The role of the Chief Financial Officer (CFO) in businesses has been expanding and evolving rapidly. A recent report by SAP Concur tackles the emerging theme of CFOs taking increasing responsibility for managing uncertainty in their organizations. SAP Concur surveyed 220 chief financial officers and senior finance leaders for its latest CFO Insights report. The research, carried out in July and August 2023, covered the USA, Australia, Canada, the UK, Germany, Brazil, and Mexico. It included a wide range of sectors from financial to healthcare, utilities, consumer, and industrial.

The global survey found that an emphatic 90% of senior finance leaders agree their key task today is to prepare businesses for the unexpected. Only a mere 2% disagree. In today’s business environment, certainty is a luxury organizations rarely enjoy. Businesses need certainty to plan and grow. The IMF’s World Uncertainty Index has trended towards growing economic instability since 2000, fueled by events such as the dotcom crash, the Global Financial Crisis, Brexit, and the COVID-19 pandemic. More recently, the Ukraine war has sparked another surge in economic upheaval, with supply chain disruptions, rampant inflation, and higher cost of capital.

This constant change and unpredictability have placed a new burden on CFOs. They now have a heightened responsibility for managing risk and uncertainty within their organizations. This shift in responsibility has a profound impact on their roles, presenting both challenges and opportunities.

For instance, CFOs now need to focus more on forecasting and risk management. They must develop new strategies and operating models to respond to extreme uncertainty. This involves fostering strategic courage and adopting new ways of thinking about leadership.

Moreover, CFOs are encouraged to be mindful of their people, understand the human process of managing emotions, and find ways to cope in this uncertain environment. This includes supporting their team when uncertainty is high, leading through change and uncertainty, and showing authority and confidence in defining new directions with specific goals.

Even though managing uncertainty is a complex task, it also offers CFOs an opportunity to further elevate their status within the organization. Their increased involvement in areas like forecasting, analytics, innovation, and artificial intelligence, and their relationships with other senior leaders, such as the Chief Executive Officer (CEO), can ultimately propel well-equipped CFOs to greater heights.

By its nature, it will always take work to manage growing levels of risk. But with the right aptitude and technologies, finance leaders can overcome the challenges and enter an exciting new world of opportunity. Those who make the right moves and position themselves carefully, as laid out in the report, will reap the benefits with upgraded roles and careers. They will gain the platform they need to help guide their organization towards a more sustainable, profitable, and stable future.

In conclusion, the role of the CFO in managing uncertainty is becoming increasingly critical. The ability to navigate through this economic turmoil and lead their teams effectively will not only ensure the organization’s survival but will also enhance the CFO’s position within the organization.