It is evident that in this digital age, it is important for the corporate chief financial officer to be able to adapt to their evolving role in order to drive financial growth. This was highlighted by the CFO at RWE npower, Dr Jens Madrian, at the CFO Rising Europe Summit last week.
Madrian explained that as he was originally from an investment banking and finance background, he has the experience of dealing with the financial industries within a variety of industries. After alluding to a comment made in the opening chairperson welcome by Franky De Smedt, CFO at Tupperware which indicated that transforming frameworks is a challenge, Madrian consolidated three different functions for the operational CFO.
The first function Madrian phrased as the “steward” who ultimately has the responsibilities of a traditional CFO, which includes data gathering. The second he describes as an “efficiency leader” as accuracy is key within finance so insight can be delivered and processes can be streamlined. The third, and most important for the CFO to fully become operational, is the function as a “business partner” due to the relationship between business and finance increasingly changing.
Smedt defined the CFO of an organisation as a “driver for change” and Madrian reiterated this as the chief financial officer is under great financial pressure when dealing with regulation and compliance and work with increased levels of complexity. Madrian provided advice using an example of how the financial department at RWE npower drives forward using the lean steering concept, which delivers transactions more efficiently across the group rather than in different ways in different countries.
Madrian says that the traditional mindset was focused on data and governance previously and then it moved to business partnering, but now it is returning to the original attitude, which is because the bar has been lifted and transactions are now outsourced to a third party. In addition to this, he advises financial professionals to take a forward focus and not spend so much time looking backwards.
Turning strategy into value and this is what the CEO expects from the CFO and the focus should not only be on the cost. The CFO should encourage the business to think about growth and help frame this for the rest of the company when operations become more important and more and more COOs are beginning to report to the CFO.