In Conversation with Pankaj Vasani Group CFO South Asia Publicis Groupe
1. From your personal experience, how do you think the role of CFOs has transformed and evolved in the past few years?
PV: Traditionally, accountants played a perimetric role viz. by supporting the process with reporting and budgeting, producing a profit-and-loss and a balance sheet at the month-end, cutting cost to increase the bottom-line, and were slipped up on as key members of the decision- making and strategy team. Evidently, the role of a CFO has now changed exponentially. Today, it is no longer limited to just book keeping, number crunching, producing management reports and ensuring compliances. The role goes beyond BAU role to become a value-adding provider of intelligence that the board and operations can depend on to make strategic business decisions – through extensive use of data analytics and highly optimised finance processes. The CFO today is an equal partner to business, having a seat at the strategy table/in the board, negotiating the minefield and partnering with the operations in finding ways to increase top-line to eventually increase bottom-line without necessarily reducing costs.
With the change in expectations, CFOs needs to transform the tangent of their team’s action plan in order to brave the demands and capitalize on the opportunities of the change. A CFO can’t just sit there and look at the profitability of the business without an intelligent overlay and strong business engagement. Numbers are a much smaller part of the role now. It’s about getting your point across, negotiating, knowing what’s important – all those commercial decisions. For this, knowledge of business drivers, growth strategy, understanding of the sector/competition, levers to pull, people management skills, analytical skills, ability to foresee headwinds and the ability to manage and adapt to them are all extremely critical requirements. The number of hats a CFO wears is multifarious.
Business decisions ofttimes swivel on what finance thinks is viable. CFOs need to be cognizant of this when getting into situations and deals, and therefore, should not be an overtly defensive gatekeeper. Newer and newer opportunities are emerging in the garb of challenges. CFOs need to ensure that the decisions made across the organisation are based on sound judgment, that would lead to the development of a coherent corporate strategic plan, including aligned business and functional plans. S/he also needs to be a role model for change – drive and lead it, challenge the status quo, stretch self & the team to go above and beyond to explore new ideas that create shareholder’s value. As such, the profession needs to respond to this shift and push in the agenda of innovation, technology and performance.
I believe most CFOs have already reached the next level, in that they are commonly accepted and poised to lead the company’s strategy.
2. Please give us a little prelude to what you are going to talk about at the conference.
PV: I’d be talking about The CFO Today – defining success & leadership. A few thoughts at this PoT:
- Stay delivery-focused. At the same time, try to build a culture which is more operational than corporate. It should be all about performance and delivery, devoid of much politics.
- How to strike a balance between being hands-on and focusing on strategic orientation.
- Change horses for the right reasons.
- There is no situation that cannot be resolved by tackling others in a determined, constructive effort.
- Speak operations – a lot of accountants are experts with debits and credits, but when you’re dealing with business folks, your language shouldn’t be Hebrew to them.
- Don’t let the problem slide, because it would only get worse. Management wants to know when the dog’s not well – not when it’s dead!
- Absolutely key for a CFO is to have a great team – it’s an immensely busy role, so you need great people around you. And give them power and accountability. Step in every now and then to check.
- Most good things are harder than they might appear at the outset – there will always be hard yards ahead.
- The Board want doctors, not reporters. CFOs must be capable of providing a prognosis of what might actually happen. But you won’t be a good doctor if you gave diagnosis before the examination.
- If you’re bored, it’s probably because you’re not challenging yourself to tackle those problems right under your nose.
- Embrace technology. It takes an iterative, always-on approach to analysing and adjusting the technology investments.
- There is a big difference between being a manager versus a leader. To lead people, you’ve got to take time to understand them, engage with them, help them. That doesn’t come just by adding up the numbers.
- Leadership nous can be exercised from any level or position in an organisation, and does not necessarily involve the need for a position of power within that organisation.
- Strategic and engaging leadership is imperative – to think outside the box and get things done – that supports the business as it scales up for growth
- You need to recognise your values as a leader and be consistently honest to those values. Personal integrity, and people knowing they can rely on you, is critical. Integrity and professional ethics go a long way; so does a sense of humility.
- Treat people well, reward and recognise good performance, and the business culture will be positive.
- You’re influencing people in everything that you do, so think about being consistent and reliable. Early on in your career, when you’re not making big decisions, people come to you because they want something done. You can establish your brand by being reliable in your output.
- Be approachable. You don’t want to become like the emperor with no clothes – people shouldn’t tell you the good news or what they think you want to hear.
- You have got to love the chair you are in. Life is not to do what you like, but to like what you do. Don’t only drawn the short straw.
- Be a role model for change – driving and leading it, stepping out into an unknown space – as a team with confidence, challenging the status quo, stretching self & the team to go above and beyond to explore new ideas that create shareholder’s value. It provides clear direction, helps build organisational alignment and guides your team to focus on the sustainable achievement of goals.
- While it may seem paradoxical, it’s not hard to be a nice person to work with, or a good colleague. Some of CFO functions are compliance-driven, but a certain amount of flexibility is needed in other areas.
- Part of the challenge in working out what kind of leader you want to be is formulating your own authentic style.
3. What are the technologies that are being sought by most industry leaders/ CFOs?
PV: Tech has become a major part of many company’s business models, strategic plans and efforts to drive efficiencies and that puts it in the CFO’s wheelhouse as well. Depending on where a company is in its life cycle, understanding where technology is best clouted (and where it isn’t) is paramount for today’s corporate leadership and an intelligent finance organization. Sooner or later; technology underpins everything and is where significant opportunities (or threats) and investments will occur. If an enterprise takes a ‘wait-and-watch’ approach, it may run the risk of being put at a deadpan competitive disadvantage.
From a CFO perspective, it is important to have technology fluency as a new strand in their DNA and gain a better understanding of the role that tech will play in the future. CFO must behold his/her mark as a catalyst, responsible for galvanising technological transformation across their company and must enthusiastically ransack opportunities to get their hands dirty in driving technology transformation and/or IT projects. Not just being sensitive to what these technologies can do but also strategic investment decision related to technology. It requires CFOs to be supremely harmonized to the digital landscape, and being able to leverage that understanding to pilot efforts to revamp the business, recuperate productivity and run the strategy.
Spearheading a technology initiative like implementing a new ERP system, is seemingly not enough in itself. The CFO needs to pioneer, undeterred by competitive disruption with technologies like AI, robotics, machine learning and blockchain. In the modern corporate setting, the CIO cannot be the only member of the C-suite well-versed in IT. Many Organisations expect the CFO to lead when it comes to strategic technology decisions and be a perfect consort with the CIO.
Our CFO profession must adapt to the impact of technology over the coming years, otherwise we will be replaced. Not just the CFOs, but the entire finance team. It’s no longer a nice-to-have trait, but a must-have skill.
4. What are your views about the new age millennial CFOs? Are they different in their attitude and approach towards the roles and responsibilities of a CFO?
PV: As with most things in life, generalisation is not feasible and at times, not fair. But most of the new age millennial CFOs who I have come across are very clear in their vision, think through what they are trying to achieve, and then engage people and take them on the journey. They like questioning the status quo, really asking what’s going on and having a greater understanding of what’s driving things. They know how to connect the story to the numbers. Being ahead of disruptive curve gets them fired up. They know that the work of a CFO is a marathon. And a good marathon is a series of sprints. They manage these series of sprints with recuperative breaks along the way. Their time management and ability to multi-task is also phenomenal. Having time to get everything done means managing time and resources effectively. Also, they are very clear that they need to take charge of their own career. They can have mentors, but they believe they are ultimately the one personally responsible.
5. How do you think digitization and automation of processes is reducing the workload and improving efficiency?
PV: Advances in new technologies like in-memory computing, analytics, mobility, the cloud, artificial intelligence, blockchain and robotic process automation offer CFOs an exciting opportunity to re-conceptualise what the future finance function can and would look like. More and more CFOs are now leaning towards robotics and other automation technologies within finance to speed up financial reporting and upgrade efficiencies.
Transformation of billing models, time management system, travel expense, capturing billable time, procurement moving to the cloud, e-sourcing, source-to-pay suite, AI programmes handling an Organisation’s accounting consolidation, arbitrage and legal compliance requirements, blockchain applications that underpin the growth of self-driving finance etc. – the advancements and possibilities are limitless. These adoptions and changes can substantially diminish process cost, while successfully redeploying talent to value-added activities.
However, to savour new technologies’ potential to circumvent risks, emancipate costs, and surge vision, CFOs must question conjectures, haul reckoned risks and embolden research. Concurrently, they must also administer the risks innate in each technological innovation.