A shift from Chief Financial Officer to Chief Value Officer is not only a shift in leadership, but requires a paradigm shift in an organization. In this interview, we zoom in on these two shifts with Sanne Vorstermans and Hester van den Bergh, both consultants at SeederDeBoer. SeederDeBoer is a consultancy firm that specializes in guiding change processes with a particular focus on healthcare, the public sector, and the financial sector. Through their work, they aim to craft innovative solutions that enrich organizations and contribute to the betterment of society at large.
Sanne Vorstermans - van Rumpt
Hester van deN Bergh
Why do you find it important that organizations and leaders shift the focus from financial value to broader, societal value?
Sanne: “The main reason I got involved is because of my research and thesis. I became fascinated with the role of what we can still call the CFO. I’m motivated to help organizations change their traditional focus on finance to a broader approach to the CFO role. According to my research, I also believe that it’s really necessary for organizations to change their focus from solely financial value to a broader impact. What I noticed in all the interviews I had was that there is already movement happening. However, it’s really challenging for organizations and for board members to truly embrace this change.”
Hester: “I was always attracted to how public organizations can make a bigger impact on the broader questions within society. Over the past ten years I worked extensively on cooperation between different parts of the healthcare sector, examining how various players contribute to solving different aspects of the same problem. Shifting the focus from financial value to a broader societal value, shows to benefit both the involved organizations and society.”
"There is already a movement happening. However, it's really challenging for organizations and for board members to truly embrace this change.
What are the key developments that are accelerating the shift from solely focusing on financial value creation to also incorporating societal value creation in the boardroom?
Sanne: “Specifically in the healthcare sector, organizations cannot solve problems alone. Collaboration is vital to address these issues through a network, shifting focus from solely internal concerns. Addressing larger social issues, beyond financial matters, requires collective efforts.”
Hester: “More people will require care in the future, but continuing on the same financial path isn’t feasible. There’s also a looming shortage of healthcare workers, prompting a need for alternative solutions. The unsustainable nature and limitations of the system are felt by everyone, driving the shift to incorporating a broader societal perspective in every boardroom.”
Sanne: “This applies to other sectors as well. We live in a world where the problems are too big to fix on our own and too big to address solely from a financial perspective. That is the main reason why everybody feels we need to make a systemic change.”
"It is key to address larger issues, and these problems cannot be solved by just one organization. They are definitely not fixable with a sole focus on financial matters.”
Do you already see CFOs being aware of the need to move toward this broader definition of value beyond solely financial value?
Sanne: “Definitely. In healthcare, the CFO is not a traditional CFO, where the focus is only on money. You see that CFOs in healthcare have a broader responsibility in the organization, and I think that’s a very positive thing that is already happening. Many of the CFOs I interviewed were somewhat upset that I called them CFOs. Many of them say ‘I’m a board member, and I just happen to have a financial focus, but I also have a lot of other things that I work and focus on.’
The external focus in organizations is also evolving. Hospitals, for instance, no longer view patients merely as patient but as members of the regional community. Their goal is to cater to the well-being of every individual in the region, whether diagnosed or healthy”
"In healthcare, the CFO is not a traditional CFO, where the focus is only on money. You see that CFOs in healthcare have a broader responsibility in the organization, and I think that's a very positive thing that is already happening."
How do you advise CFOs to make the transition towards being more impact-driven? What are the key factors you focus on?
Sanne: “We work with CFOs, as well as the broader organization board. Most of the time, we get a question from a CFO or a board member to help them make a transformation in how they are organized to fit with their broad ambition. Our perspective is that you need three factors to make the eventual impact in this transition: (1) ambition, (2) leadership, and (3) organization (as outlined by the diagram below).
You see a shift towards a broader ambition, steering away from focusing solely on financial health or the interests of your own organization. But of course, if it’s only on paper or in their heads, it will not materialize. Thus, it is critical to combine it with the leadership and organization in order to make a real impact.”
What is required from the leadership of a CFO to realize broad, societal ambitions?
Hester: “To start with, for leaders it is important to be personally motivated. Do they connect with this greater ambition? We do see this shift with CFOs. The next question is: are they also able to steer toward this ambition? Do they have the skills to overcome the backlash they might face in the boardroom?
Another aspect is leadership in change. CFOs can be very inspiring themselves, but they also need to know how to bring about this change to the rest of the organization. You can be a good leader, but are you also able to lead your organization through this transformation so that your employees become inspired themselves? How can you let them make a switch to the new? You genuinely have to change how you’re organized and ensure your organization’s values align with your ambition. In that way employees see how their work is contributing to the bigger picture. They should be able to make choices based on values instead of following checklists. The more involved they are, the more willing they are to contribute to the broader ambitions and make their own transformation“
Sanne: “I believe it closely relates to the organizational part of the triangle. If you have ambition, you must ensure that your control mechanisms are aligned with that ambition. In many organizations, you find broad ambition that’s not financially driven but focused on the impacts the organization wants to make. However, when you look at how they attempt to control the organization, especially in their performance review cycles, you mainly see financial matters being emphasized. For instance, the ambition might be to ensure that healthcare is accessible to every resident in the region, but the monthly reports mainly focus on financial outcomes. That misalignment is a significant issue for the organizational part.
When you look at the healthcare sector, and due to the connections with other stakeholders in the region, it’s so much more important to collaborate because you can’t solve the problems alone anymore. For example, it’s way more important that you have a good relationship with your partners. This is becoming increasingly important for board members and other people in the organization.
It’s a constant search for what we need now. Can we train people in our organizations to develop these competencies, or do we need to bring in new employees who bring different perspectives to the organization? One of the main things in our job is to ask questions and be critical. Asking: Why do you do this? What does it bring you? What does it bring to the shareholders of your organization?”
"CFOs can be very inspiring themselves, but they also need to know how to bring about this change to the rest of the organization."
How do you help organizations transform towards being more impact driven?
Hester: “Our focus is on getting the organization to transition. We can’t create blueprints for the end situation. The key is to take all three parts of the triangle into account, organization, leadership and ambition. We sometimes say it’s not a transformation from A to B, but rather from A to C. We start somewhere, and together we must develop how how the end result will look like.
Sometimes you get stuck in the organizational level, and you have to shift the focus towards leadership or ambition. At other times, you flow in ambition, but you have to bring it back to ‘How are we going to organize it?’ Otherwise, it remains just nice words. This is how we drive the transition forward, focusing more on the direction than providing a precise picture of where we will end up.”
Sanne: “Maybe I can provide an example. We have just completed the new strategy for a hospital, and we have divided that strategy into ten strategic goals, each with a few indicators to track our progress. I recently reviewed all those indicators and noticed that none of them were financial, which was not initially planned. However, the result of the strategy was that there were no financial indicators associated with the strategic goals.”
What do you think are the key qualities and skills that leaders need to drive change within an organization?
Sanne: “In addition to connecting with the people in the organization and the network, it’s still crucial for leaders to be able to set a clear direction, saying: ‘This is where we are going.’ Because sometimes, when it’s all about connection, cooperation, and values, it can become too soft. This relates to the leadership part of a transition.
According to my research, we used to believe a leader had to know and be the best at everything. However, it’s becoming increasingly important that as a good leader, you know the right people and can assemble the right knowledge and expertise around you. You also need to be capable of asking the right questions and engaging in reflection, rather than just focusing on what you know and must do.”
Hester: “We both work in non-financial sectors, particularly in healthcare, education, and government. The advantage of these organizations is that they are connected to a larger societal purpose. However, there is a risk that they might become complacent, thinking they are already doing good things, while they still have tremendous progress to make.
All organizations and their leaders must take responsibility for the bigger picture and invest in it, even though it may be challenging. My experience is that when you connect organizational or leadership issues to this bigger societal questions, it provides a starting point for change. People tend to be more open to looking at the bigger picture when they feel that what they are doing is no longer effective, or when clients, partners, and employees express dissatisfaction.
Sometimes, internal willingness to change needs to align with external pressures to drive change, and that’s when things come together. I see it as a more circular process, not a one-time leap from imperfection to perfection. It’s essential to be practical about what’s possible now and what might be achievable in the next 2-3 years. You have to go through the cycle multiple times to bring about real change, with each iteration offering opportunities for broader improvements.”
The Chief Value Officer of the Year Award is an initiative of the Impact Economy Foundation in collaboration with de Baak and SeederDeBoer. On 15th of December 2023, the first CVO of the Year Awards were awarded to 5 CVOs, find out more about the winners here.