Business Recovery » How CFOs can align the C-Suite and board for successful ‘reinvention’

How CFOs can align the C-Suite and board for successful 'reinvention'

As the business landscape grows increasingly volatile and competitive, company leaders are facing a stark reality – transform or perish.

According to PwC’s latest Pulse Survey, a staggering 76% of US business executives believe that the average company in their industry will be out of business within 10 years if it fails to change its current business model. For US CEOs, the outlook is even more dire, with 82% anticipating industry peers will not survive the coming decade without reinvention.

This sense of urgency has spurred executives to action, with many embarking on a diverse array of business model reinvention initiatives. However, the data reveals a critical misalignment that could jeopardise these efforts and, ultimately, a company’s very survival.

While business leaders broadly agree on their organisation’s future vision, they are significantly misaligned on the path forward, including how long it will take to execute the company’s transformation.

The Alignment Gap

The PwC Pulse Survey findings highlight a troubling disconnect within the C-suite and boardroom. Nearly six in ten respondents (59%) report strong consensus on the future vision for their company. However, when it comes to the critical details of implementation, the picture looks very different.

Only 42% of executives say there is strong consensus on the timeline for executing the company’s vision, and a mere 41% believe there is strong alignment on how the business model will change. This lack of alignment on the “how” and “when” of reinvention is a significant risk factor, as CEOs need a cohesive leadership team to drive transformative change successfully.

The Importance of C-Suite and Board Alignment

The ability to implement change has become a make-or-break competency for organisations navigating today’s volatile business environment. However, this will only be possible if CEOs can achieve alignment across the entire leadership team, including the board of directors.

The survey data reveals that CEOs are not finding this alignment consistently across the C-suite. While 76% of CEOs consider their COOs to be highly effective business partners in driving the company’s strategy, the numbers drop significantly for other key roles. Only 64% of CEOs say the same for their CFOs, and a mere 54% believe their board members and risk leaders are equally effective.

This misalignment is particularly concerning when it comes to the CEO-board relationship. As the leaders directly responsible for developing and overseeing the implementation of the company’s strategy, the CEO and board must have a strong, strategic partnership. CEOs who do not feel they have the full support of the board in making necessary changes are at a significant disadvantage.

Bridging the Alignment Gap

Given the critical nature of this alignment challenge, CFOs are uniquely positioned to play a pivotal role in bridging the gap between the C-suite and the board. As strategic business partners to the CEO, CFOs can leverage their financial expertise and enterprise-wide perspective to foster greater cohesion and clarity.

One of the CFO’s key responsibilities is to provide the board and other C-suite executives with accurate, timely, and insightful financial information. By enhancing the quality and transparency of financial reporting, CFOs can help ensure that all decision-makers have a shared understanding of the company’s current state, financial health, and the potential impact of proposed changes.

CFOs can work closely with the CEO and board to conduct rigorous scenario planning and risk analysis exercises. This will help the leadership team align on the potential challenges, opportunities, and resource requirements associated with different reinvention strategies, as well as the likely timelines for implementation.

As the financial steward of the organisation, the CFO is uniquely positioned to facilitate collaboration and information-sharing across functional silos. By fostering stronger connections between the finance team, operations, IT, and other key departments, CFOs can help break down barriers and align the organisation around a common vision and plan of action.

Effective communication and trust-building are essential for aligning the C-suite and board. CFOs can leverage their strategic advisory role to serve as a trusted bridge between these key stakeholders, ensuring that concerns are heard, and decisions are made with a shared understanding of the implications.

Working closely with the CEO and board, CFOs can help develop a comprehensive transformation roadmap that outlines the specific steps, timelines, and resource requirements for executing the company’s reinvention strategy. This shared plan of action can help ensure that all leaders are aligned on the “how” and “when” of the transformation journey.

The CFO’s Role in Navigating Reinvention

In the face of intense competitive pressure and the looming threat of industry disruption, business leaders must embrace reinvention as a matter of survival. However, as the PwC Pulse Survey reveals, the path to successful transformation is fraught with the risk of misalignment within the C-suite and boardroom.

CFOs, with their unique financial expertise, enterprise-wide perspective, and strategic advisory role, are ideally positioned to play a pivotal part in bridging this critical gap. By enhancing financial transparency, facilitating scenario planning, strengthening cross-functional collaboration, and building trust, CFOs can help ensure that the entire leadership team is aligned on the company’s reinvention strategy and its successful execution.

As the business world continues to evolve at a breakneck pace, the ability to transform quickly and effectively will be a key determinant of an organisation’s long-term viability. By stepping up as strategic partners to the CEO and board, CFOs can help their companies navigate the complexities of reinvention and secure a prosperous future.

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