If a global pandemic wasn’t enough, we’ve entered an era of huge geopolitical unrest, economic volatility, and technological disruption. In short, Chief Financial Officers (CFOs) face a myriad of challenges that don’t simply test their financial acumen, but their strategic foresight and leadership. CFOs are naturally seen as the stewards of financial health, but more and more they are seen as the custodians of corporate strategy, tasked with steering their organisations through the complexities of a rapidly evolving landscape. Tensions in the Middle East, a war in the Ukraine, China sabre-rattling with Taiwan, and with half of the world’s population taking to the polls in 2024, CFOs full skillset will be challenged this year.

The interconnectedness of global markets means that CFOs must be extremely able in assessing the impact of macro and political events on their organisations. Events can rapidly change for both the worse and of course the better, with huge and immediate impact on strategy. From the inflationary effects of geopolitical tensions to supply chain disruptions stemming from conflicts such as the war in Ukraine, CFOs must adopt a proactive stance in identifying vulnerabilities and implementing risk mitigation strategies. Drawing up and reviewing scenario planning techniques in collaboration with other teams, CFOs can develop resilience strategies which enable their organisations to weather challenges while capitalising on any opportunities that may arise.

This is perhaps the hardest challenge for many CFOs, who are tasked with striking a delicate balance between short-term needs and long-term value creation. It’s a perennial challenge for CFOs, but one which comes into focus in softer economies. While cost containment and operational efficiencies are essential for maintaining competitiveness, CFOs must not lose sight of their organisation's overarching mission and strategic objectives. Automation and AI may help in this area and whilst making significant change is often culturally easier in difficult markets, the initial capital outlay isn’t feasible for many firms – many of whom are suffering from margin compression.

However, by adopting a holistic approach to performance management that aligns financial goals with broader organisational aspirations, CFOs can ensure that their decisions contribute not only to immediate bottom-line results but also to sustainable growth and value generation over time. It’s hard balancing act, but one that is essential to position firms for recovery.

In today's data-driven business environment, CFOs are inundated with information from a multitude of sources. While platform connectivity is improving, and will improve again with AI, currently getting clear visibility can be hard in many businesses who often have legacy systems. However, effectively harnessing and interpreting any available data to gain actionable insights into business performance and market dynamics is paramount.

By identifying the key drivers of the business and leveraging any analytics tools, CFOs can extract meaningful patterns and trends from disparate data sets, enabling them to make informed decisions with confidence. Moreover, by creating a culture of data-driven decision-making across the organisation, CFOs can empower their teams to proactively identify opportunities and mitigate risks in real-time.

As mentioned above, AI and automation will play a central role in the modern finance and strategy function. This presents both opportunities and challenges for CFOs. While these technologies hold the promise of enhancing operational efficiency and driving innovation, they also necessitate careful consideration of their implications for workforce dynamics and organisational structure. CFOs must take a strategic approach to AI and automation adoption, identifying areas where these technologies can deliver the greatest value while ensuring that human capital remains at the forefront of organisational success. Implementing AI at the right time, and successfully, is key, as we can all think of doomed IT projects. However, done well and in conjunction with continuous learning and upskilling will be key to taking teams on any transformational journey.

Of course at the centre of all initiatives is talent. The decision to implement AI is driven by human talent. The decision to pursue certain strategies based on data outcomes is currently driven by human talent. Therefore, despite the rapid advancements expected in technology attracting and retaining high quality talent is still key to any organistion. Currently, many teams aren’t in growth mode and this can present leaders with a challenge of how to stimulate and challenge talented colleagues. Rotation, training and development, and secondments are key to retaining high performers who seek ways to broaden their experience.

2024 is likely to be a challenging year for many, but taking a step back and looking at the key over-arching themes which will drive a successful finance and strategy function, leaders can minimise any negative impacts and take advantage of any opportunities.