The Changing Responsibilities of Financial Leadership

May 31, 2019
Financial Leadership

In the world of business, it is generally a mistake to think of an executive role as a strictly defined set of responsibilities. If you assume that success in such a role means identifying those responsibilities, gaining the skills to perform them well, and then plugging away at them until it’s time to retire, then you aren’t likely to find quite as much success as you expect. There are groundbreaking changes constantly affecting the business world, both across industries and within specific fields, and those changes force business executives to learn new skills, gain a working knowledge of fields that they’ve never investigated, and in general be much more flexible than executives of the past. Here are some examples from Zachari Cargnino and other financial leaders.

Technology

We all feel sorry for elderly people who find themselves left out of activities due to the difficulty that they have learning to use new technologies. Hopefully, someone in a financial leadership position has a firm grasp on the digital technologies that directly relate to his activities, but there are other areas of technology that are much harder to master. A CFO is expected to be intimately involved in decision-making for the company as it relates to adopting, developing, or even inventing new technology solutions, and without the ability to quickly learn the basics and understand the discussion, that CFO will be poorly prepared to ask questions, offer guidance, and help make decisions that will ultimately benefit the company.

Cultural Shifts

Another area that forces flexibility is changing the culture. In recent years, the business world has seen enormous changes in areas like gender pay equality, definition, and prevention of sexual harassment, and employee rights. Executive leadership teams that either fail to notice or refuse to acknowledge these changing culture expectations run the risk of losing their best employees to companies that promise to give them the treatment they feel they deserve. As an active member of the leadership team, a financial leader must be aware of these changes and help to guide the company in the right direction as it responds to them.

Clearly, these cultural changes often come with financial impacts on a company, and the CFO should be able to assess those impacts and give valuable input to the rest of the leadership team as they consider them. For instance, one growing trend is paternity leave, giving new fathers time off. The financial impact of adopting such a policy will have different effects on different businesses, and the CFO is responsible to weigh the options and recommend the best course of action for his unique business.

Change Management

These are only two instances of major areas in which large companies are seeing major changes. Today’s employees also expect more pleasant work spaces than in the past; a more casual relationship between executives and staff; competitive insurance, retirement, and other benefits; and many other factors that have a direct impact on the company’s finances. Whatever actions the company ultimately takes, the critical point is that the executive leadership team does not ignore the changes and insist on moving forward without questioning its own long-standing policies.

Change management has become a topic in its own right for business executives to study and master, as more of them realize that their company’s ability to perceive drastic shifts in their industry and respond appropriately is essential for its continued success. Whether the specific topic at hand is a gender issue, employee benefits expectations or a disruptive technology entering the field, financial leaders like Zachari Cargnino must be ready to respond with thoughtfulness, efficiency, and flexibility.