Departmental silos and a lack of communication among leaders is getting in the way of true transformation.
Socrates once said, “The secret of change is to focus all of your energy not on fighting the old, but on building the new.”
Over the past few years, we’ve experienced an immense amount of change in our daily lives – from the way we get our groceries to the way we interact with others. We’ve also seen change impact the workplace, with trends like hybrid work and the Great Resignation, as well as cultural shifts and uprisings, impacting how we think about culture, belonging, and performance.
This time of change has challenged our individual thinking, and as a result, our behaviours. The brands we support, the items we buy, the way in which we shop, travel, and entertain ourselves has evolved. As a result, businesses have had to shift their thinking as well. From ESG initiatives to a re-imagination of traditional business models – like the adoption of grocery delivery, for instance – businesses and their leaders, have been challenged to think outside of the box in order to meet the needs of consumers in a highly disruptive market.
And while an openness to change can bring about new opportunities like sustainable business growth, agility, and resilience, change also requires leadership – someone who can set strategic direction, showcase the value of change, and ensure change drives growth, not further disruption. Thankfully, the CFO has risen to the challenge and is now seen by many as a catalyst of change.
But can they deliver?
According to a recent Anaplan survey, commissioned in partnership with Deloitte, CFOs are seen as a strategic advisor in times of change. But there is misalignment when it comes to the way CFOs perceive themselves – and their priorities – compared to the way they are viewed by their cross-functional peers.
Beyond these leadership disparities, it’s also clear that departmental silos and a lack of communication among leaders is getting in the way of true transformation. In fact, the majority of CFO respondents (82%) and their senior colleagues (86%) agreed that their company’s response to recent challenges – like the transition to hybrid work and supply chain volatility – could have been improved with stronger communication and alignment between departments.
Connecting disparate business units
This is where the CFO must awaken their true potential and take on a leadership role in driving transformation forward – something they are well positioned to manage given their link to every facet of the business. Because making business decisions in a vacuum will only lead to missed revenues and missed opportunities, and the importance of connectivity cannot be overlooked.
CFOs can start to deliver this cross-functional visibility by re-imagining siloed processes and removing the legacy tools and systems that create data silos in the first place. This modernisation will help enable business leaders across the organisation to better collaborate on plans, forecasts, and potential actions, which is critical when change occurs, and decisions need to be made on the fly.
CFOs can also take on a leadership role in breaking down existing cultural tensions – which can be detrimental to businesses in times of change. For instance, in response to the survey, more than half of marketing and sales colleagues (55%) said that increased collaboration and connection with the CFO would reduce conflict between their teams. It’s clear that by expressing an understanding of the challenges felt across departments and working with cross-functional leaders to remedy those issues, CFOs can help make sure change is embraced throughout the entire organisation.
For businesses in Singapore, it seems the CFO has already largely embraced this leadership role. Almost half of cross functional leaders (43%) said they believe that Singapore CFOs are actively investing more time in cross-department collaboration, putting them well ahead of the global average (28%).
Making ESG a priority
Another opportunity for the modern CFO? Embrace ESG as a core responsibility.
ESG is a critical component of all businesses today. There is a higher emphasis on ESG implementation, especially as additional government initiatives push people in the direction of adopting such practices. A great example of this is the recent Monetary Authority Singapore (MAS) sustainability report, which highlights the steps the country is undertaking to strengthen its resilience to environmental risks. Working closely with financial institutions, businesses, and international counterparts, Singapore continues to deepen its sustainable finance capabilities.
At the same time, stakeholder expectations for companies to drive ESG initiatives are rising. Leadership teams are seeing the value of embedding ESG into their day-to-day operations and have set high bars for CFOs to take ownership now. These factors need to be embedded into the business’s decision-making processes, and CFOs must show visible commitment. But the survey shows that ESG management is not being prioritised accordingly. While ESG was identified as the second most common challenge that CFOs play a role in addressing (66%) by cross-functional leaders, CFOs ranked the management of ESG initiatives fifth on their priority list (70%), just above ensuring effective cybersecurity (57%).
With rising stakeholder and government expectations and mounting external challenges, it’s important for CFOs to realise the valuable role they can and should play in driving their organisation’s ESG goals and initiatives forward.
Evolving with the times
The path forward for today’s CFOs is not without its challenges – but the real opportunity lies in their ability to embrace their new role as a strategic leader and catalyst of change. Only then will CFOs be ready to help their organisations adapt to evolving economic conditions strategically and embrace change as a new opportunity instead of a constant roadblock.
