Whatever the business, making insightful decisions that help to drive the company forward has always been the goal for the executive leadership team, and a process in which the finance chief is beginning to play a larger and more significant role.
The days of the CFO “being passive are gone,” said Ryan Van Hatten, CFO for FP&A and financial software provider Prophix. “We have to be more strategic to the organization, whether we've come from an operational background or not.”
The CFO as problem solver
The CFO is always going to be a key person on a CEOs’ leadership team, Van Hatten said, a view that is shared by other financial leaders: Especially in turbulent times, the finance chief needs to act as the “glue” of the leadership team, Rachel Stack, CFO of data center company Cologix told CFO Dive in a previous interview.
However, that means CFOs need to adjust to a new way of working within the business, keeping their eye on the forward horizon: the CFO of old was always “sort of backward-looking,” Van Hatten said, perhaps looking forward for basic processes such as budgeting. As the role has evolved, however, it’s “become a lot more than reading the tea leaves of what's to come and making decisions based on that,” he said.
As the role of the CFO shifts, it’s important for finance chiefs to take point as a strategy leader inside of their organizations: a good CFO is a good problem solver, Van Hatten said.
“You have to be able to look across an organization, figure out quickly where those biggest fires are, and where you can have a big impact,” he said. “And then be willing to be the person putting yourself out there to make that change and drive it through the organization, whether that's with technology, or it's changing processes, or even changing people around and changing roles around.”
While the growing list of responsibilities being added to CFOs’ dockets is not new, many may still be struggling to adjust to playing that more assertive, transparent role. Van Hatten pointed to a June survey by accounting firm Ernst & Young, which found only 32% of CFOs said they always speak up when they have a differing opinion. Only 30% said they always challenge other members of the executive team when they disagree, the survey also found, both figures that surprised Van Hatten.
“I feel like most CFOs for the last decade, at least, should have been in a position where they really can be more, more strategic within the business and more willing to share their views with their CEO,” he said.
Moving from collection to insight
An 18-year veteran of the Mississauga, Ontario-based company, Van Hatten has served as its finance chief since January 2022, according to his LinkedIn profile. Van Hatten started out as a senior consultant with Prophix in 2005, traveling and working on site with finance departments to help implement its software.
This was a “really good learning experience,” he said, which helped him to get more familiar with the nuts and bolts of finance operations, as well as with the differing aspects of Prophix’s own business — helping to build up credibility and rapport when he took the top financial seat.
“A lot of times when a CFO comes in, it's like, ‘Oh, great, this accountant is going to come in and tell me how to do a sale or how to do marketing or how to change this process,’” he said. “But now, I can actually sit back and say, ‘Well, actually, marketing group or sales group, when I was in this operation… here's what I did, and here's all the things that I learned.’”
Leaning more heavily on data to help drive decisions has also helped Van Hatten to take his spot as a key strategic partner within the business.
Many CFOs could still be utilizing outdated systems or siloed data because they are more focused on ensuring the reports they need to get out do so on time — a need to deliver which has made them reluctant to make large-scale technological changes, Van Hatten said.
This is an attitude that is shifting with the arrival of the new generation of CFOs who “aren’t afraid to go in there and find processes that are manual and try to automate them in whatever way that they can,” he said.
The dawn of new technologies such as generative AI is also something that could help CFOs nudge their finance teams away from being the mere collectors of data to being the teams that put it to effective use inside of the business.
Such tools mean that rather than spending time arguing about whether the numbers are right, “it’s kind of all understood, and all of the automation that's been put into place… have the right checks in place, so that we all trust the data that we're looking at, and then spend a lot more time thinking about what it actually means,” Van Hatten said.
“It's empowered the CFO with all of this data and information so that they can be that one person in the company that knows all the data and understands all the intricacies and ins and outs,” he said.