Chief Future Officer Briefing
October 25, 2022
The CFO role continues to evolve as conditions demand hyper responsiveness to changes in the business environment and overall economy. These shifts also present opportunities to respond to new demands in revolutionary ways, while risk mitigation becomes a priority.
We examined how companies and financial leaders adapt to economic volatility and technological innovation, from coping with inflation concerns to emerging technology investment opportunities.
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- Ann Dennison, Chief Financial Officer, Nasdaq
- Chryssa C. Halley, Executive Vice President & Chief Financial Officer, Fannie Mae
- Barbara Larson, Chief Financial Officer, Workday
- Scott Roe, Chief Financial Officer & Chief Operations Officer, Tapestry
- Katie Rooney, Chief Financial Officer, Alight Solutions
- Michael Schrage, Research Fellow, MIT Sloan Initiative on the Digital Economy
- Saurabh Tripathi, Executive Vice President & Chief Financial Officer, Highmark Health
- Sonali Basak, Financial Correspondent, Bloomberg TV
- Romaine Bostick, Anchor, Bloomberg TV
- Scarlet Fu, Anchor & Reporter, Bloomberg Quicktake
- Carol Massar, Anchor, Bloomberg Businessweek TV and Radio
Managing through Uncertainty: The Agile Mindset for Finance
Chryssa C. Halley, Executive Vice President & Chief Financial Officer, Fannie Mae said having a strategy team positioned under the CFO is becoming more common, evolving over the last five to 10 years.” You really do have a birdseye view of the whole company. Our old CFO used to call the finance organization the liver, because everything has to run through.” On macro change and the broader message needed from a CFO, most are focused on growth, but Fannie Mae is also seeking to be as efficient as possible and prepares for various, potential scenarios.
“It’s incredibly important to have that mindset that’s broader than financials,” said Barbara Larson, Chief Financial Officer, Workday, which always uses data to make decisions, including for portfolio planning and future investments. “We rely on an internally created intelligent data foundation to pull data from operational systems, automate our accounting, and at the same time leverage that data to do reporting, analytics and to inform our planning models, too.” A healthy balance sheet right now stems from raising debt in March, which turned out to be great timing.
Implementing a Finance-Driven ESG Strategy
Ann Dennison, Chief Financial Officer, Nasdaq defined how her finance department owns ESG strategies. “We are a very collaborative environment. There are so many people across the organization involved in making it successful, but at the end of the day, if there’s a mistake, it’s my mistake. Finance has to make sure it’s right.” Asked about statutory requirements, she said they’re pending in the U.S., and that Europe is much further ahead, with a framework in each country and an EU framework, as well, “that makes it consistent.”
The non-profit does not have an ESG initiative, according Saurabh Tripathi, Executive Vice President & Chief Financial Officer, Highmark Health, explaining that social determinants of health has always been the core of their mission to provide healthcare to those without access. He spoke to how much costs around their initiatives have risen in the two years, including spending almost $1.4 billion for clinics that vaccinated more than 400,000 people against COVID-19. In the U.S., healthcare costs now total $4-5 trillion, growing much faster compared to an economy of about $20 trillion. “So, you can do the math. It is unsustainable.”
Beyond ERP: Rethinking Finance Systems in the New Corporate Lifecycle
During the pandemic and transition, there was more emphasis on the “P” in KPI, said Michael Schrage, Research Fellow, MIT Sloan Initiative on the Digital Economy, who conducted a Google-sponsored study of 3,200 executives before the pandemic, and compared it to now. “The problem was, and I thought it was a fairly significant problem, was that it was reactive. It was about how do we adjust to these constraints.” He spoke to needing new data and a new genre of KPIs. “I think one of the most important things that the pandemic imposed upon people was a recognition that pre-pandemic metrics aren’t good enough for the future.”
He posed questions around return on data assets, identifying the most valuable data sets, and the mistakes many organizations make, such as not considering data an asset and putting their IT departments in charge of it.
The Finance Talent Model of the Future
On talent in this environment, Scott Roe, Chief Financial Officer & Chief Operations Officer, Tapestry uses a “character lens,” looking for team players. “To me, that’s the go, no go.” He’s learned to bring a more diverse group into the hiring process. “It absolutely makes a difference.” During the early days of the pandemic, when so much was uncertain, “Everyone looked to us, to say basically, ‘Are you okay?’. And so, we took a different role.” He went on to describe the treadmill companies have been on since.
Katie Rooney, Chief Financial Officer, Alight Solutions said it’s critical for candidates to have had a lot of varied experiences, and who bring both strategic and financial perspectives. She advised hiring someone whose experience compliments an organization’s current status. “You’ve got to complement yourself with their skill sets.” On CFO department strategies keeping companies going during the pandemic, she said it is broader than the pandemic, with pent-up demand and so many companies going public. “There’s a different skill set through those different progressions.”
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