Future forward

Tomorrow’s problems are not yesterday’s problems and CFOs will be in the driver’s seat navigating a new business environment. That’s the key message from Gartner’s Chief of Research for CFOs Alexander Bant, in his introductory remarks at the Gartner CFO & Finance Executive Conference at the end of May.

“This past 12 months for CFOs has really been about getting used to a higher cost of capital, planning for a recession, managing efficiency across the business, managing expenses, shutting down unprofitable parts of your company, and challenging teams to be more productive,” Bant told CFO Brew in an interview before his conference appearance.

But that’s all in the past, and CFOs need to orient themselves differently now. “Our main point is CFOs get paid to live 12 months in the future,” Bant said.

Looking forward, he said CFOs need to be preparing for the next business cycle, and “a return back to growth.” That means CFOs will have to manage a wide range of responsibilities within the organization.

That can range from ESG and DE&I work, about which Bant noted that “activist investors are really pressuring CFOs,” to hiring and handling compensation amid rising pay expectations, and concerns about burnout.

But essential to all of that is a focus on growth, and how to get there with an understanding of the trade-offs. In his firm’s study of 1,200 public companies during prior downturns, Bant said, “we found that only 5% of organizations were able to drive simultaneous top line growth faster than their peers and expand margins at the same time.”

Finally, he said, in many companies, CFOs are charged with not only transforming the finance function in a new digital age, but also leading broader digital transformation efforts, from transaction handling to supply chain analytics, to additional areas of data and AI work.

And the bosses don’t think they’re ready: “About four out of five CEOs and boards would say we’re not meeting expectations on those transformations.”