From 2008 the world ( and mainly the developed countries ) started to suffer an economic crisis. As a consequence, the sales for most companies based in developed countries have decreased, the sales expectations done before 2010 for the period 2010-2015 did not meet the targets, mainly because China or India did not buy the expected product amounts and most companies have concentrated in cost reductions and not in growth.
In these tough conditions, some CFOs have became CEOs because the cost reduction have become the priority for some companies and the profile of some new CFOs is reducing its accounting part and increasing its cost reduction part.
Today some books as "Winning CFOS" from David Parmentier or "The new CFOs: How finantial teams and their leaders can revolutionize modern business" from Liz Merlon are explaning very clearly why the new CFOs has to be more strategist today. In an exceptional prologue, Liz Merlon states that the three main qualities of a CFO are:
1) An unquencheable curiosity to know and understand the company, the processes, the business and the people
2) An ability to relate to people.., not a friendly relationship, but a business relatioship. It is vital for the CFO to become a person that all key pople in the company trust and respect.
3) A strenght of character.. to say the unsayable and commmunicate the bad news. If the CFO has the ability to relate to people, people will listen and accept easier his / her statements.
The CFO has to put in place all controls to avoid all kind of risk. What does it mean?.. The company should have robust controls, a good risk management system and additionally he should consider the financial and accounting activities as processes, then the CFO should get dirty his / her hands in process redesign maintaining the quality but reducing the cost.
If we consider the company as a car, the CFO has to install and maintain the brakes in order that the car can go to the highest speed without risk. And what is the speed?.. yes, the growth.
What have done the CFOs to increase or keep the growth?.. Probably nothing or very little. That surprises a little, because most lecturers says that the new CFOs have to be more strategists.
This winter I went to a ski resort and I saw that in a rope tow, the assistant had a recorded with a very loud music. The waiting queue was very long because that was the only tow or lift chair close. I realised the ambiance of fun that the music was giving and I thought that there a bar could increase the sales for the ski resort and the waiting time in the rope tow should be smaller.. but quickly I thought as well that probably the ski resort had a CFO very orientated to cost reductions and he was not able to see this possibility of growth.
Sometimes cost reductions can be incompatible with growth, then the new CFOs needs to have a right balance to identify which expenses brings growth and which expenses can be reduced or eliminated, because they do not bring growth. That is the real value that the CFOs could give their companies the nex decade.
