Operational finance is an essential aspect of a successful CFO's skill set. But mastering the operational side alone isn’t enough. You also need to wear your strategic leadership hat too and learn to balance both for maximum impact. But how?

In this post, we discuss the difference between two primary types of CFO: the strategic leader and the operational leader. We’ll also share how you can integrate the best of both worlds to help you become the best leader for your finance function, covering topics like:

What is operational finance?

Operational finance is a crucial aspect of a finance function that focuses on the daily activities driving a business forward. Professionals who specialize in operation finances possess a deep understanding of financial statements and the unique datasets of individual business units.

At the heart of operational finance lies the operating financial model. This is a powerful tool weaving complex business processes together to help you hit top-line goals, allocate budgets, and keep cash runway projections on point.

Imagine you're figuring out the cost of producing a new product. An operational CFO won't just crunch the numbers for your budget – they'll also reveal the bigger picture, showing you the real impact of that cost on your company.

This side of the CFO is about getting up close and personal with the company's past and present finances. The CFO will paint a crystal-clear picture of where you stand today while tirelessly working to trim down those pesky operational costs.

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What is strategic finance?

Strategic finance is the domain of CFOs who focus on developing comprehensive financial plans for their companies. Just like operational CFOs, these financial wizards have a deep understanding of the company's inner workings. But, they kick things up a notch by harnessing this knowledge to set ambitious goals and propel the business forward.

Picture our previous product production scenario: a strategic CFO wouldn't just wrap their head around production costs – they'd go the extra mile to evaluate future growth potential and shape the company's vision.

What truly sets strategic finance apart is its future-focused outlook, which zeroes in on planning and charting a course for the company's long-term financial growth.

Pros and cons of embracing operational finance leadership

According to IBM, CEOs view the CFO as playing the most crucial role in their organizations over the next 2 to 3 years. To live up to their expectations, it's a good idea to get familiar with what it takes to bring operational finance leadership to the role of the CFO, and the pros and cons of doing so:

Pros of operational finance leadership

1. Transform business data into actionable departmental insights

With their unique vantage point at the crossroads of all business data, operational finance leaders are perfectly positioned to amplify growth. They excel at translating the bigger picture into valuable insights for department leaders, ensuring plans are aligned with business goals and maximizing ROI.

2. Keep your head above water during market downturns

When the market takes a nosedive, operational CFOs have got the company’s back. They know exactly how to drive efficiencies and guide senior management through crucial decisions to improve cash flow, such as boosting revenue per employee or tweaking payment plans.

3. Fine-tune performance by benchmarking KPIs

Operational CFOs are masters at monitoring crucial business metrics like gross profit margin, working capital, and operating cash flow. They compare these figures against industry benchmarks to help pinpoint where to trim costs and stay competitive.

Cons of operational finance leadership

1. Missing the future-focused outlook

While operation finance leadership excels at learning from the past and honing in on the present, they may struggle to envision the company's future, leaving them less prepared for long-term growth and potential financial risks.

2. Overlooking market changes

Factors like government policy shifts or natural disasters can throw a wrench in the best-laid plans. And even if we set aside these extraordinary circumstances, evolving customer demands, emerging technologies, and shifting marketing strategies make it challenging to make sound financial decisions based solely on past data.

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Comparing leadership approaches: Operational CFO vs. strategic CFO

While operational and strategic CFOs both play crucial roles in managing a company's finances, they each bring distinct qualities to the table.

Here are some key differences between the two leadership styles that help them stand apart:


Operational CFOs focus on understanding the inner workings of a company to boost efficiency and remove redundancies. They achieve this by scrutinizing each function, pinpointing areas for improvement, and cutting unnecessary expenses.

Strategic CFOs, on the other hand, concentrate on the company's financial health and its impact on future growth. They assist management in setting realistic long-term financial goals and provide insights to guide the company toward those objectives.

Areas of focus

Operational CFOs zero in on daily business operations, developing strategies to streamline processes such as:

  • Allocating team members to projects
  • Pausing ineffective ad campaigns
  • Consolidating tools for greater productivity

CFOs who are more strategic based will focus on the company's overall financial strategy. They often work closely with product designers to create more profitable product lines, team up with accountants to ensure precise financial reporting, and explore revenue generation possibilities in up-and-coming markets.

Time Frame

Operational CFOs usually zero in on shorter timeframes, delving into past and present financial data gathered over several months up to a year.

On the other hand, strategic finance leaders adopt a more long-term perspective, evaluating information across multiple years to obtain insights and analysis.


The operational side of a CFO will home in on business units or departments, scrutinizing granular details such as daily raw material costs or an individual's weekly performance.

In contrast, CFOs who lean in on the strategic side of the role will usually take a more holistic approach, ensuring that each department achieves its financial objectives and promoting company-wide growth.

How different types of CFOs can help businesses

How different types of CFOs help businesses

Operational CFOs can help your business:

  • Reduce excess spending
  • Enhance ROI
  • Conduct financial analysis and performance management
  • Identify and address inefficiencies
  • Understand the company's operations and financial standing
  • Provide a comprehensive view of the company's current finances

Strategic CFOs can support your business by:

  • Collaborating with executives on future planning
  • Evaluating the company's financial health
  • Working with the CEO and HR on staffing needs from a financial perspective
  • Determining resource allocation strategies
  • Facilitating sustainable growth through mergers and acquisitions
  • Boosting stakeholder and investor confidence

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7 tips for integrating strategic and operational finance

1. Embrace the magic of finance automation

Say goodbye to mundane, repetitive tasks, and hello to finance automation! By leveraging cutting-edge automation tools, you'll free up precious time to focus on strategic decision-making and delve deeper into operational analysis.

Watch your accuracy improve and manual data entry become a thing of the past!

2. Build bridges between departments

Strong collaboration between departments is your secret weapon for seamlessly blending strategic and operational finance.

Encourage open communication, and watch as understanding different business units' priorities helps you craft a financial strategy that aligns with the company's big-picture goals.

3. Keep your finger on the pulse with real-time reporting

Stay ahead of the game by implementing real-time reporting systems. As a modern CFO, you'll be able to monitor performance indicators on-the-fly, addressing deviations from expected outcomes and striking the perfect balance between strategic and operational concerns.

4. Adopt a forward-thinking mindset

While reflecting on past performance is essential, it's time to shift gears and adopt a forward-looking mindset.

Proactively anticipate market changes, spot growth opportunities, and plan for potential risks, all while ensuring your company's financial stability and long-term success.

5. Level up your skills and stay informed

The finance landscape is always evolving, so it's crucial to keep your skills sharp and stay on top of industry trends.

Embrace continuous learning and professional development opportunities to become a well-rounded CFO who can master both strategic and operational finance.

6. Develop a balanced scorecard

Combine the best of both worlds by developing a balanced scorecard that features key performance indicators (KPIs) from strategic and operational finance realms.

This powerful approach aligns financial targets with broader business goals, ensuring that short-term operational improvements contribute to long-term strategic growth.

7. Cultivate a data-driven culture

Inspire a data-driven culture within your company by emphasizing the significance of data in decision-making processes. Encourage teams to use data as their guiding star, showcasing the impact of their initiatives on the company's financial health.

By putting these tips into action, you'll be well on your way to mastering the art of integrating strategic and operational finance. Embrace your role as a dynamic, modern CFO and drive your company towards new heights of growth and success!


What are examples of financial operations?

Examples of financial operations include budgeting, cash flow management, cost tracking, and monitoring the performance of individual business units or departments.

What is an operational finance manager?

An operational finance manager is a professional responsible for overseeing daily financial activities, improving efficiency, and driving the financial success of specific business units or departments.

What is the difference between operational and strategic finance?

Strategic finance focuses on long-term financial planning, growth opportunities, and overall business strategy. On the other hand, operational finance prioritizes daily financial activities and short-term goals.