Mindset Reset: Three Traits CFOs Need To Better Partner With CTOs In Turbulent Times
Vice President, Technology Portfolio at IDA Ireland.
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In today’s changing business landscape, the role of the chief financial officer (CFO) expanded beyond the boundaries of the traditional expenditure controls and cash flow. In describing what it calls the “new CFO mandate,” McKinsey finds CFOs are increasingly responsible for more business areas, like digital activities, investor relations and procurement.
However, labor shortages, supply-chain bottlenecks, cyber threats and geopolitical risks are creating a slew of business challenges for organizations and their C-suite. This is leaving CFOs feeling like they need more time, resources, tactical know-how and data when it comes to making decisions, defining scope and initiating strategic foreign-direct-investment (FDI) projects.
With all the digital changes taking place, organizations are leaning into digital transformation to stay agile and make smarter business decisions. This gives CTOs (chief technology officers) an opportunity to bring a new dynamic to the boardroom, one that requires finance and technology to work together efficiently to help alleviate the pain points brought on by today’s global operating environment. What was once siloed departments—finance and technology—is now becoming a key collaboration partnership to business success.
With this trend in mind, here are three mindset changes to help CFOs better partner with CTOs to help lower investment risk and create additional value when bedding down roots overseas.
Willingness To Collaborate
Openly seeking non-financial-stakeholder internal partnerships signals a growth-mindset approach.
Encouraging other global leaders, such as a CTO, to adopt similar thinking during a global location strategy exercise, for example, can unlock new insights regarding how and where the company can leverage its technology more effectively to harness data and deliver a more data-driven organization. Cultivating a robust CFO-CTO relationship can also fill the gap between information voids while arming a CFO with real-time benchmarking data, tactical insights, risk evaluations and tacit technical knowledge often not found on a spreadsheet.
Likewise, a seamless flow of new information between finance and technology stakeholders boosts a CFO’s decision-making prowess. This can help guide them toward the correct allocation of global resources abroad and promote international enterprise growth while reducing longer-term project execution risk in unfamiliar markets.
In turn, this newfound connective tissue between finance and technology can unlock additional hidden value through foreign direct investment projects in a location that has a knowledge preference tax regime set to incentivize multinationals performing R&D and technology-related activity.
Advocating A Forward-Thinking Approach
Encouraging technology stakeholders to visualize their internal and external operating environment across a five-year or longer horizon while linking these states to their future capability requirements can help identify crucial trade-offs and inefficiencies.
While the CFO is not a technologist, driving a company through a digital transformation requires a trusted CTO partnership to truly understand the benefits of future-of-work technology. This partnership enables an organization, and its staff, to shape their current and future jobs through enhancements with technology, and not simply replacements by technology.
With greater communication, executive buy-in and lower organizational resistance, the CTO can equip a CFO with a holistic and unique view into the organization. This visibility can illuminate structural enhancements through mergers and acquisitions, greenfield investments or other corporate development opportunities, which might arise from the inevitable future ebbs and flows of the global economy, technology advancements, currency fluctuations or changes and shifts in cost or labor dynamics.
Finally, developing and deploying flexible-planning frameworks that encourage thinking beyond the short-term financial objectives and, instead, address the future operational challenges of a global company that is perhaps three, five or even 10 times in scale positions the CFO as a more valuable business partner to the CTO.
Being People-Centric For The Long Term
An increasingly distributed, hybrid and open global labor market creates opportunities for organizations that can adapt quickly to tap into new talent pools in stable overseas locations to optimize their global workforce strategy plans.
A reflective CFO—one who brings a worldly disposition and the emotional intelligence to strike an effective talent partnership with the CTO—can help to enthuse the best international technology candidates. Assigning responsibility to regional leaders to frame specific in-country talent availability challenges, opportunities and solutions—rather than a one-size-fits-all approach dictated by the finance team in headquarters—can also create a more agile, productive and resilient IT culture overseas.
This manner of heightened CFO-CTO collaboration and organizational alignment supports a sense of regional autonomy, reducing the “outpost” mentality for overseas engineering teams. It can lead to an enhanced global organizational capability for innovation and change efforts and create a more diverse internal talent bench from which HR can draw as the company grows.
The CTO Revolution
With a unified strategy between CFOs and CTOs, an organization is equipped with the expertise needed for smarter decision-making and workforce strategy optimization. A collaborated effort can lift internal and external communication levels, allow for the free exchange of information with less familiar but trusted stakeholders, foster organization-wide collaboration, lead to stronger key relationships and enhance an organization’s capability.
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