As CFO of Canada’s OpenText, an enterprise information management company paving the way for digital transformation for global businesses, there are few better positioned individuals than Madhu Ranganathan to discuss how the role of the CFO is changing – and how up-and-coming finance leaders can maximize their value with today’s pace of change and digital disruption.
Madhu will also be participating as an Executive in Resident in the upcoming CFO Leadership program, in partnership with Rotman Executive Education. I recently had the pleasure of speaking to her about the changing role of the CFO and on the importance of talent development.
1. From your perspective, how is the role of the CFO different today than it was 10 years ago?
Businesses today are a lot more complex than they were 10 years ago, and they’re definitely more global. There are shorter time frames to make decisions, and those decisions have shorter shelf lives, all of which puts pressure on the CFO to truly add value. It’s not enough anymore to be a generalist – CFOs need to have a deep interest in the business.
I can’t emphasize enough the CFO’s role in partnering with the CEO to understand the business model and then aligning financial strategies to address needs of that model. Businesses that are performing best are the ones where the CFO has enabled such alignment and a sense of partnership.
2. You are serving as a Rotman Executive in Residence for the first time this year. What advice would you give to CFOs stepping into the role for the first-time?
The role of CFO will always be a challenging one. What first-time CFOs need to know is that the evolving demands of the job mean that technical and financial acumen aren’t enough anymore. Many CFOs don’t give enough importance to grow their vertical-specific interest and knowledge. The ability to collaborate with the internal business leaders and management teams, and to meet them on their level, is imperative. To do that, when time permits, for example, I’ll sit down with a product manager to understand how a particular product or a solution works.
My best advice for a new CFO is to continuously learn how to balance the details of numbers with the big picture, and then be adaptable to partner with the CEO and management team to effect changes.
3. What role should the CFO play in driving technology adoption and/or digital transformation in their organizations?
We need to lead the way. CFOs have a unique lens into business efficiencies and inefficiencies that few others can bring, especially around identifying the processes that are ripe for improvement and transformation. But to make that happen, we need to work cross-functionally, particularly with IT. I don’t believe the interests of the CIO and CFO teams have ever been more intertwined than they are right now.
4. How do you rate the importance of the relationship between the CFO, CEO and board? How should finance leaders build these key relations?
Alignment is critically important. As I look back at my career, it starts by making it a priority to just listen and understand. CEOs are very strategic and audacious thinkers. Often as CFOs we jump right to how am I going to fund this? Is the ROI there? To succeed with these key relationships, we need to take a step back and understand where the CEO and Board are coming from. Even if I strongly feel something is a no, it is always better to not voice a no right away, think through and revert. Sometimes we have to learn to agree to disagree, yet support and contribute.
These relationships are about continuous engagement. You can’t always put financial value at the core. The more of these engagements that you have, the stronger and healthier these relationships become.
5. OpenText is Canada’s largest software business, and one of the few Canadian organizations to successfully expand globally. What is behind OpenText’s success?
OpenText has always made being “global” part of its DNA – and I think that’s key. Even years ago, OpenText was never hesitant to acquire a company with international operations. Our current work force of 13,000 employees spread over 50 countries, larger with every acquisition. All along, OpenText leaders and management team have emphasized creating a global, culturally thriving environment.
6. Why did you create the OpenText Finance Academy--the internal initiative offering professionally rewarding experiences for students and new grads starting their finance career-- and what does fostering young finance talent bring to the business?
This goes back to the first question – it is so important that emerging CFOs have a good mix of skills. What we’re seeing in new graduates is more agile thinking and enormous friendliness to technology. We need such skills right now, and there’s no better place to find them than the university corridors; Toronto and Waterloo are ripe for us to secure such talent. After the success of our first year, we will make it an imperative to continue to draw a percentage of our talent pool from universities.
The benefit is two-fold. For one, we help provide the technical and soft skills training that new graduates need. Second, we have to believe there’s a lot to learn from these future leaders and create an environment where we welcome their ideas. I often joke with my team that we need to think and behave young to embrace this talent. The OpenText Finance Academy will help make these principles part of our organizational DNA.
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