Why You Need (To Be) A Purpose-Driven CFO

By Andy Burrows

Generalisations About Finance

As I reflect on my 25+ years of working in the Finance departments of a variety of businesses, the common feeling I get is that of busyness.

Finance is a very busy function to work in. There are always deadlines. Monthly reporting. Quarterly forecasting. Annual budgeting and medium term planning. If there’s a big project, Finance is in the thick of it, called in at short notice to “pull the numbers together”. We are always firefighting. Transactions gone astray. New products to code that no-one told us about. New suppliers that need to be paid before we knew they even existed. The pace is frenetic.

And in the midst of that busyness, we forget why we do what we do.

And while investors, owners and shareholders rely on the CFO to lead the business with the CEO, by and large we’re not actually very good leaders.

We think we’re strategic thinkers, but we’re not.

I don’t say that lightly. But the reason we’re not strategic, why we’re not great leaders, is because, in the main, we’re not purpose-driven.

During a keynote speech, I once asked a room of 100 CFOs to raise their hands if they had a strategy for Finance. Only 2-3 hands went up.

Not long before that, I’d been involved in trying to start up Finance Transformation Programs in two different companies. The CFO of one of the companies stopped me when I started to ask about a vision for Finance, saying he didn’t want to hear “consultant speak”. The other was just desperately keen to get on and start improving things. “We can come back to those, definitely important, vision-y things later.”

The result is more busyness, but not a lot of progress, as I see it.

We may have made Finance cheaper, with centralised shared services, outsourcing, automation, and the like. But are we doing any better? Certainly, the Finance people I speak to are no less stressed now than my Finance colleagues and I were 25 years ago.

Purpose-speak is Not New

What do I mean by “purpose-driven”?

Rick Warren wrote a very popular Christian classic called The Purpose-Driven Life a few decades ago, encouraging us to see every part of our lives as flowing from a much-higher purpose.

At around the same time, Stephen R Covey was publishing The 7 Habits of Highly Effective People. Habit 2 is “Begin With the End in Mind”.

A decade or so later, Simon Sinek was giving his famous TED talk, which gave rise to the book, Start With Why.

Lots of people have been saying it. Fewer people have been doing it.

In essence, when I talk about the “Purpose-Driven CFO”, I’m talking about the same concept.

Here are some words from Covey, which I see being played out in Finance all over the world:

“It's incredibly easy to get caught up in an activity trap, in the busy-ness of life, to work harder and harder at climbing the ladder of success only to discover it's leaning against the wrong wall. It is possible to be busy - very busy – without being very effective...

“... If the ladder is not leaning against the right wall, every step we take just gets us to the wrong place faster. We may be very busy, we may be very efficient, but we will also be truly effective only when we begin with the end in mind.” (The 7 Habits of Highly Effective People, Stephen R Covey, p98)

How Can We Know How Well We’re Doing?

Think of it this way: How can we know how well we’re doing at something? How can we know whether we’re doing our job in Finance well or not?

This is the question of performance. How am I performing? How is the business performing? How is the Finance function performing?

What I’ve realised is that the general definition of ‘performance’ is ‘the extent to which someone or something is meeting its objectives.’

To know how well you’re doing, you have to know what you’re trying to achieve.

Ok, I know that you all know that!

You might say, “yes, I know that my objective is to get the monthly management report out by close of play on working day 7, with no errors or inconsistencies.”

But it’s deeper than that.

Where Do Objectives Come From?

Just ask yourself, why do you have that objective to get a monthly management report out by the end of wd7?

I’m not going to go into that specific question here. That’s for another article. My main point is that our objectives flow from something higher – our mission and our vision, both of which must reference our purpose.

Essentially, our mission is what we do and why we do it. Our vision is what we want to achieve by doing what we do.

If we achieve all our objectives, then we will be fulfilling our mission, and heading towards our vision.

What’s the Purpose of Finance?

Just think, why does a business employ Finance people to do things? That, surely, should give us our mission.

Well, let me say something that you’ll probably think is extremely obvious.

Finance people – and any other people – are employed by the business to help the business.

Yes, I know it’s obvious. But if it’s so obvious, why do we make decisions that make it harder to help the business?! Why do we take away the friendly neighbourhood Finance team, who can help at a moment’s notice, and replace it with a shared service centre in a different building in a different country, hiding behind helpdesk applications and chatbots?? To help the business? No! To save money. We seem to think that the only way we can help the business is to be cheaper, but in being cheaper we accidentally help the business less.

Now, I’m not saying that it’s wrong to have shared service centres. What I’m saying is that quite often we’re not aware of the compromises we’re making, the trade-offs, because we haven’t got a clear view what our mission and purpose is.

But, the real question our mission statement has to answer is how we help the business, and what expectations the business has.

Purpose-Driven Finance = Business-Focused Finance

And here I’m going to wrap up this article with one final point. (Maybe I’ll have a stab at a Finance mission statement in another article.)

My final point is that when we look at our mission in terms of how we help the business, and what the business expects of us, we realise that everything we do is to contribute to the business achieving its vision.

And that means that everything we do in Finance must be explicitly business-focused. We must have the performance of the business in mind when we do anything in Finance.

Purpose-Driven Finance is Business-Focused Finance. This is what Finance leadership, and Finance strategy, is all about.

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About the Author – Andy Burrows

Qualified as a chartered accountant in the UK, Andy Burrows has worked for more than 25 years as a senior Finance professional in a variety of businesses of different sizes and sectors. He is now a popular writer in Finance and Accounting, and provides online learning and coaching to help Finance people become better at helping the businesses they work for. In 2019 he was described as one of the "Top voices on LinkedIn for Finance, accounting and FP&A".