Today’s CFOs don’t just balance and close the books; they’re the architects of financial innovation.
That’s because, no longer confined to number-crunching and financial operations, finance chiefs are increasingly expected to be — and turned to as — strategic visionaries, inspirational leaders, and objective decision-makers, drawing real-time insights from today’s most cutting-edge digital solutions.
But despite the finance department’s internal evolutions, some things have remained — and will continue to remain — the same: the importance of concrete fundamentals, also known as controlling what is controllable.
“There’s a certain aspect of being a CFO that must remain consistent through all those cyclical ups and downs and froth-filled markets, and that is that cash is king,” Richard Rubino, CFO at VillageMD, told PYMNTS during a conversation for the executive series “A Day in the Life of a CFO.”
“And cash is best deployed, regardless of the cycle, in those investment areas where you will yield the highest return on invested capital. Where are you going to put money today that will yield value two, or three, or four and five years from now? It is a long-term measure, but that’s how you create long-term value,” Rubino said.
That’s why the ability to leverage organization-level strategic and collaborative thinking is another immutable element of CFO leadership.
“Part of being a leader is recognizing that you don’t have all the answers. The most successful CFOs are those that think broadly and can open up the aperture beyond the financials…You can fail as a CFO if you keep that very narrow view where you’re drawing a line in the sand and you’re insisting on things being your way. You will succeed by listening to others and understanding the broader business implications,” Rubino said.
After all, collaborating with other members of the executive team and engaging in cross-functional discussions is key to creating value for any business.
Adapting, Anticipating, Embracing Change
As technology continues to advance, CFOs must not only remain open to adopting digital solutions and automated tools, but often must spearhead investments in competitively differentiating solutions.
Rubino explained that when he worked at IBM in the early days of his career, “we owned everything and we developed everything” internally.
Now, he said, “it’s important to analyze what makes you unique and differentiated at a company level, and what you are doing that can be outsourced or aided by technology … if there is something that can be aided by technology, it’s important to go through the decision making process of ‘do I want to build this internally? Do I want to code it and wait two or three years?’ Which, in my personal view, means that you’ll always be behind.”
“There are all these extraordinarily differentiated and talented vendors that you can plug and play into your organization to make you quicker to market, to make you the best at what you do while still maintaining your differentiation that you’ve held onto as the core of your operation,” he added.
PYMNTS has long been tracking how today’s CFOs sit at the center of effective process modernization, bringing traditionally manual and time-intensive workflows across accounting, financial reporting and treasury management into the 21st century by integrating innovative digital solutions into their departmental arsenals.
Swimming in the Deep End
The evolving role of the CFO requires them to anticipate the future, remain objective, truthful, and fact-based in their decision-making, all while avoiding emotional reactions to market trends.
And as the pace of digital innovation continues to accelerate, each of these elements are being put to the test.
While CFOs “can’t just dive into the AI (artificial intelligence) pool,” Rubino noted that bleeding-edge technologies that may not be perfected still do have valuable applications.
“When it comes to running long-term simulations where you want to pursue one strategy versus another, going through models that may be off by 20% can still provide a high-level feel of what might work,” he said, emphasizing that because the CFO role “requires a high level of accuracy,” AI tools should be viewed through a careful, cautionary lens.
“AI needs to be understood and respected…don’t run away from the technology, but understand that — particularly for public companies — it is important to provide and work with the right level of accurate information,” Rubino added. “There’s always a certain amount of risk. Our job as CFO is to minimize the risk. Our job is not to decimate the risk, because then we will do nothing.”
As for what the VillageMD leader sees the future holding for tomorrow’s CFOs?
“To be a successful finance leader in the future, you have to look out three or five years. If you don’t have a strategic plan for your business, priority one is to make one. It is not a spreadsheet, it’s not a PowerPoint deck, it is a story that anticipates where the puck is going — because you want to be the first one there. You don’t want to be two or three years behind,” Rubino said.
“I think it’s important for the CFO, especially of a very large organization, to be inspirational and create hope. Some CFOs are very numerically oriented, but the other side of the brain must be utilized as well,” he added.
