Deloitte's 17th Annual CFO Vision Conference Addresses CFOs' Role in Driving Innovation, Performance and Growth in their Organization

CFO poll identifies catalyst and strategist skillsets as requirements to bring discipline, improve the low rate of return on innovation investments

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Deloitte

Dec 16, 2013, 10:30 ET

NEW YORK, Dec. 16, 2013 /PRNewswire/ -- Findings from a poll of 100 large company Chief Financial Officers (CFOs) at Deloitte's 17^th Annual CFO Vision Conference, held November 20-22, revealed the need for CFOs to take a greater role in fostering discipline in their organizations' innovation process in order to achieve success.

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Of the CFOs attending the conference, 51 percent confirmed they are being asked by their Chief Executive Officers (CEOs) to play a key role in evaluating, financing and driving innovation in their companies. Of the remaining CFOs, 36 percent confirmed their CEO expects them to support and enable the execution of innovation decisions as companies continue to strive for bottom line growth in the current economic environment.

However, data from Deloitte's recent third quarter CFO Signals™ Survey confirms that most CFOs have only been involved in innovation at a peripheral level to date – providing analysis or having a voice in the discussion on their company's innovation program– rather than taking a more active, decisive role as a catalyst or strategist on innovation.

"Innovation is a key source of growth in this economic environment, but the reality is that much of the time, organizations fail to return the cost of capital on it," explained Sanford Cockrell III, global leader and U.S. national managing partner, CFO Program, Deloitte LLP. "CFOs have an opportunity to get more actively involved, injecting focus and discipline into the innovation process, managing the investment risk that innovation presents and evaluating innovation's success."

Most CFOs, attending the conference, (95 percent) said that their organizations' growth focus in 2014 will remain on current offerings and geographies for their business. Within this group, nearly half (45 percent) stated that their main focus will be on current offerings in current markets. An additional 26 percent will be focused on new offerings in their current geographies, and 24 percent on current offerings in new geographies. This bias toward known areas of focus is reflected in the 84 percent of CFOs who said that their organization's innovation program will be at least 60 percent focused on their core business lines.

"For many companies, focusing innovation on the core makes sense, but it would be a mistake to think this means just focusing on the product side," continued Cockrell. "It is important to look beyond pure product or service innovation. Driving innovation in the profit and pricing model, and supply chain and production are often overlooked, but all are areas that CFOs are adept at bringing insight to and boosting returns on innovation investment."

Additional findings from the Deloitte CFO Vision Conference included:

Top drivers of performance in 2014 and beyond. Excluding North American growth, CFOs identified industry-specific growth and company-specific innovation as the top two drivers of performance over the next few years, with 24 percent of CFOs identifying each of these drivers. Economic growth and recovery in emerging markets (19 percent) and Europe (13 percent) were identified as the next most important drivers.
Mixed view on international financial reporting. CFOs are split on whether to continue with the adoption of International Financial Reporting Standards, with 55 percent in favor of adoption and 41 percent against.
Healthcare reform will remove companies from the employee healthcare equation. Nearly half of CFOs (48 percent) believe that employer-sponsored healthcare will be replaced within the next ten years by public and private exchanges, and that employers will not play a role in arranging, paying and providing health insurance to their employees. In contrast, 32 percent disagreed with this view.
Few CFOs see tax reforms helping their company. Thirty-eight percent of CFOs believe that if tax reforms are enacted by Congress in 2014 it will hurt their company compared to 27 percent who believe it will help. For the remaining 35 percent, it is simply too soon to tell. In terms of Congress closing other loopholes beyond the current tax reforms, 40 percent identify potential international tax reforms as having the most impact.

About The Deloitte CFO Vision Conference 2013
Deloitte's 17^th annual CFO Vision Conference, titled Innovation. Performance. Growth. took place in Washington, D.C. on November 20-22, 2013. One hundred large company CFOs attended a program of plenary sessions, panel debates and workshops on key topics facing CFOs. These included growth through innovation, finance talent, investor relations, capital markets, the regulatory arena, cybersecurity, M&A, tax policy, healthcare and a special session on the global economic scene by former U.S. Secretary of the Treasury, Timothy Geithner.

About The Deloitte CFO Signals™ Survey
The Deloitte CFO Signals survey was conducted for the third quarter of 2013 between August 9, 2013 and August 23, 2013. Of the 124 CFO respondents 77 percent were from organizations with more than $1 billion in annual revenues, and 73 percent were from publicly-traded organizations.

Each quarter, CFO Signals tracks the thinking and actions of CFOs representing many of North America's largest and most influential organizations. This report summarizes CFOs' opinions in four areas: business environment, company priorities and expectations, finance priorities, and CFOs' personal priorities.

For more information about Deloitte's CFO Signals, or to participate in the survey, please contact: [email protected] .

About Deloitte's CFO Program
The CFO Program brings together a multidisciplinary team of Deloitte leaders and subject matter specialists to help CFOs stay ahead in the face of growing challenges and demands. The Program harnesses our organization's broad capabilities to deliver forward thinking and fresh insights for every stage of a CFO's career – helping CFOs manage the complexities of their roles, tackle their organization's most compelling challenges and adapt to strategic shifts in the market. For more information about Deloitte's CFO Program, please contact [email protected] or visit www.deloitte.com/us/thecfoprogram.

As used in this document, "Deloitte" means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

SOURCE Deloitte