Speed Is The New CFO Advantage |
It seems like everything today is on fast forward. The highlight reel of policy is zooming through change, with tariff rates added, shifted, paused and taken away; consumer spending in flux; stock markets, precious metals and currency values blustering forward in an uneven way with quick and dramatic changes; and unsteady geopolitics constantly scrambling how you do business with the world. Technology is also running at high speed, with new apps, capabilities and dangers from AI constantly changing the business landscape—as well as ideas about robotics and quantum computing pulling ever closer to making a seismic difference in business operations and strategy.
Your job is also speeding up—and speed truly makes a difference. A new study from management consulting firm West Monroe examines the speed executives want, and what’s preventing them from moving quickly enough. Company leaders say they believe they’re losing a significant portion of revenue because they’re taking too long to act: 38% of executives say they see a 1% to 3% loss, and the same amount estimate a 4% to 5% loss. More than four out of five—82%—think they could move faster without internal delays.
What’s causing those delays? Among C-suite executives, it’s relatively evenly split: 39% say they have technology limitations, 38% blame skills gaps or overwhelmed teams, and 32% say layers of management and approvals are slowing them down. And these are all good reasons, but there’s also the drive to make the right decisions: 44% say they pause on decisions because they want to have certainty, and 26% fear the risk of making the wrong choice. (And lower managers see this: Only three in 10 say their leaders are decisive.)
So how can this change? AI can help, but it needs to provide the right kind of analysis to the right people to make the right decisions. Two-thirds of executives say they’re using AI and automation to speed up execution, while 39% are taking a cross-functional team approach and 36% have streamlined their approval processes. Having AI can only do so much, though. It needs to be used by all—and just 36% of middle managers say that it’s helped with productivity. To speed decision-making, companies need to provide training, shift their internal culture and work with systems to ensure the AI is truly a help. After all, the world is most likely only going to get more complex.
CFOs have been adapting to the complexity by becoming more strategic partners in their companies. I talked to Todd McElhatton, chief operating and financial officer at software company Zuora, about how and why the role has changed, and how CFOs can amp up their strategy. An excerpt from our conversation is later in this newsletter.
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It’s been a while since a week was full of big ups and downs in the markets, but last week saw huge gains and drops—both on the stock market and for precious metals. It also ended with a partial government shutdown, which the House of Representatives could end with a vote today.
The two biggest headlines from last week—and the cause of the roller coaster valuations—both have to do with the Federal Reserve. Last Wednesday, the Fed’s Open Market Committee made the widely expected decision to hold interest rates between 3.5% and 3.75%. Committee members noted that economic activity appears to be expanding at a solid pace and unemployment is continuing to stabilize, but inflation is still trending above the Fed’s preferred 2% rate.
Forbes senior contributor Erik Sherman writes that the underlying economic imbalance, in which many average Americans struggle with affordability, often makes the Federal Reserve’s interest rate decision tricky. Sherman writes that roughly the top 10% of households account for almost half of consumer spending, making it difficult to find a true picture of the economy. But while the Fed doesn’t directly consider every indicator in its decision-making, the average American’s view of the economy isn’t great. Figures published last week by the Conference Board show consumer confidence last month hit its........