What Can Overcoming Complex Challenges at Work Teach CFOs and Finance Leaders? That was the question at the heart of our recent CFO Leadership LIVE panel discussion in Dallas, where host Megan Weis was joined by Timo Nentwich, CFO of Siemens Digital Software and Melissa Hurrington, CFO of Premier Claims to share their "Tales from the Trenches: CFO Stories and Lessons Learned". If you couldn't join us for our quarterly finance leadership lunch and learn, here's what you missed:
Key Takeaways:
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CFOs are human, and the most complex challenges they'll face are human problems
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Predicting economic outcomes can be less important than ensuring your team is resilient enough for them
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Make tough decisions by zooming out before emotions are involved
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Reaping the benefits of technology will require new skills for CFOs and their teams
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If finance leaders hope to innovate, they'll need to invest — in talent
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Key CFO lessons learned
CFOs Are Human, and So Are the Complex Problems They Face
There are a few reliable touchstones in the conversation about the role of CFO — it's evolving, it's increasingly strategic in nature, and it's packaged with complex challenges and lessons learned. Overcoming these challenges is rewarding, but few can execute a perfect solution and stick the landing on the first try — there are more learning experiences than flawless runs. These learning experiences are crucial to being effective in the role: they define a CFO's worldview, shape the strategy they build within it, and ease iteration going forward. They can also be surprising.
The biggest surprise, sometimes, is how on the surface, what appear to be CFO-specific challenges are often universal to the experience of just being, well, human. That's what Melissa Hurrington discovered when she found herself profoundly burned out and in the emergency room, not once but multiple times.
"I'm a wife, a mom, CFO of a scaling company coming out of COVID and I thought it was all mine to carry, and I carried that responsibility very heavily. You realize very quickly how replaceable you are [at work]. The one place I wasn't replaceable was in my home, and I was quite literally going to kill myself being the CFO of a company, and realizing that I needed to develop my obituary, not my resume. We're all going to die." Hurrington acknowledged that it may sound dark, but it shouldn't be surprising. Understanding the depth of her burnout and its potential consequences forced her to reorder her priorities fast, a process that she called the largest challenge she's had to overcome in the last three years."
Nentwich's largest challenge may have been less personal, but it was certainly no less human in nature. Citing a major overhaul in his company's business model, and a realization that a sudden shift in direction was not going to be immediate or easy with a headcount of over 20,000 people spread across 49 countries.
"For me, the big lesson in that was in how to manage team dynamics and organizational dynamics. It meant having discussions around organizational psychology: which buttons you need to press to reach the most people within your organization. How do you make sure that knowledge doesn't just sit on your desk and can spread out in a global organization. Otherwise, you're just spinning the wheel with no impact and you'll get under it."
In situations like these, Nentwich says, soliciting and internalizing honest, candid feedback is an absolute imperative, even if it's not always easy to hear. "Sometimes you need to have people that can [help you understand] that you're not effective in the way you operate. It's challenging, but that is the only way you can grow and learn and adapt. You need to find the right people for the right challenge."
Innovation & Resilience: Top CFO Lessons Learned
Every year holds potential turbulence, and that's especially true in an election year with high inflation and a recession that seems to always be lurking just on the horizon but never quite makes its impact known. It's true that being able to anticipate what's coming around the corner can be the difference between surviving and thriving, but both leaders advise against becoming too mired in trying to guess what's next.
For Nentwich, that means focusing his concerns less on the economic conditions he'll have to operate within and more on preparing his team to take them on, whatever form they happen to take. "One thing we know for sure is that we don't know what it's going to be like 12, 18, 24, or 36 months from now. If you're trained to be stubborn and just executing on your plan, you will hit a roadblock. You don't know what it will be. Will it be the effects of an election? Will it be artificial intelligence? You name it — there are so many opportunities out there that can disrupt your journey. You need to be ready and empowered and reflective enough to deal with it as it hits you."
Hurrington agrees. "I've given up on predicting what the next thing is going to be that's going to shake up our world…Instead of planning for Scenario A, B, and C, I'm planning for that resilience to be able to switch between them." She likens her approach to the way professional athletes prevent career-ending injuries by preparing their bodies to withstand them. "How can we make sure that we're not tearing when we have to make a sudden pivot? Building up that resiliency is what's really powerful."
Make Tough Decisions Before Emotions Run High
Even as CFOs prepare for any eventuality, they are tasked with forecasting the most likely ones, which, Weis points out, has been especially challenging of late, especially when, as Hurrington points out, a 20-day month end close isn't as likely as it once was to provide data current enough to paint a realistic picture.
Adapting to this, she advises, requires a transparent approach that takes the very long view, illustrating the point with a hypothetical. "Let's say we missed our Q1 revenue goal. We'll have to execute on our plan for that, which we should have already talked about and hashed out. We have made those decisions when emotions were not involved, and everyone is on the same page."
Nentwich favors a zoomed-out approach, in times of uncertainty, too. "In times of uncertainty, I'm not a fan of doing forecasting on a very detailed level. [When] things are changing so dramatically, those details are more reflective of the discussion around those changes than anything that will help deal with them. So, in times of uncertainty, we try to reduce the granularity of the forecast in order to find the time to have the tough discussion of what happens if we don't experience the scenarios we've planned for."
AI and Automation are Shaping the Skills CFOs Need — and Look For
When the conversation turned to technology, both CFOs expressed optimism and excitement around automation, AI, and other new technologies poised to augment or even overhaul the finance function.
"For the first time," said Nentwich, "I think we're seeing a technology that will bring productivity into finance very, very quickly. I've been going through the automation route and realizing that there are things that have always revolved around a 100% standardized process, and when you don't have a 100% standardized process around the world, they fail at scale. With some of the new GenAI tools, it's fascinating to see what skilled people can achieve and the speed and the impact that these kinds of tools can bring. It's very promising." Hurrington agrees. "Doing more with less is my favorite part of my role [as CFO]. I oversee eight departments, including our public adjusters and the service we provide [to customers]. In my head, it's like the switchboard from 1920. You can pull all these little levers and there's hundreds of opportunities to turn something around faster or do it better."
Neither CFO sees this new technology as a way to supplant human capital, but rather as a new tool for unlocking their teams' capabilities. "Every single time I automate something, it's not to save on budget spend — if that works out, great — it's to take something off [someone's] plate so [they] can take on the next challenge."
Adopting new technology like this means knowing what skills to look for in new talent and which to develop on existing teams. "I think going forward, we are seeing that we need much more people that can understand the organization data," Nentwich predicts. "If you always find a proper solution for a problem, you solve one problem, but the next problem will be slightly different — you will need a different way of solving it. If you're able to work with data, you will find a way to scale with data through the problems across the organizations."
As for Hurrington, she's looking for "Lifelong learners — I am looking for somebody that whatever is going to happen a year from now that we can't even possibly imagine today, they're going to get excited about it and adapt to it."
CFO Lessons Learned: Innovation Requires an Investment in Talent
With so much change on the horizon and so much transformation already underway, CFOs who want to innovate have an unprecedented opportunity to do so. But how can they do it without sacrificing financial discipline as the stewards of an organization's assets? Weis posed this very question to the panel.
"I learned I had to talk less," said Hurrington. "Even if I have I know the answer or have an idea, I need to talk less. I'm someone who is unimpressed by my own job title — it doesn't mean anything. But other people see that job title differently. If I'm out here just spitballing and throwing stuff at the wall, people are taking it as orders, even if it's one of the worst ideas I've had in a hot minute. If you're noticing that over time, everbody's head snaps to you, then when a question comes up or a problem arises you just have to talk less. Let your team come up with the ideas while you provide the guardrails."
"You need to have very, very good people that will give you the time and space to find tomorrow's solution," Nentwich agrees. He urges finance leaders to build risk-taking into their strategies by carving out separate resources for that purpose. "There always needs to be money to transform the company and to transform your organization, to make sure that the next level is coming. You can only hold your breath for so long. And then suddenly you have to catch up."
