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In today's rapidly evolving business landscape, CFOs play a vital role in driving profitability and ensuring long-term success. With the advancement of digital technology, CFOs have the opportunity to leverage innovative tools and strategies to optimize financial operations and enhance profitability. This article explores the various aspects of incorporating digital technology in finance and provides insights into how CFOs can harness its potential to drive profitability.

Understanding the Role of a CFO in the Digital Age

The role of a Chief Financial Officer (CFO) has greatly evolved in the digital age. Traditionally focused on financial planning, reporting, and risk management, CFOs now play a strategic role in leveraging digital technology to drive growth and profitability.

In today's fast-paced and interconnected world, businesses are increasingly relying on digital tools and platforms to streamline operations, gain insights, and stay competitive. As a result, CFOs have become key players in navigating the complex landscape of digital finance.

One of the primary responsibilities of CFOs in the digital age is to understand and anticipate digital disruptions in the finance landscape. By staying up-to-date with emerging technologies and market trends, CFOs can proactively identify opportunities to optimize financial operations and enhance profitability.

With the advent of digital technology, CFOs have access to vast amounts of data that can be used to drive informed decision-making. By harnessing the power of data analytics, CFOs can gain valuable insights into customer behaviour, market trends, and financial performance. This data-driven approach enables CFOs to make strategic financial decisions that align with the organization's goals.

The Evolving Responsibilities of CFOs

As digital technology continues to transform the finance function, CFOs are faced with new responsibilities and challenges. In addition to their traditional roles, CFOs are now expected to drive digital transformation and innovation within their organizations.

CFOs are increasingly responsible for evaluating and implementing digital tools and systems that can optimize financial operations, such as cloud-based accounting software, robotic process automation, and data analytics platforms. These technologies streamline financial processes, improve accuracy, and provide real-time insights for better decision-making.

Furthermore, CFOs are now playing a critical role in cybersecurity and data privacy. With the increasing risk of cyber threats and data breaches, CFOs must ensure that their organization's financial systems and data are secure and compliant with regulatory requirements.

To meet these evolving responsibilities, CFOs need to develop digital literacy and stay abreast of the latest technological advancements in finance. Embracing digital technology is crucial for CFOs to drive profitability and maintain a competitive edge in today's digital age.

The Importance of Digital Literacy for CFOs

Digital literacy is essential for CFOs to effectively incorporate digital technology in finance and drive profitability. It involves understanding how digital tools and platforms can enhance financial operations, make data-driven decisions, and identify growth opportunities.

Developing digital literacy requires continuous learning and staying ahead of emerging technologies. CFOs should actively seek opportunities to gain knowledge and experience in digital finance, such as attending seminars, webinars, and industry conferences.

In addition to technical knowledge, CFOs also need to develop soft skills such as communication, collaboration, and adaptability. These skills are vital for effectively leading digital transformation initiatives and driving cross-functional collaboration within the organization.

As the digital age continues to reshape the business landscape, CFOs must embrace the opportunities and challenges that come with it. By embracing digital technology, developing digital literacy, and staying ahead of emerging trends, CFOs can play a pivotal role in driving growth, profitability, and success in the digital age.

The Intersection of Finance and Digital Technology

The intersection of finance and digital technology presents numerous opportunities for CFOs to improve profitability and drive growth. In today's fast-paced and interconnected world, the finance landscape is undergoing a digital revolution that is reshaping the way financial transactions are conducted and managed. This shift towards digital finance has not only resulted in increased efficiency and reduced costs but has also brought about significant improvements in customer experience.

One of the key ways digital technology is changing the finance landscape is through the rise of online banking, mobile payments, and digital currencies. These innovations have made financial transactions more accessible and convenient, allowing individuals and businesses to manage their finances anytime, anywhere. With just a few taps on a smartphone, people can transfer funds, pay bills, and even make purchases, revolutionizing the way we interact with money.

But the impact of digital technology on finance goes beyond just convenience. It has also enabled the automation of routine financial processes, such as invoice processing and financial reporting. By leveraging technologies like robotic process automation (RPA) and artificial intelligence (AI), CFOs can streamline these tasks, reducing the risk of errors and freeing up valuable time for strategic initiatives and value-added activities.

Furthermore, digital technology has facilitated the integration of financial data from multiple sources. In the past, CFOs had to rely on fragmented and siloed data, making it difficult to get a comprehensive and accurate view of the organization's financial health and performance. However, with the advent of advanced data integration tools and cloud-based platforms, CFOs can now have a holistic view of their financial data, enabling more accurate forecasting, better risk management, and proactive decision-making.

Key Digital Technologies Impacting the Finance Sector

Several key digital technologies are transforming the finance sector and have the potential to significantly improve profitability:

 

Artificial intelligence and machine learning:

 These technologies enable CFOs to automate data analysis, identify patterns, and make accurate predictions for better financial planning and risk management. With AI-powered algorithms (ChatGPT), CFOs can analyse vast amounts of financial data in real-time, uncovering valuable insights and trends that can drive strategic decision-making.

 

Data analytics:

Advanced data analytics tools allow CFOs to extract valuable insights from financial data, enabling them to identify cost-saving opportunities, optimize pricing strategies, and improve profitability. By leveraging data visualization techniques and predictive analytics, CFOs can gain a deeper understanding of their business performance and make data-driven decisions.

 

Blockchain:

The use of blockchain technology in finance ensures transparent and secure financial transactions, reduces fraud risk, and streamlines processes such as supply chain financing and cross-border payments. By leveraging blockchain's decentralized and immutable nature, CFOs can enhance the security and efficiency of financial transactions, eliminating the need for intermediaries and reducing costs.

 

Risk management systems:

Digital risk management platforms enable CFOs to analyse and mitigate financial risks in real-time, enhancing the organization's ability to respond to potential threats. By leveraging advanced analytics and real-time monitoring, CFOs can identify emerging risks, assess their potential impact, and take proactive measures to mitigate them, safeguarding the organization's financial stability.

 

These digital technologies are not only changing the way finance operates but also presenting CFOs with new opportunities to drive growth and profitability. By embracing digital transformation and leveraging these technologies effectively, CFOs can position themselves as strategic partners within their organizations, driving innovation, and shaping the future of finance.

Strategies for Incorporating Digital Technology in Finance

Successfully incorporating digital technology in finance requires strategic planning and careful implementation. The following sections discuss strategies for identifying the right digital tools for your organization and steps to implementing digital technology in finance operations.

Identifying the Right Digital Tools for Your Organization

Before implementing digital technology in finance, CFOs need to evaluate their organization's specific needs, challenges, and goals. This involves conducting a thorough assessment of existing financial processes, systems, and data requirements.

CFOs should collaborate with finance and IT teams to identify digital tools and platforms that align with the organization's objectives and budgetary constraints. It is crucial to select technology solutions that are scalable, flexible, and provide a seamless integration with existing systems.

Furthermore, CFOs should consider the long-term impact of the selected digital tools on profitability and return on investment. Conducting a cost-benefit analysis and seeking input from key stakeholders can help in making informed decisions.

Steps to Implementing Digital Technology in Finance Operations

Once the appropriate digital tools have been identified, CFOs need to develop a comprehensive implementation plan. The following steps can guide CFOs in successfully integrating digital technology in finance operations:

 

Define objectives and scope:

Clearly define the objectives and scope of the digital transformation initiative, keeping in mind the organization's overall strategy and financial goals.

 

Engage stakeholders:

Involve key stakeholders, including finance, IT, and other relevant departments, in the planning and implementation process to ensure buy-in and collaboration.

 

Allocate resources:

Allocate the necessary resources, such as budget, personnel, and infrastructure, to support the implementation and ensure smooth adoption of digital technology.

 

Train and upskill:

Provide training and upskilling opportunities for finance and IT teams to effectively use the digital tools and maximize their potential.

 

Monitor and evaluate:

Continuously monitor and evaluate the performance of the digital technology, gather feedback, and make necessary adjustments to ensure its effectiveness in driving profitability.

Measuring the Impact of Digital Technology on Profitability

To evaluate the effectiveness of digital technology in driving profitability, CFOs need to establish key performance indicators (KPIs) and measure the return on investment (ROI) of digital initiatives. The following sections discuss the key KPIs and the evaluation of ROI:

Key Performance Indicators for Digital Technology in Finance

The selection of appropriate KPIs depends on the specific objectives and scope of the digital initiatives. Some common KPIs for measuring the impact of digital technology on profitability include:

 

Cost reduction: Measure the percentage reduction in finance-related costs, such as processing costs, error correction costs, and labor costs.

 

Efficiency improvement: Measure the time savings and cycle time reduction achieved through digital tools and automation.

 

Forecast accuracy: Measure the improvement in forecast accuracy and the ability to proactively identify risks and opportunities.

 

Revenue growth: Measure the impact of digital initiatives on revenue growth, including increased sales, improved pricing strategies, and enhanced customer retention.

 

Evaluating the Return on Investment of Digital Technology

To evaluate the ROI of digital technology in finance, CFOs need to compare the costs incurred against the financial benefits achieved. This involves tracking the direct cost savings, revenue growth, and intangible benefits such as improved decision-making and enhanced stakeholder satisfaction.

ROI can be calculated by dividing the net financial benefits by the total cost of the digital initiative and expressed as a percentage. Regular evaluations should be conducted to ensure ongoing alignment with the organization's profitability goals and to identify areas for further improvement.

In conclusion, incorporating digital technology in finance is essential for CFOs to improve profitability and drive long-term success. By understanding their evolving responsibilities, developing digital literacy, and leveraging key digital technologies, CFOs can optimize financial operations, make informed decisions, and identify growth opportunities. By implementing digital tools strategically and measuring their impact, CFOs can ensure that their organizations stay competitive in the digital age.

CFOs are starting to be seen as “co-CEOs,” reliable leaders who navigate economic uncertainty and low consumer confidence, securing overall business stability. While CFOs aren’t expected to lead on all fronts of business operations, they are expected to widen their professional remit to be involved in areas traditionally covered by other business functions - such as ESG or managing investments to link disparate tech systems. 

Recent research we conducted in partnership with Deloitte, surveying 700 CFOs and senior departmental leaders globally, found that CFOs’ self-perceptions are not aligned with the rest of the business. For example, CFOs are seen as “inspiring” by others – a characteristic that many CFOs didn’t see in themselves: only 10% of CFOs consider themselves as such vs. 37% of their colleagues. So, how can CFOs look to take charge of business leadership, and exercise the potential they have, whilst carving out a unique scope within the business to tackle what may seem challenging but exciting business priorities?

Realigning self-perception and expectations

85% CFOs compared to 86% of their colleagues believe they can help solve business problems. But when it comes to human skills, there is a clear divide between how CFOs are perceived and how CFOs see themselves. CFOs tend to over-credit themselves when it comes to actively coaching others across the organisation (27% CFOs vs. 12% colleagues), but at the same time, CFOs don’t give themselves enough credit for being empathetic (18% CFOs vs. 29% colleagues) or strategic (32% CFOs vs. 45% colleagues).

The trend of undervaluing their own leadership efforts holds across a variety of business challenges. It’s especially noticeable regarding tech-related efforts like facilitating hybrid work (81% vs. 93%) and ensuring effective cybersecurity measures (82% vs. 90%), although these duties traditionally fall to CIOs. It seems that ongoing global disruption has helped businesses understand the importance of the CFO in ways they themselves have yet to realise let alone capitalise on. 

Transforming the role of the CFO

Today’s business environment requires leaders to be confident in their ability to quickly adjust plans according to ever-changing realities. CFOs are often the first in the room to dissect the impact of a particular challenge, mitigating risk and determining the best next step. With this visibility, they’re in a unique position to observe and navigate the boundaries between different departments and look forward, rather than back. But where exactly should they be moving? 

Our research found that 86% of CFOs and 81% of business colleagues agree that improved 'processes' - to make workflows more efficient, less burdensome, etc. – are important for businesses to become more agile. At the same time, 82% of CFOs vs. 86% of their business colleagues agree the challenges they’ve been facing in the past 2.5 years could have been improved with stronger communication between departments. Keeping in mind the business needs, it’s essential that CFOs, uniquely positioned to become the link to every corner of the business, implement a revamped approach to planning, making it a process that would connect all business units and enable greater transparency. 

Enabling cross-departmental digitisation through connected planning

Connected planning refers to the technology-enabled process of business planning that joins together people, data, and plans to help accelerate better business performance. Traditional planning approaches lack the collaboration, insights, and predictive, self-learning capabilities necessary to inform strategic decision-making. This process breaks down information silos to eliminate any inefficiencies in financial, corporate, and operational planning.

Connected Planning will be key to agile and influential CFO leadership as this role requires heightened strategic vision. 40% of business colleagues would like to see their CFOs provide a stronger strategic vision and 38% would like to see stronger planning & growth orientation from their CFOs. With such planning tools, all the departments will have a single source of truth to refer to, and the ability to quickly adjust plans based on performance or during unforeseen circumstances. 

This approach allows businesses can stay ahead of any future disruptions and pivot as needed, providing CFOs with the data to support the relaying of their vision, collating data from employees, analysing it, and acting based on data-driven insights 

Ensuring success of ESG initiatives

Our research also found that CFOs see ESG as a fifth item of priority on their list, whilst 85% of senior colleagues consider ESG to primarily be the CFO’s concern. ESG has undoubtedly risen on the corporate agenda, and it is now imperative that organisations look at how they can pivot the operations they already have in place, so they are more sustainable. 

Clearly, there is a real opportunity for CFOs to expand the role of managing their organisation’s ESG initiatives and embrace it as one of their core priorities. CFOs’ active involvement can help bring more visible, significant improvements in this realm. 

Championing the CFOs unique role

The business landscape will continue to evolve and there is an urgent need to be even more proactive and forward-looking. To thrive in this new dynamic, CFOs need to take ownership of new business priorities and drive them forwards. 

Be it in the delivery of agile planning or ESG initiatives, success will largely depend on whether CFOs are able to evolve with time. It can be challenging to positively pivot the role and responsibilities – but it also brings exciting new opportunities to drive organisational success and become a more strategic leader across many business functions. 

About the author: Victor Barnes is the Senior Vice President at Anaplan.

With institutional investors banding together to promote investment in sustainable companies, regulators on the verge of demanding auditable numbers from firms to prove that they are meeting their often public commitments on reducing environmental impact, and consumers increasingly intolerant of anything that smells like greenwashing, the best time to start working on your environmental, social, and governance (ESG) strategy and reporting capabilities was yesterday.

Since yesterday isn’t an option, you had better start now. The general consensus we hear among our contacts in the regulatory world and the 150 clients in our account-to-report advisory programme is that ESG reports in the foreseeable future will face the same level of scrutiny that financial reports have always received – with similarly swift and onerous consequences for weak results, obfuscations, and mischaracterisations.

Within two to five years, we expect major companies in many jurisdictions will be required to file ESG reports that include auditable numbers. European regulators are leading the way on this, but the SEC is close behind. They will likely begin with reporting requirements that are built on the Task Force on Climate-Related Financial Disclosures (TCFD) which recommends 11 disclosures across governance, strategy, risk management and metrics. The initial focus is on climate change but this will likely expand in scope to include other environmental concerns such as biodiversity, as well as wider social themes such as inclusion, diversity and equality.

Finance to the rescue

This combination of regulatory and institutional investor scrutiny is part of why the logical clearinghouse for ESG data in most companies – when they recognise the need to operationalise this – won’t be a sustainability task force or procurement office, but the same people who have always provided regulators and investors with the numbers they need: the finance function. 

One reason why there has been a degree of wait and see and perhaps some apprehension is that it is still a little bit early to consider what the operational steady state of this process will look like. ESG reporting standards are still going through consultation phases and the final interpretation of these into detailed accounting is going to take time to fully evolve. But one thing is for sure… it is definitely coming.

The messaging we are hearing is these sustainability standards will take shape faster than traditional accounting standards. The new standards are built on some pretty strong foundations, as there has been a large investment over many years by bodies like the Sustainability Accounting Standards Board (SASB), Climate Disclosure Standards Board, Global Reporting Initiative (GRI) and the GHG Protocol, so the thinking is already very well evolved and thus it is easier to have a good idea of what we are likely to see in the years ahead. 

Chief financial officers (CFOs) will need to play a role wider than just the custodian of the delivery of disclosures but also will need to help coordinate the integration of environmental concerns into the larger business strategy. This will include a reboot of enterprise risk management, strategic planning, and investment appraisal.  Perhaps, most importantly, it will be necessary to redefine the performance management processes to reset incentives to guide management behaviour toward ESG priorities. A further area requiring the attention of finance is the need to address additional accounting. As we enter a transitional phase, companies are needing to manage their carbon footprint via the purchase of energy attribute certificates and may also invest in carbon offsets, and engage in emissions trading activity. It is also likely that there will be additional taxes and regulatory reporting requirements at the country level.

Finally, it is worth underscoring that transparency, honesty and integrity are going to be incredibly important. Companies that appear to not be acting in good faith will likely see an impact on shareholder value. If a lack of rigour and diligence in the accounting is discovered, the punishment is likely to cause a severe dent in shareholder value and also have reputational impacts that will be difficult to recover from. 

The first three steps

Although most major companies at this point have made ESG-related resolutions, few have been clear about how they are going to make good on those promises. Fewer still are clear about how to report on their progress. At a minimum, you need to do three things: 

1. Implement the recommendations of the TCFD. The TCFD framework is built on four pillars - governance, strategy, climate risk management, and metrics and targets. It provides specific guidance via 11 disclosure recommendations. At a minimum, your organisation should seek to ensure that each of these is being adhered to.

2. Be aware of developments that will affect your carbon accounting. If you follow US GAAP, you should monitor what the SEC and Financial Accounting Standards Board are saying. If you observe International Financial Reporting Standards, you should look at your country’s regulatory position and the position taken by the European Union and in particular the European Financial Reporting Advisory Group’s work on the refreshed Climate Sustainability Reporting Directive. On top of that, you will also want to review the ISSB draft standards and monitor their progress through consultation phases, become familiar with the GHG Protocol corporate accounting and reporting standards, and drill into the work completed by standards bodies like the GRI and SASB. 

3. Remind your colleagues that you will need to walk the talk. If you made a public sustainability promise, such as going carbon neutral by 2030, be sure you have an actionable plan to pursue it. You will need to have a detailed road map with achievable milestones that can support those earlier promises – and, most importantly, you will have to hit those milestones.

About the author: Stephen P. Ferguson is the leader of The Hackett Group’s Account-to-Report Advisory Programme in Europe – an advisory service that includes members from 150 major companies.

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The last time inflation was this high – in the early 1980s – Margaret Thatcher had been prime minister for two years. Channel 4 had just launched, and if you were aware of inflation at all, it was probably because the Wham! cassette you wanted to buy at HMV was a pound more than you expected.

Since then, inflation has rarely exceeded 4%. Generations of British and European finance professionals have spent whole careers making forecasts – where inputs and outputs were relatively stable most of the time. But that’s over now. Today, with Sterling and Euro zones’ inflation already running above 7.5% and no cooling in sight, monetary stability seems to be something else we lost during the pandemic – and adapting to this new reality is now a concern for chief financial officers (CFOs) and finance transformation leaders. 

What should you keep in mind?

This is a crisis with your name on it

The 2020s aren’t the 1970s reloaded. For CFOs and other finance leaders, managing this round of inflationary times is likely to be even more challenging.

The reason is that today’s CFOs have a broader mandate to help shape corporate strategy, supply chain resilience, pricing and procurement, as well as maintain a keen interest in the level of staff attrition in the business. As a finance leader, you may well be positioned to understand what is happening, but have you considered how finance should partner differently with the rest of the business?

Inflation is a five-alarm fire

Inflation will affect your firm, your employees, and your shareholders – but not everybody will be attuned to the dangers, and many may be underestimating the toxic effect of stagflation (i.e., inflation without growth). Your first job will be to convince everyone that mitigating its impact is a high priority. Unless your financial modelling capabilities are ready to simulate the limit of passing on any price increase to customers and contain input price hikes, inflation may not just hurt margins for a quarter or two, it may hurt your company’s profits and prospects longer term. Whether the challenge is procurement, outsourcing, pricing or hiring, you need a finance transformation and continuous improvement strategy, and that strategy should be executed based on proven best practices.

Prices and costs are moving targets

The costs of labour, materials, transportation, energy and other expenses are all increasing, but not necessarily at the same rate. To handle inflation, you will need a deep sense of the moving parts of your cost structure – particularly if a period of stagflation ensues and the growth slowdown limits your ability to raise prices. Enterprise-wide, too, it’s important to remember that inflation affects different businesses differently. Organisations in the hospitality business may be very concerned with foreign exchange risk, while industrial manufacturing organisations will likely be worrying more about the cost of raw materials and logistics. It goes without saying, of course, that working capital management will need even more emphasis. If you need to cut costs, do it intelligently. Benchmark your costs to look for opportunities and take another look at the benefits of digital transformation, which many companies today are finding to be a highly effective way to scale capabilities while reducing expenses.

The most valuable people in your team may be revising their CVs

In a very real way, inflation is a pay cut for your staff. If you don’t make it worth their while to stay, your best employees will leave. Keep this in mind as you draw up your own hiring and retention plan. Replacing finance professionals will be expensive, particularly because for many firms, proactive inflation management will require hiring more analysts. The shortage may turn out to be quite serious: we know of one company that is expanding its planning and analysis team by 40% and doubling its indirect sourcing and procurement staff so it can handle the added workload generated by additional price and cost modelling and more frequent contract reviews.

Refocusing the services of the finance business partners becomes paramount

Unfortunately, for many finance organisations, the activities of the finance business partners supporting management decisions may still be consumed by the wrong types of activities and priorities. High-performing organisations are instead revisiting the role that finance should play to help adapt the enterprise to this new reality, focusing on important questions: What is the breaking point where price increases begin to adversely impact demand across your products, services and channels? How much inventory are you willing to carry as warehousing costs increase? What is your exposure to rising interest rate differentials? How do you balance working capital management with the need to satisfy customer demands? What is your optimum cash position to take advantage of discount opportunities? What is your supplier credit risk? Do you understand the working capital drag created by the increasing cost of capital on our overall profitability?

The increasingly strategic role that the finance function plays in high-performing companies over the last decade gives legitimacy to the evolving role of finance. For instance, we foresee an enduring role for finance professionals in educating and coaching other leaders in navigating this challenging environment. This role will be supported by the unmatched analytic insight – an understanding of how the company’s value chain fits together, including research and development, commercial operations, and other enabling functions. As challenging as the rest of the 2020s may be for the prepared finance executive, they are also likely to be years of extraordinary opportunity. 

About the author: Gilles Bonelli is an Associate Principal at The Hackett Group’s Finance, Enterprise Performance and Business Intelligence Advisory Practice in Europe. 

A vital line of defence for businesses, CFOs are charged with optimising a company’s financial performance by directing and continually adapting its budgets, goals, and objectives. 

However, their responsibilities range far beyond the scope of just managing finances. The CFO’s expertise is not just confined to numbers: they take a key seat at the strategy planning table, helping to shape overall direction by aligning business and finance strategy to drive growth. As such, today’s CFOs now require broader business and commercial knowledge and operational experience as they lead C-suite collaboration on long-term, interdependent work.  

In a rapidly evolving landscape, any discussion of today’s CFO must address:

Evolving expectations of finance professionals

Traditionally, finance leaders may have operated in silo, seeing their role as being purely about managing cost and not considering the interplay with other areas of the business. Similarly, this is likely to be how others in the business also perceived their role, creating a sense of self-fulling prophecy for those in the finance team. This has led to essential skills, such as technical expertise and talent management, being underdeveloped and underrated as CFOs are pigeonholed as financial gatekeepers. 

However, in today’s digitised, interconnected world, the CFO is expected to inhabit a more dynamic and outward-facing role. The scope and influence of their responsibilities in areas such as strategic execution and performance insight are more prominent than before, meaning they must balance their traditional duties with their new role as agents of change. To succeed in this demanding climate, the CFO should be cross-functional, motivational, and willing to lead by example.     

To support business objectives thoroughly and drive the talent agenda, finance leaders have a responsibility to understand and develop HR intelligence. Therefore, a strategic alliance between the CFO and the CHRO must be nurtured. Building a more collaborative relationship between the two can elevate both functions to a more strategic position within the company. It will also enable CFOs to look beyond costs when considering employees, taking a deeper look into how profitability can be enhanced through human capital. They should be able to estimate the impact of salary increments and bonuses on the business’s profitability, thereby assisting HR teams in shaping policy.  

Finance leaders must also be technically savvy, having at least a moderate understanding of IT. They should be able to provide guidance and advice on issues pertaining to the systems and applications in use for finance, whether that’s understanding the underlying data and its context or how systems integration can support a more relevant digital process. These technical skills provide today’s CFOs with the information and confidence to challenge what is possible, manage risks, and play a key role in strategic decision-making around IT investments. 

Consequently, to gain a more well-rounded understanding of the HR and IT aspects of their role, and to set their business up for success, today’s finance leader should be working towards bridging silos and partnering with the CHRO and CTO. 

When the sum is greater than its parts

By joining forces and being able to rely on the expertise offered by the CHRO and CTO, it is not just finance leaders that stand to benefit. Improved communication, understanding and collaboration enable issues to be avoided, and where they do occur, novel solutions to be implemented.

It is not uncommon for HR or payroll projects to be led by the CFO in isolation from HR. But without collaboration between the CFO and HR, key messages and data insights can fail to be communicated effectively. It can also lead to a primarily functional use of HR and payroll systems which is a missed opportunity to take advantage of qualitative elements of contemporary solutions.  As CFOs work towards boosting their company’s competitive advantage, they can leverage data analytics to deliver a well-rounded financial picture that guides the wider organisation. If these valuable insights fail to reach the right teams, they will not resonate in the boardroom.  

This disjointed approach can lead to wasted time and resources. Instead, what is needed is a formidable triumvirate of success. Within this robust alliance, the CFO, CTO and CHRO should be able to feed off each other to constantly reinvent the workplace. It is only through this collaboration that they will be able to redefine themselves as collective digital stewards, driving value, improving efficiency, and setting the future direction of the business.  

Collaboration is the key to future success

The last few years have seen a fundamental shift in how people and businesses get work done. This highlights how quickly circumstances can change and the need for organisations to be agile enough to keep pace. As a result, finance leaders have rapidly moved to the fore as key players in determining how businesses adapt to these changes – particularly in those places where digital, HR, and finance intersect. 

The old silos are no longer fit for purpose and will simply put companies unwilling to change at a severe disadvantage. Creating a strategic alliance between the CFO, CTO and CHRO will allow these key individuals to work together to future-proof the organisation and set it up for continued success.  

About the author: Mark Jenkins is Chief Finance Officer at MHR. 

Dirk joined the Lidl Group as Global Finance and Accounting Director in 2008 and was subsequently appointed as Board Executive for Finance, Accounting and Tax for the German operation before joining the UK Board of Directors in 2014. In his role as CFO, Dirk was responsible for the Financial and Administrative operation of Lidl in Great Britain. He’s held other retail CFO roles before and serves on the Board of Kingston University, London, as the Chairman of the Audit and Risk Committee.

Prior to joining Lidl, Dirk has worked for KPMG out of Frankfurt, Shanghai and Singapore as a Qualified Chartered Accountant for almost ten years. We caught up with him below to talk about COVID-19, big data and machine learning’s impact on the CFO function and his goals in his new role.

What has been keeping you busy over the past 12 months? How have you helped Lidl GB navigate the COVID-19 crisis?

COVID-19 played a major role last year. Keeping colleagues and customers safe whilst ensuring we could fulfil our vital role in feeding the nation came with many challenges. Optimising cash flows and raising funds from Investors and our shareholders was the basis for ensuring the business could not only afford the expensive COVID-19 measures but also continue with our ambitious expansion programme. We increased salaries and paid extra bonuses to our front-line colleagues who have risked their health and lives for our customers. We paid back more than £100 million in business rates relief to help the local communities with their funding and we financially supported our suppliers in need.

We must, however, not forget Brexit with its ongoing uncertainties about the new regulations and their application, which has tied many resources.

Despite all this, my focus was on delivering for our customers, enhancing the in-store experience at the check-out and delivering and continuously improving our app-based loyalty programme, Lidl Plus.

As we slowly begin to return to normality, what’s your advice to CFOs navigating the post-COVID-19 world? How are you preparing for this?

It is important to recognise that we will see a new normal rather than normality. COVID-19 has changed the way people consume, spend their time and how people work. How we approach it, embracing the new normal, tackling its challenges but also seizing its opportunities, will define future success more than just trying to get back to normal.

It will be important to carefully observe and efficiently engage with customers and colleagues to understand their needs and then support the board to adapt the organisation to those behavioural changes as swiftly as possible.

A full review of all our processes has helped to identify even more efficiencies. I am proud to say that my organisation is stronger and more robust than ever before.

Lidl, CFO, CFO function, COVID-19, finance director

What are some of the main lessons the pandemic has taught you?

Most organisations have not had a global pandemic on their risk register. In an ever-changing more globalised world, companies will be challenged by events they have not been able to foresee nor have their management teams been able to train for. The food retail sector was able to operate throughout the pandemic, thanks to our heroic frontline colleagues. However, many businesses would not have survived without the support of the government and the support of their communities. Organisations should take away two main lessons:

Do the right things even if nobody is watching. If your organisation is unable to prove that it contributes positively to society and conducts its business in an ethical and sustainable way, society might not be willing to support you during the next crisis. It is important to communicate with government bodies and the communities you serve and to acknowledge the important role these stakeholders play for your organisation.

Second, as one can’t prepare for everything, the way we responded to the pandemic was based on the experience and the training of our senior leadership team in crisis management. The generic response methodology has worked very well, and it is the duty of the CFO to ensure that the processes and the people are fit for a robust response to any crisis an organisation could go through. Our investment in crisis management training has paid dividends.

How will the proliferation of big data and machine learning impact the role of the CFO in the coming years?

A great CFO should be able to cut through today’s noise of data and provide relevant and timely insights for colleagues and enable them to excel at their jobs. Finance teams have always helped top management to focus on making fast and good decisions based on clear and true information. With more data than ever being available and coming from different sources, from both inside and outside the organisation, the CFO and their teams will have to work harder to remain the single source of truth and the go-to business partner.

Machine learning and big data might make it appear to be easier for the end-user to create their own reports, but it will need data experts to understand the quality and reliability of such information. The CFO will have to ensure that big data is used for the right use cases and in the best quality.

What are your key goals for the next 12 months?

Now that I’ve stepped down from the Executive Board of Lidl Great Britain and have joined the board of our international head office, taking on the global responsibility for accounting and financial reporting for the Schwarz Group, I am excited to be working alongside an international team of outstanding experts for Europe’s biggest retailer which also operates substantial food production and significant recycling activities across Europe, the US and Asia. I will continue to play my part to support the GB business, by chairing the Audit Committee of Lidl GB. This will allow me to remain closely connected to Lidl GB, an outstandingly ambitious organisation that is so close to my heart.

James von Moltke has been CFO and a member of the Management Board of Deutsche Bank since July 2017. After graduating from New College, Oxford, James worked at Credit Suisse for three years, followed by ten years at JP Morgan in both New York and Hong Kong. James then joined Morgan Stanley, where he led the Financial Technology Advisory Team. Prior to joining Deutsche Bank, James was Treasurer of Citigroup.

James serves on a number of industry bodies. He is a member of the Exchange Councils of Eurex and the Frankfurt Stock Exchange and represents Deutsche Bank on the Executive Board of the Deutsche Aktieninstitut eV (German Equity Institute). James also serves on the Steering Committee on Regulatory Capital of the Institute of International Finance. This year, as the financial industry’s transition away from LIBOR gathers pace, James was appointed Chair of the Euro Risk-Free Rates Working Group of the European Securities and Markets Authority (ESMA).

James, who was born in Heidelberg, serves on the Boards of Directors of the American Chamber of Commerce in Germany, the Atlantik-Brücke eV (Atlantic Bridge), and the Centre for Financial Studies, part of the Goethe University in Frankfurt. 

James, why did you join Deutsche Bank?

Throughout my professional career, I have been passionate about helping to lead organisations through times of change. As Treasurer of Citigroup, for example, with responsibility for capital, funding and liquidity, I was able to support a fundamental restructuring of the organisation in the aftermath of the financial crisis of 2008-9. Coming to Deutsche Bank in 2017, I met a dynamic new management team committed to tackling the challenges facing the organisation. This culminated in the radical transformation programme which we launched in July of 2019 and are currently executing.

This also gave me a chance to contribute my international experience at a leading European financial institution, the market leader in my native Germany. Deutsche Bank is Germany’s leading bank with strong European roots and a global network – the only German bank identified as a Global Systemically Important Bank (G-SIB) by the Financial Stability Board. Since its founding in 1870, Deutsche Bank has supported German industry both at home and across the globe. Acting as a trusted adviser and risk manager, Deutsche Bank has built relationships with corporate, institutional and private clients which have flourished over multiple generations. We’re building on this tradition and shaping this bank for the future – and that’s an exciting mission to be part of.

What is the background for Deutsche Bank’s transformation strategy?

In launching our transformation strategy, we set out to resolve several key challenges. We needed to improve profitability, reduce costs, instil greater discipline in capital allocation, reduce leverage, and at the same time sharpen our focus on building sustainable relationships with our most important clients. Our response to these challenges was the most fundamental restructuring of Deutsche Bank in the past two decades. We set ourselves an ambitious timeframe for execution: we aim to complete this transformation in three and a half years from our launch in mid-2019, so by the end of 2022.

And what are the objectives of the transformation?

We focused our transformation strategy on four fundamental goals:

We also set ourselves clear financial targets for 2022. These included a post-tax Return on Tangible Equity of 8%, and above 9% in our Core Bank; a cost/income ratio of 70% and maintaining a Common Equity Tier 1 (‘CET1’) capital ratio of at least 12.5% throughout the transformation process.

What are your priorities in Deutsche Bank’s core businesses?

We set ourselves clear objectives for each of the Core Bank’s four businesses:

In the middle of a global pandemic, that’s an ambitious agenda. What progress have you made so far?

The pandemic forced us to transfer around 70% of Deutsche Bank’s staff – more than 60,000 people – to working from home in a matter of days. Despite that, we’re on track with our strategic and financial objectives:

How important is sustainable finance for Deutsche Bank’s future setup?

Deutsche Bank is absolutely committed to sustainable finance, both within our own operations and in helping our clients on the path to meeting the Paris Agreement on Climate Change. We have set clear targets for financing and investment in environmental, social and governance (ESG) activities, both at the Group level and for each core business. In the eighteen months up to June 2021, our cumulative volumes of ESG financing and investment reached nearly € 100 billion – halfway to our goal of at least € 200 billion by the end of 2023. Deutsche Bank serves on the Sustainable Finance Committee of the German Government and is a founding member of the Net Zero Banking Alliance and other industry bodies. Our commitment to a more sustainable Deutsche Bank is also supported by our key stakeholders: Moody’s Investor Services, the leading rating agency which recently upgraded Deutsche Bank’s credit ratings, made clear that “DB’s sharpened focus on sustainability and attention to fast-evolving environmental, social and governance standards are credit positive.”

Deutsche Bank is absolutely committed to sustainable finance, both within our own operations and in helping our clients on the path to meeting the Paris Agreement on Climate Change.

What role has the Finance function played in Deutsche Bank’s transformation?

Finance has played and continues to play, a vital role in planning, designing, enabling and funding Deutsche Bank’s historic transformation. In several ways, we have redesigned Finance’s processes, our ways of working and our culture in order to help the bank reach its goals. Some of Finance’s key contributions were:

Neil Murphy, Global VP at ABBYY, examines the shifting role of CFOs and a new way in which they can bring effective transformation.

With the speed of digital transformation ever increasing, businesses and financial organisations are working hard to keep up. When they do, transformation often means expanding the responsibilities of those in charge – but it’s not all about the CIO, CTO, or even CEO. Nowadays, the Chief Financial Officer (CFO) is at the centre of this change. As such, the role of whole finance team will evolve, as they are placed at the strategic heart of the enterprise.

The CFO is in a unique position to bring intelligent solutions to the enterprise. Gartner predicted that by 2021, 85% of all customer interactions will be managed without a human. By introducing technology, businesses will be empowered to forecast how competitors will react, how customers will respond, and where risks will emerge. Nowhere is this level of competition more fierce than in banking and financial services (FS) – as such, the FS industry has become a battleground.

If they want to come out on top, finance teams will need to do more than just engage customers online. They need to strategise and map out their battle plan to attract and onboard new customers digitally, while creating a speedy and secure digital experience for existing ones. They need to invest in digitising their back-office systems and processes to enhance front-line interactions. Where better to gain a broad, accurate view of their organisation and processes than a ‘digital war room’?

Why a war room?

In many firms, including in banking and FS, the CFO and their team rely heavily on data that comes in from customer-facing operations, so they can link predictive analytics with customer behaviour. The sheer volume of data can be cumbersome, but with better management, financial institutions can anticipate the needs of customers, make banking easier, and pursue the right partnerships to increase capabilities and scale.

If they want to come out on top, finance teams will need to do more than just engage customers online.

Enter the digital war room. Here, CFOs can get visibility into every single process in their business as they actually behave. They can see variances, bottlenecks and delays, and put all this data to good use, mapping out how to better meet customer and business needs.

Process analytics can help to deliver insights from data that already exists within a financial organisation. With trends and customer needs constantly changing, it’s important that CFOs and banks stay ahead of the curve by capturing meaningful insights. In fact, 98% of banking and FS bosses agree that technologies (like process mining) would be helpful to their business. An example of this is delivering personalised services based on the customer profiles that banks have. They can use the data on customer preferences, buying history, demographics, and behaviour to better understand their needs.

A C-suite seat for process intelligence

Setting up your digital war room is only half the battle. The real challenge is about knowing which technologies to use in it. Whether it is account opening, loan applications, payment processing, or any of the thousands of other possible processes, the right technology is the missing link – a sure-fire way to win new customers and keep existing ones.

Attempting to automate your processes without first knowing which work well and which don’t is a losing battle – you’ll only make bad processes bad faster. This is where process intelligence comes in as a critical component of any digital war room. Right now, only 55% of banking and FS businesses we surveyed said they frequently use tech to assess business processes. This means almost half don’t have visibility of their data and can’t spot bottlenecks and blind spots in customer interactions – not to mention in their back-end processes. This might be causing more problems than the CFO realises – and could be the key to solving some age-old dilemmas.

Using the right technologies in the right setting is critical in helping finance teams nail the processes that trip them up. The war room can empower the CFO and its staff with oversight and control over the processes they work with every day. This means they can ensure that customer experience remain a priority – as this is critical for revenue generation – whilst making better business decisions than ever before.

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Digital transformation has blurred the lines between organisational change and technological. To keep up, CFOs will need not only to lead digital transformation efforts both big and small, but to quickly learn the strategic skills to create a war room – and win both the battle and the war.

There’s little doubt that companies are getting serious about climate change and sustainability. In the last 15 years, companies disclosing sustainability data to the Carbon Disclosure Project (CDP) have increased carbon reduction targets threefold, from an annual average reduction of 2% to 6% today. Moreover, timelines to achieve these goals have narrowed; rather than setting goals 25 years in the future, companies intend to meet their goals in an average of just eight years. Companies are also looking beyond their own operations to examine their entire supply chain, as made clear by recent announcements from companies like Apple, BMW, and Microsoft.

Despite this progress, few companies are on track to meet their climate goals. While many leaders embrace bold targets, they struggle when it comes time to implement because they haven’t established the capital allocation strategies and governance structures needed to match their strategic intent.

The finance department sits squarely at the heart of this challenge. With sustainability goals becoming ever more ambitious and investors demanding increasing accountability, there must be a reimagining of the traditional responsibilities and activities of the CFO and the broader finance function if companies are to overcome barriers to sustainability transformation and meet their targets.

Barriers that slow progress in sustainability transformation

The first barrier is the failure to systematically integrate environmental factors into enterprise risk management. Historically, sustainability issues were addressed within the Chief Sustainability Officer function, receiving only occasional attention from financial leadership. However, earlier this year, 3,000 global leaders convened in Davos to discuss their roles as key stakeholders in a sustainable world and, for the first time, climate change contributed to all five of the top global risks in The World Economic Forum’s Global Risk Report. But for many companies, sustainability still is not considered a core competitiveness issue, and it doesn’t receive the financial and human capital necessary to tackle a challenge of its size.

Sound decision-making relies on accurate and useful data. But companies encounter a significant barrier when their reporting systems fail to capture the data needed to inform capital allocation decisions. Yet, even with improved access to relevant data, many companies still lack the ability to properly manage environmental sustainability. Quantifying climate risks and opportunities is critical to managing exposure to energy price volatility, water scarcity risks, water and waste regulations, and environmental impacts in the supply chain.

From an organisational perspective, existing processes and metrics aren’t designed to foster engagement between sustainability and finance functions which can delay or impede the achievement of sustainability goals. For example, sustainability teams are often brought into project planning too late to influence project design and cannot make an effective case to financial decision-makers. This can lead to finance teams overlooking meaningful short- and long-term financial benefits of sustainability strategies, such as enhanced reputation and reduced climate risk. Without having shared, quantifiable success metrics, such as reduced carbon emissions, teams lack effective incentives to innovate and collaborate across departments.

Finally, for years corporations have cited a lack of available capital as the primary barrier that slows or halts implementation of critical sustainability projects. As a result, a myriad of service models, debt instruments, and new forms of capital have emerged to lessen the financial burden, share risks, shift the needs for upfront capital, and even reconsider the importance of asset ownership. While there’s a growing awareness of sustainable finance strategies like sustainability-linked loans or internal carbon pricing, knowing when and how best to implement them remains a challenge.

By identifying the barriers most acute in their respective companies, finance leaders can take action to minimise the costs and risks associated with sustainability projects and ensure their organisations successfully capture both the environmental and financial benefits at stake.

Stages of integration for aligning finance and sustainability ambition

The rise in increasingly ambitious sustainability goals clearly demonstrates that corporate leaders see value in climate action – both to address stakeholder demands and to mitigate near- and long-term risks. The finance team plays a critical role in realising this value but, to do so, they must be fully integrated into – and feel a sense of accountability for – the company’s sustainability transformation.

Earlier this year, 3,000 global leaders convened in Davos to discuss their roles as key stakeholders in a sustainable world and, for the first time, climate change contributed to all five of the top global risks in The World Economic Forum’s Global Risk Report.

Drawing on our work with global organisations, ENGIE Impact has identified three stages of evolution in this integration process: opportunistic, thematic, and holistic. Progression through these integration stages is essential for companies, both to achieve their sustainability goals on the required timeline and to unlock the full spectrum of direct and indirect benefits.

Stage 1 – Opportunistic: The leadership team of companies in the opportunistic stage often understands the high-level benefits of sustainability programs. Nevertheless, these companies have not set specific targets; rather, sustainability projects are pursued on an ad hoc basis and are typically approved if they meet basic financial thresholds, such as a quick payback.  This narrowly focused approach usually results in limited operational cost reductions and achieves only incremental emissions reductions.

Stage 2 – Thematic: In the thematic stage, a company’s CFO and finance team lead the analysis of company-wide programmes that support the organisation’s sustainability ambition. The company sets time-bound targets across its operations that follow generally accepted frameworks and methodology and has identified a portfolio of similar projects—such as energy efficiency or on-site solar generation—to meet these goals. Typical target outcomes at this stage include reduced long-term costs of energy, increased price certainty, and more efficient use of capital.

At this stage, the CFO also begins to seriously investigate sustainable finance options which allow the company to expand its bank and investor network and lays the foundation for financing a broader set of decarbonisation measures in the future.

Stage 3 – Holistic: A company with a holistic approach develops a comprehensive understanding of the importance of sustainability to the success of its organisation and positions sustainability at the core of its business. Its leadership relies on cross-functional collaboration to set and achieve ambitious corporate goals, such as science-based decarbonisation targets. The finance team takes a lead role in shaping the company’s roadmap of sustainability initiatives that deliver financial returns as well as incremental values such as accelerated decarbonisation, enhanced brand value, decreased risk, and, ultimately, improved market position.

By identifying a company’s stage of integrating sustainability into its finance function, finance departments and CFOs can track their progress to ensure that they’re keeping pace with the company’s overall sustainability objectives and taking actions that contribute to the overall transformational success of the organisation.

With corporations growing ever more ambitious in addressing climate change, CFOs and their finance teams play a central role in ensuring that their companies can meet their sustainability transformation goals. Only by integrating a sustainability mindset can the finance function properly prepare for risks that unlock the true value at stake, effectively structure investments, and adopt changes that drive meaningful progress toward sustainability goals.

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The COVID-19 pandemic has forced a major shift in working practices across the globe, putting the impetus on companies to rapidly relocate staff to home offices and switch to remote working solutions. Nathan Howe, Director of Transformation Strategy at Zscaler, examines the unusual consequences that this has had for financial services.

The movement of all employees to home offices may be the most visible impact of the virus on organisations, but behind the scenes, and at the highest levels of organisations, there’s been a distinct reallocation of responsibility. Although an overused phrase at this point, these are unprecedented times, and have called for unprecedented actions from businesses to ensure business continuity.

Although these changes have spanned the breadth of managerial and executive levels, there’s one aspect I’d like to focus on: the increased role of the finance function in cybersecurity.

Unprepared for remote working

For many businesses, when the pandemic hit, they were unprepared for this scale of remote working. Companies that had already opted not only to host data and applications in multicloud environments, but also to adapt their security and remote access infrastructure to meet the needs of a modern mobile workforce, had the least difficulty coming to grips with the new situation. These were in the minority, however, and many sectors, including financial services, felt the pinch on their historic resistance to cloud adoption.

Companies operating in this more conventional way would, at best, probably have planned for no more than one-third of their staff to work from home on a temporary basis at any one time. In this unforeseen situation however, bottlenecks quickly developed as a result of a massive increase in data traffic. This flood of data pushed the traditional hardware or licence-based infrastructure for remote access to data and applications to its limits.

For many businesses, when the pandemic hit, they were unprepared for this scale of remote working.

As these companies placed their security technology at the perimeter of their system, all of the data traffic from the remote workers’ home offices had to be diverted through the data centre before they could access applications, which created a less-than-ideal foundation for a positive home-working experience.

Although one would imagine that all these issues would land on the desk of the IT team or the CTO, the reality of the situation was that, as the scale of the issues affected business productivity and continuity across entire organisations, they became a blockade to essential cash flow for businesses, quickly becoming a matter for finance.

Functionality vs. security

What we saw across the earliest period of lockdown was a cost-effective approach to cybersecurity that was driven by the finance function. During the search to identify the factor holding companies back from high-performance remote working, blame fell on the firewalls or remote access VPNs used as perimeter-based security infrastructures, or on the devices used by employees. Sacrificing these solutions would increase productivity and shore up the bottom line but penalise the organisation’s security posture.

Essentially companies were faced with a difficult choice between ensuring normal levels of productivity or providing secure remote access—albeit with frequent drops in the connection and with hardware being switched off at the bottleneck. Due to the sheer number of different devices used in the workplace, it was not always possible for companies to insist on compliance with standardised security policies across all devices.

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I’ve seen for myself businesses making those security sacrifices. Essential security processes, such as SSL decryption, have been bypassed entirely to make remote working easier. These are quick and dirty fixes to increase connectivity and productivity, without addressing the broader issues around improving network architecture to facilitate better remote working standards. They may work in the short term, particularly given the speed in which connectivity had to be ensured at the beginning of lockdown. But in the long term, these “fixes” not only increase the risk to an individual business, but all businesses. Cybersecurity vendors use the data on threats collected from customers to improve their own solutions over time, so this function-over-security dynamic has a far broader risk element.

Switching the narrative

As many of us begin to return gradually to the office, the security posture for organisations needs to be restored. The bypassing of security in favour of business continuity was, for many organisations, a difficult but essential decision during the most tumultuous periods of lockdown. What I’d hope the finance function has learned from its time with its hands on the security wheel is that they need to invest in converting their emergency workarounds into practical approaches for the future. Employees have come to value the greater flexibility of being able to choose where they work and as yet may be unwilling to bid farewell to the option of remote working.

Emulating those businesses that, at the outset of the pandemic, had the multicloud security and remote access infrastructure already in place would be a good place to start. The new world of work requires an approach that combines connectivity, security, and performance without making dangerous sacrifices.

What brought you to Lidl?

I started my professional career as a KPMG auditor in Frankfurt and after qualifying as a German Certified Public Accountant (Wirtschaftsprüfer), I was seconded to Singapore as Head of the German Desk. After another secondment to Mainland China, I returned to the Frankfurt office to work on some of KPMG’s largest German listed clients. When a French retailer offered me the position of CFO for their German operations, I left the accounting profession for good. In 2008, Lidl was looking for a German qualified accountant with retail experience and prior exposure to Asia – there weren’t too many of us - so they reached out. We had an initial conversation and I was very impressed by my hiring managers and their humble, professional spirit, along with the business’ success of course. I was convinced that they were getting a lot of things right and that I had found an environment in which I could learn a great deal. They also offered excellent international development opportunities. So, I didn’t hesitate and joined as Group Finance and Accounting Director, later becoming Finance, Accounting and Tax Director of the German business. About six years ago the opportunity arose to join the Board in Wimbledon as CFO for Lidl GB. Great Britain is not only the second biggest Lidl market outside of Germany but also one of our fastest-growing countries, so it was a great opportunity!

What has been your biggest achievement as Lidl GB’s CFO so far?

It’s wonderful to be part of a growing business that has had a significant and positive impact on British households. Not only have we made high-quality food accessible at affordable prices, but through our significant investments into the economy, we have also been able to create jobs and new opportunities for people and communities. Since I joined the Board, Lidl GB has almost doubled in size. It has been an exciting journey helping the business grow from an SME into the company it is today.

I am also extremely proud of the team that I have developed. You can only work on industry-leading projects when you have the best in the industry working alongside you! For instance, together we have transformed the Controlling department into a modern Business Partner structure and established Business Intelligence and Analytics. We have also taken Legal in- house and set up a well-regarded Legal and Compliance team.

What’s your piece of advice for someone that’s looking to become a CFO one day? What is the one thing you wish you knew when you started?

The traditional career path usually starts with an accounting qualification, which in my opinion is still vital. Today many Board Members are very financially literate. It is therefore important that the CFO clearly stands out as the finance expert in the room. Beyond this, today’s CFO also needs commercial experience and technological understanding. Widening your experience outside of an accounting firm gives a unique opportunity to develop even stronger communication and leadership skills and to broaden your strategic perspective. So, don’t be afraid to leave your comfort zone.

CFOs need to be able to build and develop world-class teams that combine in-depth specialist knowledge with a strong understanding of the respective business. They should be able to communicate effectively with a variety of stakeholders on both detailed and abstract levels. But most importantly they need to be able to look beyond the risks, identify revenue opportunities and drive the agenda around innovation.

If I had to give only one piece of advice, however, it would be to find a good mentor.

In today’s environment, CFOs tend to go beyond the spreadsheets and are a partner in the business. How do you manage your responsibilities effectively?

Company Directors are faced with an ever-increasing amount of data from multiple sources. It is the role of the CFO to cut through the noise and present relevant and timely information to enable top management to make the best decisions. Only by becoming the organisations’ data champions will CFOs gain the trust of management as the single source of truth. The key to achieving this is to have a world-class team behind you. This includes having Finance and Business Intelligence teams that are technologically savvy and can support their finance business partners who are fully immersed in the business’ daily operations.

It’s important to remember that success doesn’t start with the CFO - it starts with getting the right team working together. I’m incredibly fortunate to say I have a brilliant team made up of almost 300 strong individuals integrated across the business, without whom I could not do my job.

What’s leadership to you?

At Lidl, we are one team with one vision, and we understand that our success is down to every single one of our 25,000 colleagues. From our store colleagues to our Board of Directors, we are all working in the same direction and it is inspiring to be a part of this.

I have had the privilege to lead people in different parts of the world, in both corporate and military environments.

I believe that leadership can’t be universal and should be flexible, targeted and individualised to be effective. It should not be about position or title, but rather action and example. As a leader, you are measured on the strength of your team and their development. It is vital that a leader displays a clear and concise vision whilst upholding integrity, and genuinely being interested in developing each individual member of the team. Leadership is about communicating - well and a lot.

So, what can we expect to see next from Lidl?

Since joining Lidl GB in 2014, the business has not stopped growing. This pace of growth shows no signs of slowing and the scale of our ambition has only increased.

We are continuing to open a new store almost every week and recently committed to an expansion investment of £1.3bn across 2021 and 2022. Despite times of economic uncertainty, we are continuing to push forward to help ensure that as many communities as possible have access to a Lidl store, whilst continuing to create more jobs along the way.

In addition to opening new stores and warehouses, we are also due to move into our brand new Head Office next year, located near Kingston. We’ve outgrown our existing office and currently occupy multiple spaces around Wimbledon, so the move will help to bring all our Head Office teams together, enabling us to work as effectively as possible to support the rest of the business.

We have several innovation projects on the go which are of course still confidential, but that are constantly driving the business forward. We continue to encourage ideas and innovation from right across the company, with reward mechanisms in place for new projects that end up being implemented through our Idea Management Programme.

Anyone wanting to join our team should keep a close eye on our careers site for new opportunities.

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