2024 -Should these be the top 8 priorities for a Chief Financial Officer (CFO)?

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It is another year…while some of us are still introspecting about 2023 and taking count of the learnings and the unfinished agenda… some of us have started to look ahead thinking about ‘’resolutions’’ for a new beginning.

I take this opportunity to wish each of you a very successful and peaceful 2024.

Most would agree that the world is very different in the post-COVID era.? While global economic uncertainty continues, growth is still sluggish in many parts of the world, inflationary conditions continue, and climate worry intensified renewing further focus on sustainability…. optimism for a brighter future is probably on the rise. At the same time, the ways of working are changing every day led by a purpose-driven workforce and aided by the invention of new technology/ tools/ apps.

In simple words, the change that we witness around us is even more rapid than in the past.

Last two weeks I have been pondering upon what should be the priority for a Chief Financial Officer ( CFO)… “Should 2024 be a year of focused approach and consolidation?”

Here are the top 8 priorities( not in any order), ?I think, should be for a CFO in 2024. This article is based on my learnings and has no relevance to any views of my current employer or past employers. The situation of every organization/individual is certainly different, thus evaluate carefully before adopting these recommendations.

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?1.?????? Drive business transformation & digitalization

As mentioned, the economic conditions are still challenging in many parts of the world, the inflationary continues, and the growth is sluggish.? Many organizations are trying to ‘transform’ which is a must, but in reality, more than 65 % of the transformation programs are failing. Interestingly they fail not due to a lack of tools or technology …they fail due to a lack of leadership, proper planning, structured program governance, and sponsorship for the top management. The time has come when a CFO should own the business transformation and drive it. Technology will be a great enabler, and digitalization will remain key.

?2.?????? Free up the cash flow

Borrowing costs probably will continue to remain high even in 2024. As a CFO, one should keep the focus on reducing the cost of debt by freeing up the cash flow. The focus on working capital should be reiterated. Every investment needs a careful evaluation and to be decided based on the return. Needless to say, it is important to go beyond P & L and focus on the Balance sheet too.

3.?????? Drive transparency through a data-driven culture

Even today, many organizations struggle to get the right data and the story behind those data to make business decisions. Some still lack the desired transparency and a data-driven culture. A CFO is best placed to lead this change and establish a culture that believes in 'one version of the truth'. The debate about data Availability and data accuracy needs to be put to rest by a CFO to ensure meetings are more meaningful and led by data and not by emotions or beliefs.

?4.?????? Revisit existing KPIs and move towards productivity-based KPIs

Despite changes in the ways of working, many organizations still use KPIs from the past. KPIs need to be dynamic, outcome-driven, and relevant to the current business / economic conditions reflecting the current realities, challenges, and opportunities. In my view, 2024, should be the year when a CFO can truly lead this change and establish the relevant KPIs based on current business needs.

?5.?????? Eliminate waste to drive down costs, move towards variability from fixed costs

In any organization, there will be waste. No one probably understands that ‘waste ‘better than a CFO. With uncertainty still around us, we need a structured approach to eliminate ‘waste’ and move towards variability. Changes in the cost structure is a sensitive topic and need to be handled carefully without creating negativity. It needs a structured program, and change management effort, and a CFO is in the right spot to drive that change which will help generate higher profitability, and higher liquidity to make the business agile.

6.?????? Have a closer look at risk management, regulatory framework & ESG

While risk management is always among the top priorities of any CFO, it is time to have a relook at the control frameworks considering renewed risk around cyber security, and data privacy.? ESG and the governance around new regulations are real and most organizations will be part of the movement. As a CFO, 2024 should be a year to put together actions and help the organization move to the next step.

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7.?????? Move towards a process-driven organization

Process-driven organizations are the key to the future. With data and information widely available, we need clear simple processes to take the organization to the next level. Process-driven leadership will call for leaders who can simplify complex issues through defined processes and ensure that our teams make our organizations process-led rather than individual-led. And there is no better person than a CFO to lead this change.

8.?????? Treat talents differently, lead from the heart

The need for a focus on mental health is real. The way we need to treat our talents is changing rapidly. A CFO needs to put a person before a task; show visible care towards him/her, and demonstrate that the relationships are beyond ‘finance & accounting transactions ‘and ‘beyond the call of regular duty’. A CFO needs to lead from the heart, coach, and mentor the talents.

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What did I miss? Please add your comments, which can help many across globally. I look forward to your valued participation.