CFO and the C-Suite

Companies today are looking to ford a delicate course between innovation and stability in the face of persistent economic headwinds.

For CFOs, that means embracing the way that the role has begun to shift: finance chiefs are no longer “bean counters and the numbers only people looking backwards,” said Gina Mastantuono, CFO of software-as-a-service company ServiceNow. “More and more often, we are absolutely tapped to take on more responsibility.”

Moving beyond the numbers

CFOs have a unique, enterprise-wise vantage point into their organizations that very few members of the executive team share, which “gives us a unique ability to be strategists and not just numbers specialists,” Mastantuono said in an interview.

Taking advantage of that viewpoint as a CFO played a key role in ensuring the Santa Clara, California-based SaaS company “didn’t get out in front of our skis too fast” in the face of recent economic turmoil, she said. Being able to “quickly read the tea leaves” helped the finance chief to slow down hiring while avoiding the layoffs that many other large-scale technology companies conducted. 

“We didn't lay off and we didn't shut down hiring, we're still hiring,” she said. “We're just being really focused, really smart and really mindful and thoughtful about the roles.”

However, doing so required poking her head into areas that some may consider outside of the traditional CFO’s purview.  

“I was never that CFO that was only about numbers,” Mastantuono said. “I was always that CFO that sometimes got her hand slapped, because she was butting into other areas because I feel so passionate that those [are] areas I need to be involved in when you're thinking about the long-term trends of the business.”

What that means for areas like human resources or hiring is that Mastantuono spends at least as much time talking to ServiceNow’s chief people officer as she does its chief revenue officer because “talent strategy is part and parcel for the overall strategy” of the business, she said.

“If I'm not understanding, if I'm not helping to articulate what the growth levers of the future are going to be, how is she going to be able to hire the right people and hire the right skills?” she said of her relationship with the CPO.

Getting ahead of the innovation curve

Mastantuono credits the innate curiosity she’s always had as a key factor in her ability to fulfill the CFO’s changing role as a strategic partner, which has been a hallmark of her career.

Mastantuono has talked frequently about the learning opportunities her unconventional career path has provided her — following a six-year stint at EY, she hopped to a director of accounting role at Triarc Companies, then took assistant controller roles at InterActive Corp and Revlon, looking to try something different , she said in a February webinar.

“Each kind of big job that I left, I usually went into a different industry, because finance skills are so transferable for the most part,” she said. “But the ability to continue to learn by switching industries was super fascinating to me.”

That fascination eventually led her to ServiceNow, where “being a female CFO in a big cap tech company, it was too big of an opportunity,” she said.

Taking on more strategic responsibility outside of the CFO’s traditional remit is especially critical in today’s post-COVID-19 environment, when finance leaders are being tapped as key players in the digital transformation initiatives at their organizations.

As ServiceNow’s finance leader, Mastantuono is honing in on driving new innovations as the company looks to build on promising financial results. For its most recent quarter, ServiceNow reported $2.075 billion in Q2 2023 subscription revenue, a 25% jump year-over-year, and a 23% boost to total revenue of $2.15 billion.

It’s important for CFOs to “take advantage of the rapid disruption that’s taking place,” she said. “And if we don't take smart risks that drive net new innovation, we risk being left behind.”

The company is one among several that has taken steps to bring emerging technologies into its software. It has integrated generative artificial intelligence technology into several offerings on its Now platform, partnered with fellow software firm Cognizant and expanded its partnership with KPMG to accelerate AI automation in its products.

“I think CFOs have got to get more comfortable investing ahead of the curve,” Mastantuono said. “And possibly sometimes ahead of demand … and that's not always an easy conversation to have. But I think it's really important.”

Digital transformation is inching upwards on the executive priority list, but as companies look to reap the benefits of emerging technologies like generative AI, members of the executive team such as the CFO need to shift their thinking as well. 

Historically, technology was viewed as a cost to be managed, placing it squarely in the finance chief’s purview, but in this new environment, that is no longer the case, said Martha Heller, CEO of executive search firm Heller Search Associates.

“Of course technology contributes — is a value creator. Of course data is going to drive revenue,” Heller said in an interview.  “As such, CFOs must become comfortable with technology leadership being here at the executive table, rather than something under them to be managed as a cost.”

Creating an agile investment strategy

Opening up a space for technology leadership at the executive table is critical for organizations to be able to compete in the emerging “data economy,” regardless of company focus or industry. Whether it’s a retail, automotive or insurance company, data and software is “moving to the center of what we do,” Heller said.

Treating one’s technology investments as an area of value creation for one’s business can also help to attract key talent: 89% of software companies are already tapping AI as a product differentiator, CFO Dive previously reported, putting data scientists and related skills at a premium.

Therefore, executives “really have to start getting a little more knowledgeable about the impact that technology’s going to have on your business,” Heller said.

However, while companies are turning their money and funds to digital transformation, the current approach taken by many may not be yielding the best results: about half of digital transformation investments fail to impact performance or profitability, executives said in a recent survey by KPMG, for example.

That’s because investing in technology just for the sake of having technology is a “no no,” Heller said. For finance chiefs, leaving that mindset means understanding that the “entire way that you have funded and budgeted technology investments and projects is changing,” she said. “We are moving from capex [capital expenditures] to opex [operating expenses].”

Before, buying a new piece of technology was essentially a one-time deal, Heller said, but that’s changed with the advent of the cloud or subscriptions like software-as-a-service offerings. CFOs now need to think about their technology budgets in terms of agile development, rather than as a one-time capital expenditure, she said.  

Learning to talk tech

Effectively managing one’s technology investments nowadays also requires a shift to the traditional reporting structure which placed tech solely under the CFO’s remit. As they look to develop agile tech strategies, finance chiefs need to make room for newer leadership entrants — such as chief data or digital officer — which are pulling up chairs at the executive table.

Technology should not be “buried under the CFO anymore,” but financial leaders should “instead get behind your CIO or CTO or chief data officer or chief digital officer to promote the fact that technology is part of a value or a profit line, not merely an expense,” Heller said.

This can be tricky for finance chiefs at first glance: CFOs looking around at the changing C-suite are “going to see a lot of roles that they aren't used to, and what they're going to see is spender, spender, spender, spender,” Heller said.

For these emerging technology executives and the finance function to work together successfully, it’s important to learn to speak the other’s language, Heller advised.

“All those other executives are learning to talk finance so they can communicate with you — why don’t you learn a little tech so that you can communicate with them?” Heller said of CFOs. At the same time, the “lingua franca of the executive committee is finance,” she said.

“What I would do if I'm a new entrant in an executive committee, especially with an old company where they've been there for a long time, is I would first of all learn, what are the key metrics for this business?” she advised.

As the summer of Barbie mania winds down, one of the deceptively slapstick moments in the mostly cotton-candy-colored “Barbie” movie has stayed with me. 

It’s the boardroom scene (spoiler alert!) with its ominously darker tones, million-dollar view and a big shiny table surrounded by men in suits, including comedian Will Ferrell playing a fictional Mattel CEO. Margot Robbie’s Barbie —  freshly arrived in the “Real World”  from “Barbie Land,” where women rule — is quietly shocked by what she doesn’t find in the C-suite.

“Since I came all this way,” the still chipper Barbie asks, “Can I meet the woman in charge, your CEO?” “Oh, that would be me,” Will Ferrell says. She presses on: How about the CFO or COO? Also men, he tells her. “Are any women in charge?” a wide-eyed Barbie asks.

“We are a company literally made of women,” Ferrell deadpans. “We had a woman CEO in the 90s. And there was another one at some other time. That’s two right there.”

Taken on its face it’s a campy moment. But I agree with TikTok user Cat Quinn who quickly saw parallels between the Barbie movie and “The Wizard of Oz.” The C-suite scene recalls the wholesome red-slipper-wearing Dorothy when she finally got a chance to peek behind the curtain — only to find a merely mortal man instead of a wizard.

Likewise, director Greta Gerwig’s Barbie is giving the audience a peek into the corporate boardroom and reminding them who is usually in charge: men. Indeed, as of this year, women occupy just 13.7% of the CEO, CFO and COO positions in Fortune 500 and S&P 500 companies to date, a figure only up slightly from last year’s 12.3%, according to a report out this month from executive search firm Crist | Kolder Associates. 

You have to give Mattel credit for keeping that reality in the picture.

In scene after scene, Gerwig unspools the fantastical and hilarious story of Barbie’s journey. Along the way she pokes fun at the movie’s namesake brand as well as women’s place on the corporate ladder: they still hold just a fraction of the most lucrative and senior positions in corporate America. Maybe the company was inspired to take a bet on the realism by what could be seen as feminist roots: back in 1945 it was co-founded in a garage by Harold “Matt” Mattson along with Elliot and Ruth Handler, who named Barbie after her daughter Barbara. 

Still, given that women comprise half of the U.S. population and despite the steady gains diversity initiatives have made, the boardroom scene is both funny as well as disheartening because it’s so realistic.

Women are still wildly underrepresented in powerful C-suites. That’s even the case in the real-life Mattel, the maker of astronaut and doctor “Barbies,” which the movie portrays as helping girls learn that they can grow up to be anything they want. But all of the El Segundo, California-based Mattel’s five named executive officers are men, according to its latest proxy filing. Mattel did not respond to a request for comment.  

In a testament to our fractured times, the “Barbie” movie drew a split reaction from some men and women: protests came from conservatives who viewed its message as “anti-man,” while many women flocked to the movie clad in celebratory pink outfits. 

Gerwig, the film’s co-writer and the first woman solo director to have a film reach over $1 billion in ticket sales, told The New York Times, that her hope is that the movie “is an invitation for everybody to be part of the party and let go of the things that aren’t necessarily serving us as either men or women.” 

Gerwig does deliver on her invitation: The movie offers a hopeful if not altogether happy take away for the corporate world. It’s the moment when Gloria, the harried mom character played by America Ferrera who works as a Mattel receptionist outside the boardroom, gets a chance to pitch her idea for an “ordinary” Barbie. It’s a doll that she says may or may not be president or a mom but who, maybe, “just wants to get through her day feeling kind of good about herself.” 

Let’s hope Gloria gets a seat at the boardroom table in order to make sure that ordinary Barbie product gets on the shelves. And maybe, just maybe, the continued rise of women as CEOs and CFOs will make them, well, ordinary.

Now more than ever the CEO-CFO relationship should be more of a partnership than anything else, according to Michael Kelly, partner and management consulting consultant at EY. 

Between the growing scope of the CFO’s job duties and challenging economic conditions, finance chiefs should have a clear vision into all areas of the business, and a tight relationship with their chief executive counterpart is key for this. 

The QB of the organization

Between the pandemic ending, the economy reopening, supply chain issues and rising interest rates, finance leaders have had their hands full over the past few years, and in the past year especially.

“There’s a strategic piece to all of these issues — which covers driving products and markets — that the CEO takes care of, but there is also the financial piece which goes hand in hand with the economic impact of strategy,” said Kelly in an interview. 

The CEO and CFO relationship needs to be extremely tight, and more of a partnership instead of a mentor-mentee relationship, according to Kelly. 

The expanding role of the CFO in recent years has crept into the realms of tech, customer service management and even human resources, and led finance chiefs to do most of the heavy lifting of the C-suite.

This job creep has become a major source of stress, as CFOs are also still responsible for the storytelling of the business, and has even caused some tension between CFOs and their C-suite colleagues, according to previous reporting from CFO Dive.

However, Kelly believes that this expanding role is actually helpful to the CFO. “I actually view it as a positive for the CFOs,” he said. “We're seeing more and more CFOs actually elevate to the CEO role.”

“The CFO has to be a quarterback and a master of many town halls, so they've got ESG, they've got new tech, they've got reporting, controls, they've got tax forecasting and just thinking about all areas that they touch. They've got a good view of that company. And that actually parlayed into where you see more CFOs elevate up into the CEO role,” he said. 

Finance chiefs who take a seat at the decision making table are more likely to step into the CEO role and succeed, according to previous reporting from CFO Dive.

CFOs are taking on more and more responsibility at their organizations, with many stepping outside of traditional finance. Honing one’s operational skills can help finance chiefs to make better decisions and to eventually take on broader roles, said Narayan Menon, newly appointed CFO and chief operating officer for data productivity company Matillion.

A veteran executive with over 25 years experience in both finance and operations, Menon joined Matillion as its CFO and COO at the end of March, the company announced in a press release.

Before joining the Denver, Colo.-based data productivity company, Menon served as CFO for video platform Vimeo, where he led their finance and accounting and investor relations teams among others, according to his LinkedIn profile. He has also held key finance and operational roles for large-scale technology companies Intuit, Skype, Microsoft and Cisco, serving as corporate VP, finance for Inuit and as a senior director for both Microsoft and Skype.

Melding operational and finance skills

As the CFO role morphs outside of the pure finance function, skills and expertise in other key areas — such as digital skills — are becoming more and more of a value add for both current and future financial leaders. Tech-savvy leadership can be a draw for skilled talent, for example,  a recent report by Gartner found, noting a lack of digital skills in senior management could drive significant unwanted turnover.

Honing their data and analytic skills can therefore be hugely beneficial for CFOs and those looking to take such positions as the role changes, with Menon also suggesting such individuals “start thinking about more operational responsibilities earlier in their career,” he said in an interview.

“When I was at Cisco and Intuit, I took on a lot of operational responsibilities in addition to classic finance jobs and I think that really prepared me for this role,” he said. “So taking on broader roles, taking on operational responsibilities earlier in (your) career really positions you well for one, to be a better CFO in the first place and two, to take on a broader role like the CFO, COO (role) I have right now.”

In some ways, taking on operational responsibilities is a “natural extension” for a CFO, Menon said, who — an engineer by training — has always considered himself more of an operational CFO. Having that background can help finance chiefs make better decisions in areas such as capital allocation, for example.

“One of the key things in my view for any CFO when making capital allocation decisions is to fully understand the business, [and its] operations — otherwise your decisions are not going to be well-thought out,” he said.

As well as financial responsibilities at Matillion, Menon manages data and insights, IT security and other operational functions, working closely with executives such as the head of sales and of marketing.

“It is a much broader role, but it really helps having that data and analytics background” when it comes to making decisions like how to increase the number of sales leads, track growth and make processes more efficient, Menon said.

Making data top of mind

Matillion, a data productivity company, provides data integration and transformation solutions which pair with the cloud, enabling greater, faster access and helping to coordinate insights for their customers — a necessity in a world where now “even the smallest of small companies use data to make decisions,” Menon said.  

While financial leaders often cite data analytics and intelligence as a top priority, it often gets outshone by other key priorities such as cost management, growth and talent, according to a recent report by Deloitte.

Brushing up on data and analytical skills as a finance leader can help CFOs drive forward future projects  — especially as it is becoming steadily more difficult to achieve other strategic goals without a solid handle on one’s data, the Deloitte report stressed.

The growing necessity of data productivity — which Menon defined as the ability to both consolidate data into one place as well as draw insights from it — for companies, therefore, presents businesses like Matillion with expanding opportunities even in a lukewarm economic environment.  

Macroeconomic pressures have “definitely factored into the conversation” when it comes to how the company is approaching growth, Menon said, but “at the same time, we don't want to be hunkered down when the market opportunity is large. I think we have to balance that out,” he said.

An organization may be at high risk of losing its finance chief when that person and the CEO lack a solid relationship, according to a recent survey by Salveson Stetson Group.

Salveson Stetson, a national executive search firm, polled nearly 200 CFOs across public, private, and non-profit sectors, with 56% expressing an interest in looking at other job opportunities.

About 88% of finance chiefs surveyed ranked the quality of their relationship with their organization’s CEO as the biggest driver of their willingness to remain on board. After that, company culture (76%) and compensation (76%) were deemed “very important.”

The survey results come as many CFOs face pressures related to economic uncertainty and increased demands within their organizations. 

“The CFO has truly become the CEO's co-pilot in running a company," said John Touey, Salveson Stetson’s financial officer practice leader, in a press release. “If the relationship between these two leaders is not strong, the risk of CFO flight increases dramatically.”

CEOs should constantly seek counsel from their CFOs to create “stickiness” in the relationship, according to the release.

Salveson Stetson said its survey results also indicate that a significant amount of CFO transition is likely in the next five years, with nearly a quarter of respondents saying their next career move is retirement (24%). 

"If you don't have a ready candidate in your succession plan, more likely than not, you are going to be conducting an external search for your next CFO," Touey said in the release.

While some economists are cautiously optimistic about the future of the economy, executive leaders are still facing high inflation, rising interest rates and shifting consumer spending trends.

To best position their organization to weather continuing economic headwinds, the C-suite and other members of executive leadership must be united in their approach — but, as recent data from leadership advisory firm Russell Reynolds shows, many executives appear to be losing confidence in their executive leadership team’s ability to respond confidently to market uncertainty.

CFOs serve a crucial role during such times — finance leaders can help both to make the companies’ position more transparent to their C-suite peers and to help the executive team make strategic decisions to put the organization ahead in a rocky market, Jim Lawson, co-leader of the global financial practice at Russell Reynolds said.   

The CFO is “always going to be rooted in the reality of the financial data,” Lawson said in an interview, and “not all of their C-suite peers are going to be as analytic and numerate.”

Sharing the CFO perspective

With overall confidence in executive leadership declining — Russell Reynolds data found confidence among CEOs, C-suite leaders and other executive leaders fell by 4.9 points between 2021 and the end of 2022, according to its index — getting a clear picture into the realities of one’s business and how to respond to shifting macroeconomic factors is crucial.

CFOs have visibility into where the business is going, Lawson said, and are also often the first executive to have to explain the results they are seeing and “put their reputation on the line” to their boards, he said.

Companies’ finance leaders are also the ones responsible for making sure the company is not just cutting costs in order to brace for a potential downturn, but to ensure their firms are prepared for the other side of the dip. As their C-suite peers discuss where they might be looking to invest or what initiatives they want to focus on, “the CFO’s role is really to bring everyone back to the reality of the situation,” Lawson said.

In order to do so, CFOs need to be sure that they are “sharing their perspective and communicating” with others in the C-suite, Lawson said, while also keeping in mind that their fellow leaders may not have the same background or training when it comes to interpreting financial or market data. Building out stronger, individual relationships with others in the C-suite can help financial leaders better bring their peers on board with the realities of the market.

CFOs can take steps like spending more one-on-one time with their C suite peers and explaining how their individual department or business unit is going to be impacted by market shifts, Lawson said.

Making space for next-gen leadership

Besides CEOs and other C-suite leaders, the future leaders that are rising through the ranks are also reporting slumping confidence in the abilities of their leadership team, according to Russell Reynolds data. These include executives who are currently one or two levels below the C-suite, and are typically responsible for executing business strategies once decided.

Overall, confidence by these executives in their current leaders slumped by 5.6 points between 2021 and 2022, according to Russell Reynolds, with confidence in the teams’ ability to respond to critical issues retreating by 7.8 points.

Senior leadership and those behind them take different tacks — emerging leaders are trained to use technology to help predict outcomes, Lawson said, while more senior leaders rely upon their experience to help make strategic judgements.

“I think that there's tension in the system between the next generation leaders and more senior leaders, who are used to leading through more of their experience and wisdom, versus being as analytic as the next generation is,” Lawson said.

This dichotomy can also be seen within the C-suite, as “old school” and “new generation” CFOs tackle expenses and other challenges in different ways. Melding the wisdom of an experienced CFO with the data skills of the new generation would be the ideal mix for a finance leader, Vikram Bhandari, CEO and founder of technology and consulting firm Yantra previously told CFO Dive.

More and more CFOs are looking to data analytics and other technologies to help them assess future trends and make determinations on how certain moves could impact company profitability, Bhandari said — a trend which also makes robust relationships within the C-suite essential. A sturdy relationship between the CFO and CIO can help companies best optimize their technology spend, for example, providing key benefits both during and past a downturn.