The CFO is ultimately responsible for a range of activities that (whether or not they are part of the Finance function) are essential to the management of the enterprise. Depending on the organization's size, the CFO may be responsible for more departments than expected from CFOs of larger companies, where these responsibilities are transferred to another executive. Even in larger companies with chief executives to manage the below areas, all company management, especially the CFO, greatly benefit from coordination and strategic alignment.
Cross-functional engagement refers to collaboration and communication between different departments or teams. It involves breaking down silos and encouraging employees to work together to achieve common goals.
Cross-functional engagement will bring:
In addition to getting their team involved with other departments, the CFO may be personally responsible for oversight of other departments depending on the size and structure of the organization. These departments will be closely knit with the finance function in companies like this. Below are some responsibilities the CFO may absorb in certain companies.
Managing the numbers and people within a company can have many strategic benefits, as the CFO will have a great perspective on best-coordinating talent to maximize growth and profitability. It is an opportunity for the CFO to ensure that the enterprise is well-structured across departments and that teams communicate and operate efficiently. Many times, companies will dramatically underestimate the cost of turnover. HR strategy should focus on company culture, leadership development initiatives, proper incentives, and other plans to increase employee satisfaction.
Here is a list of responsibilities CFOs will have to manage within HR:
The CFO may find themselves managing legal in companies with no General Counsel. A given function within a company will vary in complexity based on the industry, size, and other factors; this is especially true regarding a company's legal function. As part of risk management, the CFO will need to ensure compliance across the business, including the standardization of contracts and other processes that expose potential liability for the company.
Properly maintaining an effective legal filing system can be crucial to managing risk and reducing time spent on legal. Here is a list of responsibilities inherent in managing legal:
When the CFO is handed additional responsibilities, they are usually pulled in the direction of something like a Chief Administrative Officer, focusing on non-operational departmental tasks like insurance, HR, and legal. However, in smaller companies without a COO, CFOs may be pulled into a more operational focus, supporting the CEO. In many ways, the CEO can be viewed as the head of external operations, while the CFO will design all internal efforts in coordination with the CEO's goals. Because of the CFO's close relationship with the business's financial health, they are well-informed to advise on operational goals for performance and growth.
The CFO, in this case, may also manage certain relationships with partners and vendors. A CFO may:
By building personal relationships with department heads and employees, you can establish trust, open lines of communication, and create a sense of teamwork. You, as the CFO, must develop these relationships to best facilitate involvement from your team with others in the organization. Here are some ways to develop relationships with other departments for yourself and your team:
Getting people to work together does not come without challenges, especially when they are not accustomed to working together. Understand potential resistance areas to ensure healthy relationships throughout the company.
Resistance to change is a common phenomenon that organizations face when trying to implement new strategies, processes, or systems. Employees often resist change due to fear of the unknown, perceived loss of control, lack of trust in leadership, and uncertainty about their future role in the organization.
If a part of your organization is used to working alone, they may see the push for collaboration disrupting their efforts. They may also see a threat behind working with others out of fear of being recognized as ineffective or expendable.
To quell any resistance to change, take the time to communicate the goals of the collaborative effort. Ensure that everyone knows they play an essential role in the project.
Departments siloed from the rest of the organization have developed a specific way of doing things. Disrupting that effort with support from others or distracting them with other projects can create challenges for your organization, even where employees are eager for the change.
Successful cross-functional initiatives require planning. Take the time to develop a strategy around how teams will collaborate instead of simply laying an objective on the table and walking away.
Departments may have competing demands and may not have sufficient resources in talent and funds to allocate to the project.
To overcome this challenge, organizations must ensure that cross-functional initiatives align with overall strategic goals and allocate resources accordingly. Departments should collaborate on resource allocation and identify ways to leverage each other's strengths and expertise to achieve common goals.
CFOs play a vital role in inspiring collaboration throughout the organization. It is up to leaders like the CFO to lead by example and go out of their way to find opportunities for cross-functional engagement with others in the organization. Working with others can create new opportunities to leverage technology and data in ways where it may have been previously underutilized.
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