Unlocking productivity: the evolving role of the CFO
Understanding what drives productivity is crucial to economic growth, innovation, and living standards, making all of us stakeholders in the efforts to achieve it. However, while boosting productivity remains a critical objective for businesses, its implementation often falls short of meaningful improvements, resulting in many missed opportunities, writes Irena Teneva, Associate Technical Director – Research and Development at AICPA & CIMA.
A recent CFO survey by Deloitte reveals that poor productivity and weak competitiveness in the UK economy are significant concerns for CFOs, ranking right behind geopolitical risks that fuel economic uncertainty.
Inadequate productivity hinders growth opportunities, higher profits, and employee engagement and retention, and ultimately prevents organisations from thriving in a competitive business landscape.
However, CFOs also say that, if properly managed, improved productivity presents an opportunity to offset other threats they have less control over, such as inflation and high interest rates.
The challenge? Understanding the root cause of low productivity is puzzling.
There are numerous drivers and barriers to productivity within organisations, meaning that it can only be enhanced through a joint strategic effort encompassing people, finances, and technologies.
This is what we call “strategic productivity”.
What is strategic productivity?
Strategic productivity is a comprehensive approach to enhancing an organisation’s efficiency and performance, to create more value for customers and sustain long-term growth that benefits all stakeholders. It focuses on aligning all productivity initiatives within an organisation, utilising key metrics and analysis and embedding productivity objectives in the business strategy.
According to The Productivity Institute, there are five key drivers of strategic productivity:
Innovation and digital adoption enable organisations to harness new technologies for sustained productivity gains, through greater efficiencies in production and service delivery, as well as improvement and development of new products and services. Key components include research and development, digital transformation, and knowledge diffusion.
Enhancing worker skills and well-being ensures that organisations have motivated and capable employees. Key components include providing training, improving engagement, and enhancing adaptability to change.
Effective leadership and management are critical for setting the direction and fostering a culture of continuous improvement. Key components include developing inclusive leadership, focusing on business outcomes, and building flexible teams.
Marketing and communication help organisations to understand market needs and effectively position their products and services. Key components include strong collaboration and communication across departments, using the organisation’s brand as an asset, and using data analytics.
Mobilising finance helps organisations ensure that they have the necessary resources to adequately invest in their productivity-enhancing initiatives. Key components include strategically allocating finance to support key investments, using strategic cost management, and valuing intangible assets.
The expanded role of the CFO
In our latest report with The Productivity Institute, Unlocking Productivity: Collaborative Synergies for CFOs, we interviewed CFOs to identify best practices for driving productivity within their teams and organisations. They highlighted the importance of improving both value creation and efficiency, as these elements significantly impact organisational performance and result in enhanced productivity.
With their pivotal role in balancing financial health with strategic growth, CFOs view themselves as leaders who mobilise organisational resources and enable people to work not only harder, but smarter. This is essential to improving productivity.
So how can they do this in practice?
A key strategy to achieve this is to bring the finance team’s core activities, such as data collection and analysis, and providing management information to support decision-making to another level. For example, by leveraging digital transformation and new technologies, they can improve data integrity, transparency and access, and benefit from on-demand, flexible reporting.
This also minimises the need for manual adjustments, improves accuracy, and empowers colleagues across the organisation to access the information they need, so that the finance team can focus on interpreting the information, supporting idea generation, identifying growth opportunities, and collaborating with other teams.
Developing these critical capabilities within their teams will significantly enhance the CFO’s ability to create more synergies across the organisation and adjust business strategies in response to changing market conditions and crises.
With this, the role of the CFO is evolving towards rationalisation, integration, and alignment. They can tie in operating and strategic activities, get a fresh perspective on customer needs and, from there, steer the future trajectory of their organisation.
These new ways of working reinforce a culture of collaboration where teams are not just ‘cost centres’ to the CFO and the finance team, but business partners that engage in an ongoing dialogue and work together to collect and analyse information and KPIs to improve productivity, enhance value-creation, and drive sustainable business success.
To this end, they need to move beyond managing traditional financial indicators and refine productivity metrics to include aspects such as quality and customer value, long-term effectiveness, and growth objectives.
While risk management is critical for preserving an organisation’s capital, it’s no longer sufficient on its own. Striking a balance with commercial savviness is crucial.
The abilities that empower the CFO and the finance team to drive the productivity agenda encompass technical skills such as data analysis, insights, and process optimisation.
What’s more, in the modern business world, successful finance professionals are not only adept with digital tools, but also continuously hone their critical thinking, creativity, communications and storytelling skills – and perhaps most importantly they cultivate their work relationships.
By integrating these diverse competencies, the CFO and the finance team are well-positioned to drive strategic productivity initiatives, ensuring that their organisations are not only resilient in the face of challenges but also poised for sustainable growth and long-term success.
This article is sourced from the following link:
https://www.accountancyage.com/2025/02/11/unlocking-productivity-the-evolving-role-of-the-cfo/
