Romaney O’Malley is Group CFO at bolttech, and was previously CFO for AIG – UK. She has also held a number of financial roles across Swiss Re, General Electric, and Aviva. Here, Romaney explains how non-financial metrics can help leaders see what’s coming, and why the CFO is central to transformation. This interview was conducted as part of our research inquiry into the role CFOs will play in creating a fairer future.
What role do non-financial metrics and data play in decision-making at bolttech?
Non-financial measures are an incredibly important part of the CFO’s toolkit. By definition, financial performance measures and other financial information offer a rear-view perspective: you’re telling investors and employees about something that has already happened. But this isn’t necessarily a good indicator of what’s likely to happen next and doesn’t tell you much about what is coming down the line. I think that non-financial measures are much better leading indicators as to whether you are on track to meet your goals.
For example, KPIs that give you a measure of customer satisfaction – such as NPS – can provide better insight than purely financial measures. As a B2B2C business, we measure our distribution partner satisfaction as well as their customers’ satisfaction with us; in doing so, we get a much clearer indicator as to whether contracts will be renewed or relationships expanded, and that gives us a sense of what is coming down the road in terms of our financial performance. Non-financial metrics are absolutely vital in letting you know of things earlier, and that helps you take corrective action before you actually measure the financial outcome.
Generally, if you use the right non-financial measures for your business then the financial performance is just the scorecard of all those things working well. As a young organisation, we aren’t encumbered with the same legacy that larger and older companies have, and this means that we can access that kind of data and measure it more easily. Greater scale also brings with it many challenges of complexity, and I think that a lot of companies are probably trying to measure too many things. When deciding what to measure, you need to get a crisp understanding of why you’re measuring it, and how it ties into your objectives as a business; I think that when organisations try to measure too many things they haven’t got a clear sense of this and then overcompensate by trying to measure everything.
“Generally, if you use the right non-financial measures for your business then the financial performance is just the scorecard of all those things working well.”
What role does the CFO play in transformation?
The CFO’s role in transformation projects really comes back to the first principles of the role: you are the custodian of resource allocation. So your role there is the same as in, say, strategy execution. There will be lots of things vying for investment and dedicated resources, but you can’t do everything – and as such you need to make decisions as to what transformation projects should be backed. In doing so, I think it really comes down to having a clear understanding of what the transformation’s outcomes will be and its objectives – is it going to help drive us forward? Is it going to make our customers and distribution partners happier? If we understand transformations as investments that look to achieve these outcomes, then the CFO has a very natural role to play in deciding which projects to pursue and what the trade-off decisions are.
What keeps you awake at night?
I wouldn’t be a very good CFO if I didn’t spend a lot of time thinking about the economic environment we’re operating in. In a really challenging environment like this, there is a lot to think about when it comes to making sure that the business is resilient enough to withstand and thrive under the wide range of scenarios that could play out. I think and read a lot about emerging technologies. They are profound and we have only begun to understand how emerging technologies might affect society and whether we can embrace AI in a way that empowers organisations, customers, and fairly impacts society as a whole.
I spend a lot of time thinking about the risks and opportunities that are presented by rapidly-advancing AI technology. As a tech company, we want to invest in areas that we think are going to have the most impact, but we are also committed to doing so in a way that contributes to the greater good. So there’s a critical, ethical component of this, where you want to ensure you’re getting an outcome that’s good for everyone, and not just your bottom line. We’ve recently set up an ‘AI and Advanced Automation Guild’ within the business, and it provides a space for the many people who are really interested in this to connect with each other and look at potential applications for AI across the whole value chain – everything from fraud detection to product innovation.
I think that businesses should be a key part of the conversation around how we use and develop AI and other emerging technologies responsibly. If you’re going to take advantage of the exciting opportunities that technology presents, you’ve also got a responsibility to participate in difficult conversations around how we use technology responsibly. Being in insurance is a fascinating background to come to this problem from; whilst on the surface it feels and sounds really different to tech, as an industry it has very deep and tight regulation. And, when you look at the most successful insurance markets, you will find that the regulator works very closely with the participants in that market. They strike a very effective balance between the regulatory authorities keeping an eye on what companies are doing, and the companies themselves ensuring that the regulators are well informed and that regulations are fit for purpose given the always-evolving nature of the industry. I think that those principles apply very strongly to the development and use of AI technology.
“If you’re going to take advantage of the exciting opportunities that technology presents, you’ve also got a responsibility to participate in difficult conversations around how we use technology responsibly.”
What are you most proud of in your career?
I’ve really enjoyed seeing the change over time in terms of opportunities and capability in the upcoming generation of people I work with and the fact that group is much more diverse than it was when I was starting my career. I spend a lot of time trying to be a good role model for them, and make myself as accessible as possible so I can share what I’ve learned over the years. They have an incredible opportunity to shape the future, and I’m really excited about the level of talent that is coming through in both tech and insurance. I’m proud of having spent a lot of time working with younger colleagues and helping them to reach their potential, and it’s something I will continue to prioritise investing time in as it’s such an important thing for people in senior positions to do as it allows you to make an enduring impact. And, once I’ve left my career behind me, I want to look back and know that I’ve made a contribution to the draft of people coming up behind me, and that I’ve helped them realise their potential.
If you could give one challenge to your peers, what would it be?
As a CFO, never forget your true north of acting as the responsible custodian of the organisation’s financial health. In looking at corporate failures, it amazes me that some allow themselves to lose sight of this; the roles of CFO and CIO are a huge privilege and offer fantastic opportunities, but they also carry great responsibility. You have the breadth to operate as widely as you want to in the business – but in doing so you need to make sure you’ve got a secure handle on the basics of the job. If you aren’t fulfilling that function, then all the amazing work you can do around sustainability, people, and talent development ultimately doesn’t really matter as the business won’t be able to sustain that activity. While everything in the environment is changing – whether it be the economic environment, external factors, or the risk landscape – that particular purpose of looking after the business’ financial health is a constant.
“Never forget your true north of acting as the responsible custodian of the organisation’s financial health.”