The CFO

Report
Gartner answers to top
CFO challenges
4Q24
This edition’s top CFO challenges

1. 2. 3. 4.
How can I maximize How can I earn How can I deliver How can I secure
my limited time with investor support for value on current employee buy-in
the CEO and align our cost optimization investments and plan for changes to the
our priorities? strategy? for the success of finance function?
future investments?

Follow Us on LinkedIn Sign Up for Our Newsletter Become a Client The CFO Report 2
Pulled in competing directions, CFOs must drive alignment
In the final months of 2024, CFOs continue to find themselves pulled in many
competing directions, fueled by unique sources of disruption and change. How CFOs Can Drive Alignment With 3 Key
For example: Stakeholder Groups

1 CFOs
 are trying to support technology-driven innovation while making
sure spending on that technology doesn’t run unchecked. CEO
2 CFOs have ambitious plans for the rest of 2024 but must be realistic Spend your limited
 one-on-one time
about the economic headwinds (e.g., stubbornly higher costs,
clarifying areas of
constrained access to capital) that threaten to restrict performance. misalignment.
In this complex environment, CFOs find it increasingly important, and
increasingly difficult, to maintain alignment with critical stakeholder groups.
Use this latest edition of The CFO Report to avoid stakeholder misalignment
by applying strategies tailored to the unique needs of your audience. CFO Business
Investors
unit leaders
Be transparent Develop a shared
about your cost understanding of
optimization plans. value drivers through
continuous learning.

Source: Gartner

Follow Us on LinkedIn Sign Up for Our Newsletter Become a Client The CFO Report 3
CFO CHALLENGE

How can I maximize my limited time

with the CEO and align our priorities?
Three of the top attributes that drive CFO personal
effectiveness are a strong CEO relationship, CFO Personal Effectiveness
Leadership Im
partnership with the CEO on company strategy
le and pac
and the ability to influence the CEO on major Ro t
issues. Maintaining strategic alignment with the
CEO requires CFOs to work in a way that may feel Ev
ize Le olv
counterintuitive — focusing their conversations with m ship ad
the CEO on areas of misalignment, not alignment. r end Be e

e hip
Le pti
Sp

th
Tim de
O

rs
e
a

nc
But clarifying potential misunderstandings

h
that could cause problems later is a smart way
to use their limited time together. Going over World-Class
points of commonality may make for smoother CFO

I n ve s m m
conversations, but risks papering over the issues

Ele r &
most likely to cause friction.

e
Co

va S
to

na e
nc
c
Bo

te

en
t a
n i a ke r d , lu
Inf nd

Fi
ca

u
h ol
tio d yo
ns er Be

E n te
r p ris e I m p a c t
Source: Gartner

Follow Us on LinkedIn Sign Up for Our Newsletter Become a Client The CFO Report 4
GARTNER ANSWER

Dig into areas of misalignment to maintain strategic

collaboration and make progress on key priorities
As a starting point for these conversations, CFOs
should understand where misalignment exists in CFOs’ and CEOs’ Top Strategic Business Priorities for 2024-2025
key business priorities. Use the figure on the right Summary top three mentions, coded responses — showing top 10
to gain insight into how CFOs’ and CEOs’ typical
perspectives currently differ, based on a survey Change from 2023 CFO responses CEO responses Change from 2023

of the two groups.

p 5% 65% Growth 62% p 38%
To facilitate conversations on these strategic p 3% 37% Technology 32% q 3%
business priorities — and other areas of
p 44% 33% Workforce 26% q 29%
misalignment — CFOs can use a communication
style matrix to diagnose your CEO’s style, keeping p 7% 25% 23% p 19%

Financial

in mind that one’s individual style could represent q 46% 22% Corporate 23% q 15%
a mix of the four standard styles (amiable, Cost
p 33% 21% 15% p 6%
expressive, analytic, driver). Then CFOs can management

tailor their communications accordingly. p 3% 9% Customer 11% p 38%

Efficiency and
p 3% 9% productivity 7% p 16%
Environmental
p 17% 6% sustainability
11% q 13%

q 51% 6% Products and 10% q 19%

services
70% 35% 0% 0% 35% 70%
n = 81 CFOs; 282 CEOs
Q: Please tell us about your organization’s top 5 strategic business priorities for the next 2 years (2024/2025).
Source: 2024 Gartner CEO and Senior Business Executive Survey

Follow Us on LinkedIn Sign Up for Our Newsletter Become a Client The CFO Report 5
Take action with Gartner support

Learn more about where Evaluate how the time Schedule a call with Use Gartner’s Quick
CFOs’ and CEOs’ priorities is being spent and a Gartner expert to Answer: How CFOs
align and differ with the identify what is missing in learn more about the Can Maximize One-on-
CFO Perspective on the interactions with your CEO implications of key One Time With the CEO
2024 CEO Survey. to determine what you’d priorities, like the shift to master this critical
like to incorporate into in focus toward AI, or to exchange and achieve
future interactions. discuss the best ways to both individual and
tackle difficult subjects organizational goals.
with your CEO.

Marcus Marion
Senior Director
Analyst

Follow Us on LinkedIn Sign Up for Our Newsletter Become a Client The CFO Report 6
CFO CHALLENGE

How can I earn investor support for our

cost optimization strategy?
Many organizations are optimizing costs in
response to today’s high-uncertainty environment. Limited Stock Price Appreciation a Week After Cost-Cutting Announcement
But a Gartner analysis of stock price movements
Average stock price movement for companies implementing cost-cutting measures (seven days)
of companies that announced cost cuts between
2021 and 2023 shows that most industry sectors
Utilities -0.36%
saw only minimal stock price appreciation a week
after these announcements. Real estate -1.08%

Materials 3.57%
These limited gains suggest a level of skepticism
among investors and indicate that cost-cutting Information technology 2.78%
actions alone won’t guarantee positive investor Industrials -2.07%
perceptions. Therefore, CFOs must do more to
Healthcare 2.35%
reassure investors their organization is poised
for success. Financials 2.31%

Energy 0.25%

Consumer staples 2.00%

Consumer discretionary 0.67%

Communication services 0.52%

-4.00% 0.00% 4.00%

n = 1,195 companies
Source: Capital IQ Database and Gartner analysis of earnings calls from Alphasense 2021 to mid-2023

Follow Us on LinkedIn Sign Up for Our Newsletter Become a Client The CFO Report 7
GARTNER ANSWER

Be transparent in earnings calls to foster investor trust

and encourage alignment
According to a Gartner review of how profitable companies communicate 3. R
 eveal how investments they flagged in previous earnings calls paid off.
their cost optimization efforts to investors, successful companies are upfront These companies close the loop with investors by following up on how
about the challenges and the rewards of cost optimization and employ three plans they’d previously disclosed worked out. Doing so established a strong
transparency tactics: track record of generating returns from their spending — a tactic that’s
especially effective when showcasing that a calculated risk led to profits.
1. C
 andidly share their understanding of cost drivers. Demonstrating this
understanding to investors, and then linking their cost optimization efforts
to those specific drivers, convey that they have a handle on what drives
costs and have a viable plan for dealing with it.

2. H
 ighlight the actions they’re taking to protect differentiating costs.
These costs can’t be easily replicated by competitors, which means
they’re meaningful drivers of differentiation. By communicating their
investments in these costs, the companies show investors they’re well-
positioned to compete (and, ultimately, to create long-term value).
Emphasizing these details will likely encourage continued strategic buy-in
from investors.

Follow Us on LinkedIn Sign Up for Our Newsletter Become a Client The CFO Report 8
Take action with Gartner support

Talk to a Gartner Work with your head Learn how other Visit Gartner’s
Executive Partner — a of investor relations to organizations are reducing Cost Management
former CFO who supports incorporate this messaging costs, and how investors Resource Center to
client priorities — to talk into your next earnings call. are reacting, with 4 CFO understand strategic
through the best way Lessons From Recent cost management best
to craft a credible story Cost-Cutting Efforts. practices for CFOs.
or to learn more about
differentiating costs.

Judy Roman
Executive Partner

Follow Us on LinkedIn Sign Up for Our Newsletter Become a Client The CFO Report 9
CFO CHALLENGE

How can I secure employee buy-in for

changes to the finance function?
To maintain strategic alignment, CFOs and business
unit leaders must create a shared understanding Lookbacks as Part of a “Learning Loop”
of what drives value for the organization, especially
as today’s organizations pursue more fundamental
shifts in their business and operating models.
Investment lookbacks New
This shared understanding of value drivers should harvest insight from opportunity
encompass a broad definition of “value.” For previous projects to evaluation
instance, value could mean achieving particular inform the next round
project goals, but if that’s not possible, value could of investing decisions.
also mean lessons learned at the conclusion of
underperforming projects.
Lookback Funding and
As conditions change, CFOs should use continuous and lessons resource
learning to refine this shared understanding learned mobilization
throughout the investment process (not only during
project execution but continuing after projects
have ended). Intentionally positioning this work as
learning-focused helps minimize any fear among
business unit leaders whose investments may not Tracking and
performance
have met initial expectations, ultimately fostering
management
more honest investment review discussions.
Source: Gartner

Follow Us on LinkedIn Sign Up for Our Newsletter Become a Client The CFO Report 10
GARTNER ANSWER

Maintain alignment with business unit leaders to

share project learnings and adjust accordingly
For in-flight projects, CFOs can build in regular opportunities to touch • C
 ontrollable factors, which business unit leaders should actively work to
base with business unit leaders, agree on what they’ve learned and modify remedy for future projects (e.g., pricing variances that undercut profitability
their plans accordingly. CFOs can use what they’re learning from in-flight outcomes). An example lesson learned could be to set up better monitoring
projects to maintain alignment with business unit leaders by checking that mechanisms that can detect variances in real time.
their planned allocation of resources is still their best bet to support the
organization’s objectives. One way to do this is by establishing an executive • Uncontrollable factors, which the enterprise doesn’t expect business
portfolio review committee to evaluate investments on a regular basis. unit leaders to individually address (e.g., lower-than-anticipated economic
CFOs should work with other committee members to realign resources growth). An example lesson learned could be that finance should focus
where necessary (e.g., when investments are no longer aligned to the on obtaining better data and developing more effective leading indicators
organization’s strategy, are not performing as expected or are being shifted so it can create better initial forecasts.
to a different timeline).
CFOs must continue the learning process after projects have completed.
They need to ensure postproject meetings lead to concrete change rather
than devolve into backward-looking discussions that focus on enforcing
accountability for underperformance. As CFOs focus these discussions
on lessons learned, they should establish alignment in two categories:

Follow Us on LinkedIn Sign Up for Our Newsletter Become a Client 11

Take action with Gartner support

To learn more about Schedule a call with a Explore how to learn from Start listing the functional
prioritizing investments, Gartner expert to learn in-flight projects and leaders and business
both before they launch more about setting up modify the organization’s leaders you would
and while they’re in living project charters expectations with convene for investment
progress, see How or an executive portfolio Case Study: Increase lookbacks.
CFOs Should Improve review committee, as Accountability for Digital
Investment Prioritization. well as creating an agenda Spending Through
for an effective investment Learning-Informed
lookback. Project Charters.

Dennis Gannon
VP Analyst

Follow Us on LinkedIn Sign Up for Our Newsletter Become a Client The CFO Report 12
CFO CHALLENGE

How can I make sure my leadership team can get

employees on board with changes to the finance function?
As finance transforms into a more digitally enabled
organization, the CFO’s leadership team must Gap Between Finance’s Vision and Employee Actions
ensure its employees align with the function’s
technology strategy; however, nearly half of
employees report that change resistance is
a barrier to achieving transformation success Define vision Explain the why
Employees miss
and organizational goals. Redefine how finance Communicate why the the “what” and
should operate to change is necessary “how” for them.
CFOs and finance transformation leaders become more digital. and important.
are thinking differently about organizational
structures, roles, activity locations and the
people-technology balance across all finance
Reasons why employees struggle to enact the vision:
functions. The finance strategy must unlock
value from technology as well as talent by
recognizing the unique value proposition each
component brings to the operating model.

Lack of clarity Low relevance Low agency

“What behaviors do “How does it relate to “How can I contribute to
I need to change?” my day-to-day work?” driving the change?”

Source: Gartner

Follow Us on LinkedIn Sign Up for Our Newsletter Become a Client The CFO Report 13
GARTNER ANSWER

Ensure your employees are aligned with your function’s

technology strategy to reduce change resistance
CFOs can help senior finance leaders build alignment within their teams by • T
 alk to your controller about building alignment with their technology goals
considering the following actions: for the function by reducing employees’ resistance to new technology.
Recommend that they limit the spread of negative reactions while harnessing
• F
 ast-track buy-in during the finance transformation planning stage by
social influence to drive acceptance.
assessing how your transformation program will affect key leaders and
employee groups before crafting a transformation narrative that addresses • M
 ake sure your finance transformation leader connects the new vision for
their main concerns. finance to employees’ workflows to help them better understand how the
change will affect them.
• H
 elp your FP&A teams understand how they can align their staff to their
generative AI objectives. Solutions include customizing their engagement
strategy to different groups of employees based on their experience with,

and acceptance of, the technology.

Follow Us on LinkedIn Sign Up for Our Newsletter Become a Client The CFO Report 14
Take action with Gartner support

Use forthcoming CFO Schedule a call with a Use the 2024 Finance Learn more about reducing
and finance leadership Gartner expert to create Technology Bullseye to change resistance
team meetings to evaluate a purposeful technology validate your technology among finance teams
your current change roadmap that includes well- investment decisions by exploring Always-on
management approach defined opportunities and against take-aways from Change Management
to align on opportunities implementation timelines 350 peers. for a Successful Finance
to develop a more that set the finance function Transformation.
stakeholder-centric change up to drive efficiency and
management strategy. effective decision making.

Marco D’Ascoli
Director Analyst

Follow Us on LinkedIn Sign Up for Our Newsletter Become a Client The CFO Report 15
Actionable, objective insight
Position your organization for success. Explore these additional
complimentary resources and tools for finance leaders:

Research Webinar How We Help Webinar

3 Steps to Improve 3 Change Management Gartner for Finance Leaders Join an Expert Deep Dive
Corporate Investment Principles to Supercharge Your Discover how we can help you achieve Explore upcoming and on-demand
Prioritization Finance Transformation your mission-critical priorities. CFO/finance events hosted by
Gartner analysts.
Learn three steps to improve Accelerate your transformation with
investment prioritization outcomes iterative finance change management.
at your organization.

Download Now Watch Now Learn More Watch Now

Already a client?
Get access to even more resources in your client portal. Log In

Follow Us on LinkedIn Sign Up for Our Newsletter Become a Client The CFO Report 16
Connect With Us
Get actionable, objective insight that drives smarter decisions and
stronger performance on your mission-critical priorities. Contact us
to become a client:
U.S.: 1 855 811 7593
International: +44 (0) 3330 607 044

Become a Client

Learn more about Gartner for Finance Leaders

gartner.com/en/finance

Stay connected to the latest insight

Attend a Gartner conference
View Conference
© 2024 Gartner, Inc. and/or its affiliates. All rights reserved. CM_GBS_3185999