The economic downturn has forced most of us to have a new look at the bottom line and, in many cases, this seems to have brought the CFO to a more front and center role in managing the business.
Particularly in Japan, the CFO function was once seen as a specialized area meant to track the numbers and write the necessary reports. However, with the pressures of the past eighteen months, the CFO is now clearly playing a leading role in providing direction for the business overall.
At a recent CFO roundtable in Japan, we talked about what the economic downturn meant for local CFOs and finance departments. Most agreed that the financial crisis was a result of a lack of checks and balances in the financial system--a subject near and dear to the heart of any CFO.
Their function has expanded as a result, so they are not only balancing the books and meeting regulatory obligations, but also proposing more efficient ways of doing things and generally managing in a way that was not previously the norm.
Based on our discussions, CFOs have developed new ways of getting to the nitty gritty of accounts to achieve more consistent and streamlined reporting. Now, the focus seems to be on analyzing the data rather than rushing reports out to meet a deadline.
By all accounts, the crisis has also allowed CFOs to educate people on the importance of cost control and balance sheet management. They have had to identify areas to cut across the organization–-newspapers/magazines, coffee, color copying-–and this has meant that the focus on efficiency now effects everyone and everyone has a role to play.
There is much to be learned from the stresses placed on business in a bad economy. The changes of the past eighteenth months have been turbulent and it is the CFO--in focusing on checks and balances, regulatory obligations and day to day cash flow--that has kept many of us above water.
The crisis has seemingly presented CFOs with the opportunity to build a platform for future growth by refreshing their operational focus and having another look at processes and systems. No doubt, the expanded role of the CFO within the management team is a trend that will be around for some time to come.
David Price is Japan's Managing Director for specialized recruitment firm Robert Half International
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