According to new Gartner research, CEOs and CFOs are in agreement on their company's growth investments and technological efforts as top priorities for the rest of 2023. When it comes to growth, 45% of CEOs questioned said it was one of their top three strategic goals, while 62% of CFOs said it was one of their top three.
Maintaining a solid CFO-CEO relationship may be as challenging as it is crucial. CFOs must reconcile the CEO's objectives with what is ultimately best for the firm in their function as corporate sceptics and realists. However, when sales growth and profitability are at conflict, the connection between finance and the rest of the firm can become strained.
Why CFO-CEO strategy alignment is so important?
Whether your company is a small startup or an established business with decades of history, a clear and achievable strategic vision is essential to the organisational success. As CEOs are responsible for the company’s vision, CFOs and finance teams play a crucial role in helping to achieve it. Merging the CFO strategy with the CEO strategy allows the team to make better data-driven decisions.
Technology propels development
Technology, a sector on which CEOs and CFOs alike have their sights set, is one on which leadership agrees. According to data, more than a third (36%) of CFOs consider this initiative to be a major priority. Almost equal percentage of CEOs (33%) concur.
"Balancing future growth investments and CEO expectations, while still tightly managing cost and cashflow, is the tightrope CFOs must walk in the back half of 2023," said Alexander Bant, chief of research with the Gartner finance practice.
"As the business cycle begins to improve, the top questions CFOs should be educating CEOs and boards of directors on include: How should we sequence funding for organic and inorganic growth bets?" How can we best secure capital? "How does the impact on margin and ROIC look when we model it?" Bant stated.
Inflationary Pressures
Inflation is still seen as one of the top three risks threatening the corporate outlook. More than half of CFOs (54%) prefer to boost prices in reaction to inflation, a figure that has fallen by 11% since 2022. While the year-over-year decrease is smaller, the number of CEOs who believe raising prices is a response to inflation is also declining.
According to research, CFOs have overtaken their CEOs in terms of inflation worry when it comes to cost optimisation in response. CFO concentration in this area increased 17% year on year (23% in 2022 to 40% in 2023), indicating that they may be seeing something that their CEOs are not.
Just over a third of CEOs are focusing on cost optimisation as a strategy to combat inflation, and while this is the second most popular response among the group, the percentage of CEOs who responded in the same way last year has remained steady.
Other methods CFOs are collaborating with CEOs to combat inflation include increasing productivity, efficiency, and automation. Although there is no change from last year's responses in this category, the focus remains strong in both groups. Just under a fifth (19%) of CFOs and somewhat more than a fifth (21%) of CEOs believe actions in these areas may control inflation.