'Creating Value as a CFO', by Jitesh Sodha, member of RCK’s Innovation Advisory Council

The CFO’s role has evolved beyond recognition, shifting from reporting financial performance to playing a leading role in driving long-term value creation. I began my career in finance, the CFO was often looking at the past and seen primarily as the custodian of the numbers, who was responsible for reporting, audit and tax. All of that still matters but today's CFO is increasingly expected to play a central role in creating value for the business.  

The CFO of today is expected to help shape strategy, drive performance, challenge investment decisions, influence technology adoption, manage stakeholders and act as a trusted strategic partner to the CEO. In many businesses the CFO is now one of the most important voices in determining where capital is allocated, how risk is managed and how long-term value is created.

I have been a CFO for nearly 30 years across five companies,including a start-up, a business that completed an IPO, founder-owned businesses, private equity-backed companies and listed FTSE 250 businesses. Most recently, I was CFO of Spire Healthcare, where I led a transformation in financial and operational performance, supported acquisitions and disposals, navigated the business through the pandemic period working with the NHS, and helped improve the balance sheet. I stepped down to build a portfolio career. Over the years I have seen a few versions of the CFO role. I have also seen the job from different angles: public markets, private ownership, investors, operational pressure, crisis management, growth and succession planning. And if there is one thing I have learned, it is that the CFO creates value not by reporting what has happened, but by helping the business make decisions that drive what happens next.  

Finance should not only report value, it has to help create it

As an accountant, I'm trained to understand success through numbers and metrics. This could look like more cash in the bank, stronger EBITDA, a better leverage ratio, improved margins, revenue or market share. All of these are important. But the real question for the CFO is not simply: What did the business earn this month or this quarter? The better question is: What makes the business become more valuable?

Often, in private businesses, that conversation happens close to exit, when it is almost too late. Finance teams are suddenly asked to produce the insight, the historical data and the narrative that explains why the business deserves its valuation. At this stage, people are scrambling and the narrative is formed retrospectively.  

Value creation should be a live conversation inside the business every week, every month and at every board meeting. It should shape how the company thinks about every decision. The CFO is uniquely placed to lead that conversation because finance sees more of the business than almost anyone else. Finance sees what is working and what is not and CFOs often see this before the person working on something does themselves. This gives the CFO enormous influence, but also enormous responsibility.

The CFO as the CEO’s right hand and a focus on EBITDA  

I have always seen the CFO as the right hand to the CEO. It means helping the CEO succeed by making sure the business has the information, risk appetite, and financial clarity needed to make good decisions. Most CEOs, shareholders and investors naturally focus on growth, but the CFO has to balance ambition with reality.

EBITDA is useful, but I call it “the good number before the bad stuff”. It does not tell you everything. It does not tell you whether cash is being collected. It does not tell you whether working capital is being managed well. It does not tell you whether the business can withstand a shock. It does not always tell you whether growth is actually leading to value creation. Ultimately, the company will be valued on future cashflows, not on future EBITDA.

Technology has made the CFO role more complex

One of the biggest changes in the CFO role is the growing importance of technology and finance's growing ownership over technology projects. CFOs are increasingly involved in decisions around AI, automation, digital transformation, cybersecurity, data systems and innovation. These decisions often require finance leaders to assess complicated technologies, even when they do not come from technology-related backgrounds.  

The CFO does not need to be the CTO, but they do need to understand the commercial case for technology and ask the right questions. Some possible questions to ask during these conversations:  

• What problem are we solving?
• What value will this create?
• What data are we relying on?
• What is the implementation risk and the risk of delaying implementation? 
• What is the payback? And how confident are we that it will be realised?
• How will this change the way people work, and will people use this? 

The CFO’s role is to bring discipline to those decisions without becoming the person who says no to everything.

Used well, technology can transform operations and decision-making, as businesses that once relied on monthly reporting cycles can now access more information quickly, enabling faster and more informed decision-making.  

In a recent CFO Playbook discussion, I reflected on how real-time data has changed the rhythm of finance leadership, allowing businesses to move with far greater agility than was possible in the past. However, better data only creates value if it leads to better decisions, and the decisions are only as good as the quality of the data that has been input.  

The first lever of value creation: people

When people ask me what creates value, they often expect a technical answer. My first answer is people.

By the time someone becomes a CFO, they are technically strong, with qualifications and experience to fulfil the responsibilities of the role. However, the complexity of relationships and how to manage these often cannot be taught.  

As CFO, you are dealing with your finance team, the CEO, the executive team, the board, NEDs, chairs, shareholders, private equity investors, auditors, tax advisers, communications teams, banks, analysts and on occasion, the media. Each of these stakeholders often has conflicting priorities, different pressures and different definitions of success and different personalities.  

The CFO role can also be lonely and is full on, with no shortcuts. You carry the pressure home with you. You wake up in the night thinking about work. You check emails on holiday. You are expected to be calm when others are not. People often talk about the good parts of being a CFO: the status, the pay, the profile, and the influence. Those are real, but on the flipside of this, there is also a lot of difficult stuff. There is pressure, uncertainty and luck, both good and bad. To ride this wave, relationships matter so much.  

The best CFOs do not sit outside the business but instead, they help people succeed. They understand what the CEO is trying to achieve. They understand what sales, operations, HR, marketing, IT and technical teams are trying to do and work with each of these teams to support them in this. Most people do not come to work wanting to do a bad job. If you take the time to understand what matters to them, and use finance to help them succeed, you build trust and, over time, that leads to influence.  

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The second lever of value creation: cash

My second answer is cash. Cash is sometimes less glamorous than revenue growth, market share or EBITDA, but often this is where the CFO can create enormous value.

A company’s ultimate value is driven by cash. Cash gives a business options and resilience. It allows a business to invest, acquire, withstand shocks, attract capital and make decisions from a position of strength.  

It is also the thing that can hurt you, even when the business appears profitable. Companies often fail due to poor cash management rather than a lack of profitability.  Working capital, tax, debt structure, capital allocation and cash conversion can create huge value. In some cases, managing cash more effectively can be more valuable than winning the next contract or growing market share.  I have successfully used cash management to turn around businesses, and R&D tax credits are among the most underused levers for doing this.

This is one of the reasons I am involved with RCK’s Innovation Advisory Council. There is real value in helping businesses identify and access funding support for the innovation they are already undertaking, particularly when that support can generate cash returns. R&D tax credits are a good example. For innovative businesses, this can be a powerful source of cash, but too often it is under explored, misunderstood or treated as an administrative exercise rather than a strategic funding opportunity. When approached properly, it can support cash flow and give finance leaders another lever for value creation.

Leaving the business better than you found it

One of the things I am proudest of in my career is not just the financial outcomes. It is the people.

In three of the companies I worked in, the person who replaced me as CFO was the first person I recruited. In the other two, that person went on to become a CFO somewhere else. That matters because value creation is not just about the numbers you deliver while you are in the seat. It is also about the capability you build behind you.  

A CFO should leave the business better than they found it. That means stronger data, better processes, clearer decision-making, deeper relationships, improved cash discipline and a finance team capable of stepping up. It is not enough to produce accurate reports; this is now the baseline. The real value lies in interpretation, challenge and action and it is this that creates value over the long term.

Two questions for every CFO today  

If I had to leave finance leaders with two questions, they would be these:

First: how am I helping everyone else succeed?

If you help the CEO, the executive team, the board and your own people make better decisions, you will create more value than you ever could by staying inside the finance silo.  

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Second: where is the cash?

As discussed, cash is control, resilience and provides options.

Today's CFO has never had more responsibility, with the role broader, more strategic and more exposed than it used to be. The CFO is no longer just the person explaining the numbers but instead is now one of the key architects of what the business becomes next.

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