Many PE houses are focused on digitisation as a transformational value creator within their portco companies. But, in some cases, there may be an unknowing stumbling block to this digital transformation – the CFO.
Value creation will stall, and fail to reach its potential, if a CFO is failing to embrace technology, or lacks the skillset to apply it successfully. Here are six of the signs it may be time to replace your CFO.
- They’re still doing reporting the old way
Many companies now harness technology to reduce the burden of previously time-consuming, manual reporting tasks. If the CFO hasn’t adopted such a solution, it says little for their tech-savvy and strategic focus. - They’re not embracing technology’s possibilities
Today’s CFO should be embracing a combination of ERP, CRM and/or BI technology – which can transform the way finance collects, analyses, manages and presents data. If the CFO is reluctant to invest (or failing to utilize technologies effectively), then this a big warning sign. - They’re better at looking backwards than forwards
The traditional CFO is often good at relating patterns noticed in past performance to what’s happening today. But, in the PE world, fast growth and change are the focus. CFOs need the ability to make forward-looking assessments, which will improve decision-making and strategy for digital transformation. - They’re failing to grow the right talent
You need your CFO to grow then people around them and bring the right new talent on board. If they’re not nurturing and developing their team that is a bad sign anyway – if they are failing to enhance the team’s digital capabilities, transformation will be far harder. - They’re reluctant to accept your support
There’s clearly an issue if you’re being rebuffed when offering support on digital skills, strategy and/or investment. - They’re not great change managers
In most firms. The days of the old fashioned bean counter are long gone. But many CFOS still have a narrow skillset (often reflecting an accountancy background). Change management is one talent that is regularly lacking – yet it is fundamentally important to transformation and value creation. If you want things to change, the CFO may have to change.