CFOs prioritize corporate action and embrace AI, while CEOs lean towards growth and inflation management.
The latest survey by Gartner has provided valuable insights into the strategic priorities of Chief Financial Officers (CFOs) and their counterparts, Chief Executive Officers (CEOs). While both roles share growth as their top priority, the survey revealed some differences in their emphases. Corporate action, such as mergers and acquisitions (M&A) and restructuring, emerged as a significant focus for CFOs, with 41% ranking it as their second top priority. In contrast, only 27% of CEOs shared this perspective, indicating a stronger inclination toward growth initiatives.
Another noteworthy finding was the increasing interest in Artificial Intelligence (AI) adoption among CFOs. Despite 80% of finance functions adopting AI within the past two years, 62% of CFOs recognized AI as the technology most likely to impact their industry in the next three years significantly. This suggests a growing awareness of the potential benefits of AI, even among CFOs who might have yet to have direct experience with the technology in their roles.
CEOs stay committed to growth and seek diverse inflation management strategies
While growth remains a top strategic priority for CFOs and CEOs, the survey indicated that CEOs continue to prioritize it highly, with 45% ranking it within their top three strategic focus areas. Although this represents a slight decrease from 2022 (53%), it underscores the unwavering commitment of CEOs towards driving growth and expansion.
Inflation management emerged as another key area of concern for both CFOs and CEOs, with 84% and 68% respectively, ranking it among the top three most damaging factors affecting their businesses. In response to inflationary pressures, a notable shift in CFOs' strategies was observed. Traditionally, raising prices had been the go-to tactic, but the survey revealed a change in CFOs' mindset, with only 11% choosing price increases as a top response, compared to the previous year.
Instead, CFOs are now exploring alternative approaches, with a greater focus on cost optimization (35%) and other strategies to cope with inflation's impact on their organizations. This shift reflects a growing realization that customers are becoming more price-sensitive, making it harder to pass on price increases effectively.
The Gartner survey has provided valuable insights into the evolving priorities of CFOs and CEOs. While both roles agree on the importance of growth, they differ slightly in their emphasis on corporate action and inflation management. Additionally, the increasing interest in AI adoption signals a paradigm shift in how finance functions view technology and its potential impact on their industries. As organizations navigate the business landscape of 2023 and beyond, striking the right balance between growth initiatives, AI integration, and inflation management will be crucial for sustained success and resilience.