clearly understand the business and the industry you operate within, otherwise you risk falling into a ‘grass is greener’ scenario,” he added.
James highlighted the gradual nature of evolution and predicted that the next generation of CFOs, already within the field, will leverage AI more extensively.
“CFOs have a great influence in day-to-day operations, and integrating AI tools that can help with things like document signing to condense the signatory cycle can have an outsized impact with finance departments,” he explained. “There are a lot of documents CFOs need to execute.”
Still, James underscored that the adoption of AI within the finance office needs to be “measured” and implemented as appropriate, not just chasing what’s new because it is new.
And while he noted that “evolution in the CFO role doesn’t necessarily relate to cyclical macro factors,” James explained that he sees more, not less, monetary tightening ahead.
“North America will do well compared to others, but Europe in general not so,” he said. “There will be more distinct winners and losers, with the winners having better demographics.”
But no matter the realities of the economic environment, “CFOs are used to cutting one’s coat to fit the cloth,” James said.
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