As CFOs move into the middle of their tenures, they must become prime movers of change. Expanding their focus beyond finance is a key priority for midtenure CFOs, and to raise performance overall, an organization must broaden its lens but also focus it based on the company’s life cycle and financial position, note senior partner John Kelleher and colleagues. A McKinsey CFO survey found that 55 percent of respondents expect their organization to home in on business building, which is considered an offensive move, while the top defensive tactic was changing the capital structure.
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A bar graph shows the strategic actions that CFOs expect their organizations to undertake in the next 12 months, divided into defensive and offensive actions, with a 3rd category combining defensive/offensive actions, presented as a percentage of respondents. The top action overall, at 55% of respondents, is the offensive action of business building (eg, creating new products, services, or businesses requiring new capabilities). The top defensive action, at 47% of respondents, is changing the capital structure (eg, altering the debt–equity mix). Other offensive actions are M&A at 38% of respondents, joint ventures/alliances at 34%, and corporate venture capital activities at 24%. The only other defensive action is divestitures and carve-outs at 12% of respondents. Actions under the combined offensive/defensive category are restructuring the shape of the organization at 50% of respondents, transformation of the entire enterprise at 45%, and significant reallocation of resources across the business at 23%.
Source: McKinsey Global Survey on the CFO’s role, 298 participants, May 9–19, 2023
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To read the article, see "Faster, smarter, bolder: How midtenure CFOs shift into a higher gear," May 1, 2024.