As the CFO role continues to evolve in range and significance, many finance chiefs are morphing their title to represent their broader roles. Kelley Kronenberg’s Heath Eskalyo is one example.
Formerly CFO of the Fort Lauderdale, Florida, law firm, Eskalyo is now principal partner and chief performance officer. He spoke with The Modern CFO about the evolving role of the CFO, what it takes to make the transition to CPO and what it does for you and your organization.
Why are more CFOs transitioning to the role of chief performance officer?
CFOs are transitioning to the role of chief performance officer in response to the increasing complexity and sophistication of businesses and the availability of real-time predictive data in the digital world. The need for real-time decision-making to drive business performance has become critical, and the CPO role allows finance professionals to take on a more strategic role in driving business performance and strategic outcomes.
What does the CPO role consist of?
The CPO plays a crucial role in developing and orchestrating the business’ development strategy to drive operational excellence and optimize business performance. This involves identifying and pursuing new business opportunities, including partnerships and acquisitions, while aligning the firm’s financial and operational strategies to ensure that budgeting processes are closely linked to the company’s objectives.
The CPO establishes clear metrics and accountability measures, implements incentive structures that align individual and team goals with firmwide objectives, and fosters a culture of continuous learning and development to drive a performance-oriented culture.
To facilitate growth, the CPO develops and facilitates tracking and measurement systems, orchestrates verification processes to ensure the integrity, completeness and reliability of data, provides predictive reporting relative to revenue, manages internal productivity and assesses organizational performance against set targets, ensures capital availability and allocation, and facilitates processes designed to overcome any challenges impacting the business’s long-term capabilities.
Additionally, the CPO drives efficiency and productivity initiatives, including budgeting models and business intelligence, by fostering harmonized key performance, indicators and conducting ongoing assessments to identify where operational adjustments are needed, ultimately ensuring the identification and prioritization of long-term value creation and sustainable growth.
How does it differ from the CFO role?
The CPO role goes beyond the traditional responsibilities of the CFO. While the CFO primarily focuses on financial management and reporting, the CPO adopts a more comprehensive approach, leveraging a broad range of skills to drive overall business performance and achieve strategic objectives.
The CPO integrates and analyzes both financial and non-financial data from various sources across the organization, combining traditional financial metrics with operational, client and market insights to gain a holistic understanding of the company’s performance drivers.
The CPO plays a crucial role in value creation by identifying opportunities for growth, efficiency and innovation. By collaborating with other executive leaders, the CPO helps align financial strategies with the overall business strategy, ensuring effective resource allocation to support long-term success. This strategic focus includes initiatives such as process optimization, digital transformation and talent development.
How do CFOs make the transition?
CFOs transitioning into the role of CPO must develop a comprehensive understanding of the business, strong interpersonal skills and keen analytical abilities. Fostering cross-functional collaboration and aligning financial and operational strategies are crucial aspects of the CFO-to-CPO transition.
Building strong relationships with leaders across departments and facilitating regular meetings can help align goals and resources. CFOs must also ensure that financial planning and budgeting processes are closely linked to operational objectives, prioritizing long-term value creation and sustainable growth.
Effective communication with stakeholders and driving a performance-oriented culture are essential for success in the CPO role. CFOs must develop compelling narratives to articulate the company’s evolution, provide regular updates to key stakeholders, and offer strategic guidance to the leadership team. By establishing clear performance metrics, implementing incentive structures, and fostering a culture of continuous learning and development, CFOs can motivate employees and lead their organizations to new heights of success.
How do CFOs figure out if the CPO role would suit them?
By honestly assessing their skills and interests. Beyond the financial skills required by CFOs, the CPO role requires business understanding, analytical acumen and the ability to communicate and engage with stakeholders at all levels.
CFOs who enjoy providing strategic insights and advice, integrating data from various sources, and driving business performance and strategic outcomes may find the CPO role a good fit.
Any additional thoughts for CFOs to consider?
Embrace technology and digital transformation. CFOs should proactively adopt new technologies and drive digital transformation initiatives within their organizations. By leveraging data analytics, artificial intelligence and automation, CFOs can enhance decision-making, improve efficiency and create value for their companies.
Foster a culture of continuous improvement. As the business environment evolves, CFOs must prioritize continuous learning and development for themselves and their teams. Encourage participation in professional development programs, workshops, and conferences to stay up to date with industry trends and best practices.
Collaboration is critical. To become effective strategic advisors, CFOs must break down silos and collaborate with other departments, such as marketing, sales and operations. By fostering cross-functional partnerships, CFOs can gain a holistic understanding of the business and contribute to developing integrated strategies.
By considering these additional factors, CFOs can augment their ability to drive strategic outcomes and create greater value for their organizations.
