Chief Financial Officers Transforming into Strategy and Operations Leaders, Finds New Book by Booz Allen Hamilton.

NEW YORK -- Interviews with leading CFOs reveal heightened responsibilities and pressures: from "bean counter" to managing the growth agenda

With Sarbanes-Oxley at their backs and growth on their horizons, leading chief financial officers are transforming their roles... and their companies. A new book, commissioned by management consulting firm Booz Allen Hamilton and published by strategy+business Books, shines a bright light on the evolving CFO and shatters the outdated "bean counter" stereotype. Today's CFO is a business partner with the CEO, closely involved in designing and overseeing strategy, operations, and performance.

"CFO Thought Leaders: Advancing the Frontiers of Finance," edited by Rob Norton, with an introduction by Vinay Couto, Irmgard Heinz, and Mark J. Moran, contains candid and revealing interviews with 17 CFOs of leading global corporations, including Pfizer, FedEx Express, Johnson & Johnson, BASF, Procter & Gamble, Deutsche Telekom, and 11 other U.S. and European companies. The result is a groundbreaking, cross-industry study of the evolution of the CFO role.

Few business roles have changed as dramatically during the last generation as that of the chief financial officer. The classic model -- the CFO as chief accountant and technical expert focused narrowly on the firm's financial statements and capital structure -- has been passe for a decade or more. Leading CFOs have become active, innovative, and independent transformation agents.

"When most people think about a chief financial officer, they're still thinking about your father's CFO--an accounting role, maybe expanded to tax and treasury," says David L. Shedlarz, the chief financial officer of Pfizer, Inc. "When you take a look at a CFO's responsibility today, you also have operations planning and analysis, information technology, strategic planning, and M&A. As a member of the senior management team, you have to be able to take off your technical hat when you walk in the room."

Certainly, the CFO position has grown more pressured in recent years. Well more than 10 percent of Fortune 500 CFOs have left their jobs during each of the past two years, according to the executive search firm Spencer Stuart. In a 2004 survey conducted by CFO magazine, fully 68 percent of finance executives said they were experiencing more job pressure during the past two years than before. Sixty-three percent said job stress had negatively affected their health.

One source of the heightened pressures on the CFO is the elimination of the chief operating officer position by many firms. A study of 300 publicly traded U.S. companies, published by the National Bureau of Economic Research, found that 20 percent abolished the COO position between 1986 and 1999. Many of the COO's managerial duties are being reassigned to the CFO, resulting in increased staff - and even line - responsibilities.

The book's in-depth interviews with CFOs highlighted eight trends that underscore how profound the evolution has been:

--CFOs are more closely engaged than ever in designing, adapting, and implementing their organizations' business models. "I am involved in all important operational and strategic group planning," said Dr. Karl-Gerhard Eick, who is both CFO and deputy CEO of Deutsche Telekom, the German telecommunications company.

--With capital markets now as global as companies, CFOs increasingly take lead roles in tying their firms' business strategies more closely to models of shareholder value. "We have had to spread this culture of how to create value, how to get the best return on assets, throughout the company," said Renault CFO Thierry Moulonguet.

--To ensure strategic alignment, finance chiefs find themselves serving additionally as "chief metrics officers." "Measurement drives behavior, and we need to know that we're getting the behavior that we want and that people are focusing on the right things," said Robert L. Lumpkins, CFO of the food and agriculture giant Cargill.

--Chief financial officers say their role includes more and more performance management, as they work toward the goal of securing what Robert J. Dellinger, CFO of the telecommunications company Sprint, calls the "execution premium" accorded by shareholders to top performers.

--CFOs increasingly are taking line management responsibility in operating businesses. For example, in addition to overseeing the finance organization, Caterpillar group president Douglas Oberhelman oversees the Peoria, Illinois, manufacturer's diesel engine business.

--The ability to communicate to various internal and external constituencies is now a critical competency for chief financial officers. The CFO "should be half accountant and half strategist and, to an increasing degree, an efficient communicator in both roles," said Dr. Siegfried Luther, finance chief at Bertelsmann AG, the German media firm.

--CFOs are consumed with creating finance organizations stocked with men and women proficient in nontraditional skills, including experience in operations, in addition to traditional finance experience and acumen. "I encourage people within finance to leave the division and work elsewhere in the company," said Cathy Ross, CFO of FedEx Express, the largest division of Memphis-based FedEx Corporation. "It helps the company, and it broadens the individual."

--With senior managers and boards of directors taking a more expansive view of risk, CFOs are overseeing the increasingly tight linkage of risk management to the firm's strategic agenda. "A more appropriate notion of value creation -- post-9/11, post-Enron, post-WorldCom, post-Tyco, and so on -- starts with the realization that risk matters as much as return does," said Thomas A. Fanning, the CFO of Southern Company, the U.S.'s second-largest electric utility by market capitalization.

CFO Thought Leaders: Advancing the Frontiers of Finance may be ordered online at www.strategy-business.com.

About Booz Allen Hamilton

Booz Allen Hamilton has been at the forefront of management consulting for businesses and governments for 90 years. Booz Allen, a global strategy and technology consulting firm, works with clients to deliver results that endure.

With more than 16,000 employees on six continents, the firm generates annual sales of $3 billion. Booz Allen provides services in strategy, organization, operations, systems, and technology to the world's leading corporations, government and other public agencies, emerging growth companies, and institutions.

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