Closing Keynote- CFO@2020

What new dimensions, roles and responsibilities should the CFO be preparing for? A look at CFO 6.0.

V S Parthasarathy
 
In the current fluid scenario, forecasting the shape of things  to come could very well be an exercise in futility. Ninety per cent of the CFOs polled in a survey viewed better analysis and reporting as their top priority in 2017. Business budgeting and forecasting and agility and supporting decision-making were other top concerns. Uncertainty and volatility are not new turf for the CFO. What is new is the speed of change and the changing nature of challenges. Would the role of CFO undergo a drastic makeover in the near future?
 
VS Parthasarathy, Group CFO & Group CIO and Member of Group Executive Board, Mahindra and Mahin­dra, while delivering the closing key­note on CFO@2020, recalled an earlier global finance meet at Dr. Reddy’s back in 2015. The talk then spanned the journey of a CFO from being an accounting manager, with compli­ance to risk as his major mandate, to becoming a three-star business partner and finally evolving into a five-star CFO, who is the value creator. 
 
Coming to the present day, Parthasarthy threw a series of questions at the eminent CFO gathering at the Conclave: “I’m standing before you today and asking: Has something changed two years later? Is the CFO of today still the five-star CFO or has s/he grown into CFO 6.0?” 
 
But what is the CFO 6.0 avatar like?
“There are a plethora of challenges facing us,” said Parthasarthy. Illus­trating his point with the example of the auto sector, he  said: “Is it going to be captured by the sharing economy market? Is it going to be captured by changes in technol­ogy?” Pointing to the uncertainty of forecasting anything today, he added, “We don’t know what’s going to happen. Everyone tells me to stop making fossil fuel cars and only make EVs from tomorrow. What will happen if we do so? Fossil fuel cars will become history and the market will not be served.” Apparently, the answer is not to stop doing what we have been doing. Rather, “you have to do current things as well as change to new things, ” he added.
 
Undeniably, there are multiple para­doxes facing the markets, businesses and the C-suite. But the answer does not lie in bringing about drastic systemic changes. As Parthasarthy explained: “The key thing about paradoxes is not to choose between them. In the new frame of paradoxes, you have to imbibe them and be able to play both the sides of the paradox in order to win.” Explaining his point again with the paradox facing the auto industry, he added: “You have got to produce fossil fuel cars as well as invest in technology. You’ve got to produce the traditional vol­ume, even as you launch a new startup on electric vehicles or an e-commerce or any other new-age businesses. This is absolutely the future.”
 
Introducing the concept of fragile, robust, and antifragile, Parthasarathy said: “The most fragile person is some­body sitting under Damocles’ sword. He’s at a feast but can he be peaceful? Can he think about his food or will he be thinking about the sword which is hang­ing over his head? Therefore, s/he is the Fawning/Feigning’ Damocles.”
 
What is robust then? It is the Phoe­nix because it has the ability to rise from the ashes. “It is able to recreate itself, so that’s robust,” he explained. But Parthasarthy questions the sus­tainability of this robustness and proceeds to explain the concept of anti­fragile. “It’s the mythical Hydra,” he says. What is unique about the Hydra that makes it antifragile? “You cut one head and two spring in its place,” answers Parthasarthy.
 
The CFO@2020 has to be like the mythical Hydra? But how? Par­thasarthy explains: “When you talk of something in the future which has no resemblance to the past, you need to go to find something only in the future.” Taking up the example of Dashavatar from Indian mythology, he questions: “What lessons can we draw from the Dashavatar?” The 10th ava­tar is supposed to be the Kalki avatar. “In my view, Kalki is not going to be determined by somebody else but all of you sitting in this room,” says Par­thasarthy, adding, “The CFO of 2020 will be the Kalki avatar of yours based on everything that you saw just now. So that’s the CFO 6.0 for me.”
 
Explaining further, he says: “Though this is a context for leadership, there are some things only CFOs can do  – governance, ability to think in a broader manner and point problems before they come.” While the CFO can take noth­ing away from the importance and the responsibility of a CEO, but “we can take nothing away from our key responsibili­ties either,” he adds. Concluding his gripping session, Parthasarthy succinctly says: “Leadership is all about not asking ‘Why Me’? It’s about saying, ‘Try Me’.” 
 
About the author:
V S Parthasarathy is Group CFO & Group CIO and Member of Group Executive Board, Mahindra & Mahindra.

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