When I meet with CFOs or other senior leaders to discuss the current challenges and opportunities for the Finance function, we often talk about needing to be better business partners and how to be commercially active in our organizations - especially as corporate transformation becomes more the norm than the exception.
As a keynote speaker at the 2018 Handelsblatt CFO Congress in Munich this week, I had the pleasure of addressing this challenge and my message is that if you want to create value in the organization that goes far beyond the numbers, you should start seeing yourself as the Optimus Prime of your organization.
Optimus means ‘best possible outcome’ and Prime means ‘first’ in Latin, which are definitely characteristics that come in handy if you want to drive high performance throughout your organization. It’s also the name of the hero transformer in the Transformers franchise - the good guy who steps in to right all the wrongs. He’s known for his excellent leadership, sound decision-making skills and strong moral compass. Sounds like a good CFO, right?
In my opinion, proactive transformers are exactly what we Finance people can and should be for our organizations in the disruptive business world we live in these days. And I’m not just talking about transforming the Finance organization, for which it is definitely our responsibility to be proactive and push ourselves and our teams to really think outside of the box regarding solutions that allow us to be more efficient whenever possible.
I’m also talking about stepping out of our functional comfort zone and starting to help our organizations transform more broadly. This starts with helping the companies we work for build new capabilities - whether it’s turbo-charging analytics, digital initiatives or big scale process optimizations, finance leaders have a lot of experience to bring to the game. But what I’m really talking about here are those big transformation programs that completely reset performance expectations and fundamentally alter the way companies see themselves.
At Arla, we are right in the middle of a big transformation program. Earlier this year, we announced an ambitious program called Calcium that will change how we do business and deliver at least €400 million of EBIT improvement over the next two and half years.
We do this not only to continue to deliver a competitive milk price to our owners. We also want to stay at the top of our game as a leading global supplier of natural, nutritious and sustainable food to a growing world population.
Now, I’m not going to go into more detail about all the great things we expect to deliver with this program. What I do want to highlight is how Finance is absolutely core to everything we are doing to make this come to life. In my opinion, real transformation can’t happen today without Finance taking a key leadership role in how we get there. Here’s why.
The value of being able to cut through the noise these days is huge. Most executive managers I know feel the pressure of the increasingly complex task of making the right decisions due to the information overload and the matrix of systems we get it from. In short, it’s getting harder to drill down on the real value drivers and everyone is longing for transparency and concrete, easy to digest action items.
Finance is the corporate function with the most comprehensive understanding of the company’s value chain, competitive environment and the fast changing variables in each of them. This leaves us in a strong position to provide end-to-end visibility, deliver meaningful foresight, and ensure that the company is always focused on doing the right things.
And our role will only get stronger as we implement new technologies. In the last five years, Finance’s ability to project into the future has grown leaps and bounds at the companies I’ve worked for when it comes to external data mining and utilizing powerful data analytics for scenario planning. The way I see it, we’re implementing more automation and artificial intelligence offerings to drive down cost and increase quality and efficiency than almost any other part of the business.
This development enables us to take a more strategic, creative and holistic view on challenges and untapped business potential. And when we bring these insights to management discussions, it often comes with a clear mandate to play a big role in driving the change throughout the organization. I believe this is probably the biggest lever for finance to increase our impact over the next decade.
It might sound like a massive undertaking. But we don’t have to have all the answers ourselves. And we often have many more than we think. The reward is that we gain huge opportunities to expand our horizons and gain strategic impact on the transformation agenda.
No doubt, we will challenge the received wisdom of what Finance is there to do. It’s a transformation in itself to move away from a perception as the guys who are always looking in the rear view mirror to the business partners who can see down the runway.
So explore the potential in reconfiguring your role as CFO or finance leader within your organization. Be the Optimus Prime of your organization and drive the transformation and growth of not only your business but of yourself as a valuable business partner.