Change agent the Agile CFO.

• Author: Lukens, Stephen J.
• Position: LEADERSHIP - Chief financing officer

At most organizations, all roads to innovation lead back to the CEO. Think of Apple's Steve Jobs or A.G. Lafley of Procter & Gamble Co. CEOs are the strategic pacesetters and visionaries. The CFO, on the other hand, is often viewed as an operational policeman, an accountant or a bean counter. The CFO's job is to react to problems, control costs and be the voice of risk avoidance.

This view needs to change. Today's CFO must be a key contributor and leader in innovation and business strategy. The new CFO, the "Agile CFO," is a leader who is close to both the strategic vision and the current realities of the health and operations of the company, making him or her a critical enabler of innovation.

IBM recently interviewed 765 CEOs, and discovered their top three innovation and growth-focused imperatives. The Agile CFO understands this agenda and finds his or her place in supporting and enabling these three imperatives.

1. Lead Innovation Through Insight.

   To foster innovation that matters, the CFO has an opportunity to act as the innovation role model. This goes beyond merely setting an example for the organization, to taking real strategic and tactical actions that drive innovation and growth.

   Identify business model innovation opportunities. Perhaps the most fundamental step in enabling innovation is to recognize and act upon innovation opportunities when they occur. The greatest growth drivers are often from innovation within the business model itself.

   According to the IBM Global CEO Study 2006, companies investing in business model changes experienced 5 percent higher operating margin growth (over five years) than their closest peers. This is significant when compared to the performance of companies investing in products and services or base operations.

   Create a finance function that enables insight and flexibility for business model innovation. Over half (53 percent) of senior finance executives say that information is plentiful but not relevant or suitable for taking action, and only 9 percent believe they excel at gathering, interpreting and conveying information to senior management in a way that helps drive profits.

   Often, the greatest area of control and the most immediate tool the Agile CFO has to support business model innovation is the finance function itself. By developing a modern, flexible and responsive financial function, the organization can better meet its day-to-day operations and decisionmaking requirements, while...