RESEARCH REPORT
How CFOs can turn any decision dilemma into growth
5-MINUTE READ
July 5, 2023
In brief
- Our Accenture CFO Decision-Making Survey, August 2022, uncovered insights into a decision-making dilemma CFOs face today.
- 86% of CFOs say the speed of their strategic decision-making has increased.
- 67% of CFOs say they feel paralyzed at times by the number of decisions and volume of choices they’re expected to make.
- Our CFO Success Paradigm Survey, September 2022, finds that only one in 10 CFOs achieve their organizational and professional objectives.
Today, leading organizations are looking at new ways to reinvent the enterprise. The goal is to fuel growth and optimize operations. And they’re turning to CFOs to drive their sweeping reinventions. But as the speed of business increases, so does complexity. Understanding what’s needed to accelerate interconnected transformations is key. It’s how CFOs can drive successful enterprise reinvention. It’s also a critical skill for the modern CFO.
Yet, CFOs face an extraordinary number of decisions to make on compressed timelines. Each one carries cascading consequences in our constantly shifting world. This puts CFOs at the center of what psychologist Barry Schwartz calls the “paradox of choice.” The volume of options and their interconnected nature, often hinders more than it helps. It slows decisions down rather than accelerating them. And in some cases, it can lead to decision paralysis.
To help CFOs overcome the challenges they face today, Accenture has developed two complementary points of view. They explore how CFOs can maximize the effectiveness of their decision-making and unlock the potential impact of their strategic choices in today’s fast-paced and complex business environment.
Part 1: The Paradox of Choice for CFOs
In this point of view, we present insights on how CFOs can overcome the paradox of choice, accelerate strategic decision-making and unlock greater shareholder value from an enterprise reinvention agenda. Download Part 1 now.
Part 2: The CFO Success Paradigm
In this point of view, we explore how a dynamic combination of three variables can help CFOs cut through the decision-making gridlock and unlock every decision’s potential impact. Download Part 2 now.
The era of enterprise reinvention
As the speed of business increases, so does complexity. Yesterday’s organization isn’t built for the pace of change today, and leaders know it.
Take, for example, our CxO Pulse survey of 3,200 C-suite executives—held from December 2021 to January 2022. It found that 90% of C-suite executives surveyed believe their organization is undergoing an accelerated digital transformation. And those that are successful at it are using technology, data and artificial intelligence to transform every aspect of the enterprise. They’re optimizing operations and fueling growth.
But who is often driving these sweeping reinventions? The CFO.
CFOs are architects of reinvention
Effective enterprise reinvention requires making decisions on interconnected topics and issues in parallel and at speed. This complexity can unlock greater value for stakeholders. But it also can create greater risk. It puts CFOs under more pressure than ever before to make the right call.
68%
of CFO Decision-Making Survey respondents say their organizations are focused on three or more transformation initiatives in parallel.
Source: Accenture CFO Decision-Making Survey, August 2022
The paradox of choice
CFOs today have a unique vantage point. Their responsibility for financial discipline, coupled with modern analytics, gives them cross-enterprise visibility. It allows them to connect the dots in ways their C-suite partners can’t. As a result, CFOs now hold much more decision-making power than previous generations did.
They also face an extraordinary number of decisions to make on compressed timelines. Each one carries cascading consequences in our constantly shifting world.
This puts CFOs at the center of a “paradox of choice” challenge. The volume of options and their interconnected nature often hinders more than it helps. It slows decisions down rather than accelerating them. The challenge to effective leadership is extraordinary.
67%
of surveyed CFOs feel paralyzed at times by the number of decisions and volume of choices they need to make.
The CFO success paradigm
This new paper explores how CFOs can execute better decisions, realize organizational and professional success and achieve a new performance frontier in an era of continuous transformation and Total Enterprise Reinvention.
Our CFO Success Paradigm Survey confirms, and our client work supports, that the combination and alignment of three variables—CFO leadership style, the company’s strategic imperative and its culture—determine how successful CFOs can execute their decisions and realize organizational and personal success.
Cracking the code to better decision-making and organizational success starts with understanding your success paradigm. When properly calibrated, these three variables work together like tumblers in a locking mechanism to help CFOs take the right actions, at the right time and achieve their goals.
Of the three variables that dictate CFOs’ success, leadership style wields the greatest influence. It is a stronger predictor of organizational success than a company’s strategic imperative and culture. Our research reveals four leadership styles that determine how CFOs execute change, take action and gain buy-in.
- Financial Engineers are analytical
- Problem Solvers are tactical
- Collaboration Creators are inspiring
- Change Agents are strategic
Another variable that shapes CFOs’ success is the strategic imperative of the business. Today’s CFO is dealing with more issues than ever before. The type of imperative will also influence how CFOs approach a problem and the measure of success. Our research reveals four strategic imperatives:
- Continuous Improvement – “staying the course”
- Acceleration and Growth – “scaling the business”
- Disruptive Change – “emerging from chaos stronger”
- Burning Platform – “overcoming acute challenges”
The third variable that contributes to CFOs’ success is the culture of the company. Company cultures influence how decisions are made and acted upon. They are entrenched. As such, CFOs need to adapt their personal style to navigate the benefits and limitations of the culture in which they operate. Our research reveals four typical types of company culture:
- Consensus-Driven – in which all voices matter
- Growth Mindset – in which teams come together to execute big ideas
- “Big Bet”-Focused – in which actions are highly strategic and ruthlessly prioritized
- Top-Down – in which teams rally around leaders’ decisions
For each CFO, there are multiple leadership styles, strategic imperatives and company cultures to navigate. Their dynamic nature and interaction play a singular role in enabling, or hindering, organizational success. What is key is for CFOs to understand their leadership style and success combination.
Our analysis finds that CFOs’ success and longevity are tightly linked with their ability to align their leadership style, strategic imperative and company culture. That alignment underpins the success paradigm for all CFOs today.