A new year means new goals, and growth is at the top of the 2016 agenda for most companies. The health of the U.S. economy has rebounded, as indicated by a 5% unemployment rate and the recent interest rate hike, and businesses across the globe appear optimistic about the road ahead. In a study titled Global KPMG CEO Outlook 2015, CEOs identified “developing new growth strategies” and “geographic expansion” as top organizational priorities for the next three years.
While 2016 looks promising, business leaders will also face challenges as they evaluate the right growth strategies for their organizations, grappling with questions like:
- How will we find the right talent as we expand into new markets?
- How do we grow customer relationships when markets are changing?
- How do we navigate regional regulations as we expand globally?
- How might new business models and other market disruptors impact our ability to compete for market share?
Here’s where CFOs have a huge opportunity to drive growth in 2016. In KPMG’s study, more than half of global CEOs (53%) surveyed say the CFO is the executive who will gain the most importance in the next three years. In a KPMG study focused in the U.S., this expectation was even higher at 84%. This makes sense given the CFO has a full view of the organization and brings a strategic financial perspective when evaluating potential investments, opportunities, and risks.
In fact, the role of the entire finance team will continue to evolve, shifting from transactional to more strategic and analytical, working closely with operational leaders to deliver data that informs faster and better business decisions. Finance will no longer just report financial results, but also provide insights into the underlying causes and drivers of those numbers and how they impact growth strategies. For example: How does open headcount impact a company’s ability to expand into a new market, and should they shift talent from other areas to support the expansion?
Access to real-time data about business performance, planning, and people will be a major competitive differentiator between companies that successfully execute their growth strategies and those who fall short.
Companies will no longer make those decisions based on historical data alone, but with real-time data and analytics as well. Finance and organizational leaders will be able to take advantage of continuous and collaborative planning to gain real-time visibility into actual versus planned performance, enabling them to make timely course corrections as needed. The power of predictive analytics will also provide finance with an opportunity to understand not just what has happened in the past or is happening in the present, but what may happen in the future.
While finance professionals will relish the opportunity to have more impact on growth strategies, they’ll find themselves frustrated if they’re stuck with legacy systems that were not designed to help them easily adapt to change and get the visibility and insights they need. As companies focus on building for the future, they’ll need to evaluate whether they have systems that provide them with a holistic view of the workforce, their financials, and operations, and if business leaders can quickly and easily get to that data to make informed decisions. These systems will also need to be flexible, enabling the business to quickly respond to increasing business, market, and regulatory changes.
In fact, I’ll make this prediction for 2016: Access to real-time data about business performance, planning, and people will be a major competitive differentiator between companies that successfully execute their growth strategies and those who fall short. Only with access to consistent and current data can conversations between business and finance teams shift from debating numbers about the past to collaborating on solid strategies for the future.
Let’s all get ready for a big year for growth. If you want to hear more about what finance executives are saying on this topic, check out the Argyle Executive Forum’s “The 2015 CFO Virtual Event: Insights on Driving Growth.” And Happy New Year to CFOs and their finance teams, who are being presented with more opportunities than ever before to help drive their organizations’ growth agendas.