Supporting & balancing: risk and performance goals.

• Author: Hill, Steven
• Position: Innovation

Game-changing acquisitions or expansions. A new directive from the board. New laws and regulations. A new product introduction, function-expanding technology or sudden misstep by a competitor. These are just a few of the many potentially "disruptive" forces businesses are facing today, each of which is capable of having a profound impact on an organization.

Across the spectrum, business leaders are addressing disruptive changes that can come at lightning speed, and are looking for innovative ways to turn them to their advantage.

Because chief financial officers have a holistic view of the enterprise that few others share, they take a seat at the leadership table when strategic decisions are being made about how to cope with disruption. With the economy stalled, a balanced yet innovative approach to managing performance and risk is especially critical. CFOs at leading companies took a highly disciplined approach to cost control during the most recent recession. Now they must take similarly rigorous steps to align themselves both with their companies' evolving growth and innovation agendas, as well as with their audit committees' risk management concerns.

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The key will be to find innovative ways within the finance function to support the organization's risk goals and its performance goals--and, in the process, turn innovation into a cultural discipline.

Supporting Organizational Innovation

From supplying more insightful business intelligence and data analytics to anticipating and responding to market disruptions, today's CFO is expected to be as much a business innovation strategist as a financial expert and risk manager. Research confirms that innovation is being used throughout the world as a stimulus for new structures, new thinking and new solutions to problems.

In this environment, the pursuit of growth in turn drives relentless innovation along with the need for agility in deploying innovative solutions in the board room as well as on the sales floor.

Further, the environment in which CFOs operate is constantly changing and increasingly disruptive. Market fluctuations and credit turbulence create opportunities and challenges, while new technologies, such as cloud computing, radically change operating models and increased shareholder scrutiny and public demands for transparency put new pressures on the finance function.

Consequently, in addition to transforming finance to meet evolving short-, medium- and long-term needs, CFOs must also be in lockstep with their colleagues in the C-suite and with their boards. Understanding these stakeholders' different goals is the...