Building a Resilient Business through Finance Transformation – 3 Steps Every CEO Should Take

Ash Noah, Vice President of CGMA External Relations at the AICPA

Building a Resilient Business through Finance Transformation – 3 Steps Every CEO Should Take

Businesses today face rapid economic, technological and social changes.  Technology is fueling disruption in every industry, and as organizations struggle to manage increased volatility, uncertainty and complexity, they need support to make better decisions faster. These business shifts and increasing risks require some major adjustments for C-level roles.

CEOs are focused on creating a resilient business model that will beat the competition, requiring them to let go of the day-to-day management aspects of the business so they can focus on more strategic issues, such as studying competitive forces and building company strength.

In turn, CFOs and their teams need to concentrate more on analytics that show how well the company is executing against specific plans, as well as providing business insights.

Thus, a transformation is needed in the finance function – one that moves CFOs and their teams from the traditional role of focusing on compliance, control and reporting to new business partnership and leadership role, where they are engaging with the business to enable better performance.

How CEOs Can Empower Finance Transformation

Transforming the finance function into a business partner that’s leading strategic planning and execution needs to come from the top down. Here are three steps for getting started:

1. Create Capacity.

The role of finance needs to move from a predominantly transactional function to an analytical function. Although most finance functions have modern systems, a significant amount of time is spent on manual processes. Constantly churning out reports and information, they don’t have the bandwidth to pull back and look at the bigger picture. The CEO needs to enable them to create capacity to be more analytical. This includes:

  • Eliminating manual intervention and creating efficiencies.
  • Creating in-house centers of excellence or outsourced shared service centers to develop and perpetuate best throughout the whole finance organization.

2. Develop Competencies.

Once the finance team has capacity, the focus can move to building competence as a business partner. This includes hiring new talent as well as creating talent within the team, by investing in structured training and competency development. However, the fundamental building block to this process is developing a core competency framework.

A competency framework goes beyond job descriptions and outlines the competencies finance leaders must possess. It’s a roadmap that enables you to hire, develop and retain the right people. The organizations that have already successfully transformed their finance teams all employ a competency framework to ensure that the skills required for success are actively identified, developed and present in their organization.

3. Build Credibility.

Finally, with the necessary competencies in place, the CFO needs opportunities to build and earn credibility for his or her team. In order for finance to be recognized as having the capabilities to participate in key decision-making and lead within the organization, the CEO needs to provide opportunities for the finance function to prove itself and demonstrate that it can be a supportive business partner.

Once the finance team has demonstrated credibility and can start leading the organization, the real benefits can be reaped.

Finance Transformation is Good for Business

Transforming the finance function provides several key benefits:

  • You’ll have a business partner rather than a data provider. Finance will be more engaged with the business, reacting faster and making better decisions – providing the company a competitive advantage.
  • Your finance team will have the credibility to lead or participate in projects to help transform and innovate the business.
  • The CEO will have more time to focus on business strategy, trusting the execution to his or her finance team.

Considering the amount of volatility and increasing risks businesses face today, companies have the best chance for success when they build a finance function that acts as a business partner to the CEO. Transforming the finance function will not only give you a competitive advantage, but will improve business resilience to outside forces of change, risk, and any other factors that could be detrimental to long-term growth. While some of the steps above may require a time and cost investment at the outset, the business benefits gained from the competitive advantage and insights finance can provide will far outweigh the investment.

About the Author

Ash Noah, CPA, FCMA, CGMA is vice president of CGMA External Relations at the American Institute of CPAs (AICPA). In this role, he serves as a liaison to CFOs and CEOs to understand how finance teams are evolving and guides AICPA initiatives to help management accountants create more value for their organizations. Noah is also responsible for elevating awareness among employers and finance leaders of the Chartered Global Management Accountant (CGMA) designation, which develops confident and competent business leaders through a structured approach to skills development. He works closely with the Chartered Institute of Management Accountants (CIMA) in the U.K. in that effort. 

Noah joined the AICPA in 2012. Prior to the AICPA, he served as CFO of the international unit of TNT Express, the global transport and logistics provider and led finance teams in 45 countries through significant transformation. He has been involved with mergers and acquisitions in Brazil, Chile, India and Spain.  

Noah is licensed U.S. CPA, Chartered Global Management Accountant and a Fellow of CIMA. He is based in Durham, North Carolina.