Chief Value Officer - The New Version of a Chief Financial Officer.

CFO to CVO: Building Organizational Value?

Should CFOs begin rebranding themselves as CVOs? With new technologies, like AI and machine learning, disrupting everyday business practices, corporations are forced to adapt and overcome a changing environment.

As general business processes and standards adjust, the CFO position must also conform to today’s demands. That’s why we are seeing a shift from traditional CFO roles to CVO duties. In this article, we will cover the basics of CVOs, their importance, and how you can implement this role into your business.

What is a CVO?

A Chief Value Officer, known as a CVO, focuses on value creation rather than the financial success of the business. Traditionally, CFOs analyze how well the organization is meeting financial and operational objectives by looking at the standard financial packages or analyzing the bookkeeping system.

In reality, the success of your organization stems outside of the financial realm. How strong is your brand loyalty? Are employees challenged and comfortable in the work environment? Does your company take on diversity initiatives? These areas are hard to measure with financial numbers but are essential to the long-term success and future-proofing of your business.

What is Value?

Value can be a broad term, especially when analyzing value surrounding CVOs. Value and financial growth are positively correlated. For example, if staff well-being is improved, how will that impact your productivity and profitability? Added value in a non-financial way can trickle down into your physical financial statements.

Value can be found in other areas, such as innovation, digitization, environmental capital, and intellectual capital. How can your organization add value through sustainability initiatives? Maybe you implement a rigid recycling process, which in turn increases your brand image and sales.

Staff attraction and retention has become a bigger issue for organizations and consideration needs to be given to further value creation from your diverse, innovative and intelligent workforce.

How CFOs Can Generate, Deliver, and Maintain Value

CFOs should already be experts on the financial side of your business, but it’s important to foster the non-financial side as well through value creation. When it comes time to make strategic decisions on products, risks, markets, and opportunities, be sure that value is considered. ESG has become a huge area for many businesses that can gain competitive advantage and the CFO, is right in the middle of this value creation. How will your decision impact the value of your organization to customers and employees?

Going into the next few years, CFOs will need to understand the delicate balance between short-term value creation and long-term organizational impacts. Running a campaign toward a niche market might gain attract customers in the short term, but how will that affect other customers that don’t conform to the niche group? Generating, delivering, and maintaining the right value is a key role as a CFO.

Bottom Line: Should You Rebrand?

Many CFOs already take on the roles of CVOs, but that doesn’t always warrant a title change. Integrating a clear emphasis on value creation in the CFO job description would minimize any doubt about the responsibilities.

Is rebranding just a waste of time or could it be a beacon of light, showcasing the additional areas that a CFO and team are heavily involved in ?

CFOs shouldn’t focus solely on value. After all, their primary strength is their financial expertise. Instead of trying to convert CFOs to CVOs, your organization should support value creation initiatives as key drivers of business growth.

Do you think CFOs should transition to CVOs??