February 22, 2024

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Business Life

Why Today’s CFO Must Embrace Enterprise Strategy

The role of the finance function is evolving, demanding technological and strategic acumen for both finance leaders and their teams. In an increasingly complex and uncertain time, CFOs must broaden their traditional competencies and embrace their role in risk management, forecasting and long-term strategy. This was the topic of a recent conversation I had with Hari Avula of Clif Bar & Company, the producer of energy food products also turning 30 this year. Hari’s title is itself interesting and indicative of these trends – not just a CFO but a chief financial & strategy officer. But as Hari said, whatever the finance leader’s title, they must be fully involved in enterprise strategy to deliver the best value to their organizations.

Jeff Thomson: Your title is chief financial & strategy officer, rather than just CFO. What does the “Strategy” part of your role entail? Do you see the CFO role evolving to encompass more proactive decision making and strategy development than previously? What does this mean for aspiring finance professionals who must develop skills in data analytics and automation, areas beyond traditional finance and accounting?

Hari Avula: My role at Clif Bar is focused on developing “enterprise” strategy, which entails building an integrated roadmap of decisions and actions to achieve total company objectives. This is the broadest form of strategy within a business and serves as the framework for the development of more granular strategies around Brand, Product, Supply Chain, Human Resources, IT, Capital Structure, etc. Together, these are developed in a complementary manner to deliver on total company goals.

Effective CFOs today need to embrace ownership of enterprise strategy within their role, with or without it being specifically called out in their titles. With this comes the opportunity to proactively influence decision making across all parts of the organization.

Strategy is also about extending our vision beyond the boundaries of today to anticipate what’s next. With this in mind, we must continually work towards aligning the outcomes we are seeking with the actions required to get there, all while managing resources and prioritization. It’s a constant juggling act and that’s what makes the job so challenging and rewarding.

Aspiring finance professionals need to be agile and curious. We need critical thinkers who understand business value drivers and are adept at allocating resources towards the activities that will drive the highest returns on investment. People in financial roles need to be more tech savvy than ever to leverage automation and eliminate mundane transactional work. By creating “time to think,” finance professionals can deliver more timely, actionable insights to the business.

Historically, when creating finance competencies, we had a column for technical skills like accounting and regulatory, one for business acumen and analytical skills, and another for people management and leadership skills. Today, we have a new column, “digital acumen,” because finance needs to live and breathe digital. It is not about familiarity with Excel or creating flashy presentations – it’s about being able to visualize a world where you are leveraging technology and tools to focus on problem solving versus data gathering and reporting.

Enabling agile decision making is a key area for finance professionals to lead and be proficient in. This includes interpreting data and analysis to quickly identify problem(s) to solve, developing actionable solutions and assessing the trade-offs in decision making. It requires finance professionals to be curious about all aspects of the business and to have a deep understanding of how their role creates value and supports the delivery of overarching business objectives.

Thomson: Your appointment is part of a broader company strategy of cultivating innovation to enable Clif to become a larger player in the CPG industry. How do you encourage innovative thinking within the finance team? How does technology enable greater innovation and what technologies are you using to enhance efficiency and productivity?

Avula: At Clif we operate with a Five Aspirations model – what we call five bottom lines – to sustain our people, planet, community, brands and business. Our Aspirations operate in a virtuous cycle, with one dependent on the other – and they need to be in balance. The challenge to balance the five bottom lines was the most exciting thing for me about coming to Clif. What makes the job fun and interesting is that as a purpose-led organization, delivering strong business results is only one aspect of how we measure success.

When making decisions at Clif, all Five Aspirations are assessed and evaluated for impact on the five bottom lines. This approach requires that our finance team bring together their traditional strengths in creating integrated plans and establishing SMART goals and KPIs and apply them in new and innovative ways to measure these non-financial deliverables. In the process, we are constantly re-evaluating how we measure value creation and building new ROI models for outcomes that today are not captured through traditional financial performance measures or metrics.

Thomson: Responsible sourcing and contributing to a more sustainable food system are important components of Clif’s brand value. How do you help embed sustainability into business processes?

Avula: Clif Bar has been a sustainability pioneer for more than 20 years. When most corporations are still responding to regulatory and activist pressures as a motivator to engage in ESG initiatives, early on Clif made sustainability a key ingredient of its business model to create both commercial and societal value. We recognize that embedding sustainability into business processes is a challenging, complex and continuous endeavor and we keep learning and innovating as an organization to build on the strong foundation we have.

This includes incorporating sustainability objectives into business plans, capital allocation and everyday decision-making processes like ingredient sourcing that is in line with our sustainable nutrition guidelines. It also means aligning resources to desired goals and outcomes and finding new ways to measure ROI. As a function and a discipline, finance can lead the charge to transform the conversation in organizations on sustainability from one of compliance, stakeholder pressure and costs to that of long-term sustainable growth, competitive advantage and preservation of our planet’s balance sheet – in addition to strengthening our own.

This article has been edited and condensed.