How CFOs can bounce back from COVID-19 with the finance organisation they always wanted...

May 19, 2020

by Richard Pinder Partner

Email +44 (0)20 7212 4895

Recently CFOs and their finance organisations have - quite rightly - been focused on limiting the immediate impacts of COVID-19. However, as COVID-19 lockdown measures, in some countries, start to ease and a gradual return to the workplace begins, CFOs and their finance organisations are now moving to the next stage of their response. This means looking beyond the here-and-now to assess their longer-term strategy – and work out how best to operate in what comes next. 

This rethink may prove a catalyst for profound and far-reaching change. In my view, the experience of the crisis could trigger a transformation both in how finance functions operate, and also in the role they play in shaping organisational strategy in a post-pandemic world. 

Why do I say this? Let me start by looking at the nature and shape of the crisis response currently underway in most companies.

Essentially, we see a response to COVID-19 that will follow three successive phases. The first, where activity has focused to date,  we refer to as the Mobilise phase. In this phase urgent and immediate actions have been taken to shore up and maintain day-to-day operations, manage liquidity and protect people. 

Finance clearly has had a central role to play at this stage; focusing on tight management of costs and cash and supporting the transition of the workforce to remote working, whilst continuing to close the books, report the numbers and maintain internal controls.

The second phase – which some UK businesses are just about entering now – is the Stabilise phase. Companies are settling down for the duration, as virtual ways of working bed in, a sense of predictability returns and a few sectors gradually start to return to the workplace. Finance will remain strongly focused on cost, cash and liquidity, but now more as part of business-as-usual than a crisis management response.

As this phase plays out, it will give way to the third, critically important phase: Strategise. As more and more countries learn to live with COVID-19, the crisis will recede, economic activity will start to pick up and commuting will restart in earnest.  When that happens, companies will begin to act on new strategies to accelerate their growth in the new business environment. 

And Finance’s role in this? To help maximise the growth curve, by generating insights that enable the business to target the right strategic actions at the right areas.

Finance’s ability to lead organisations out of this crisis will be critical to the future of the business. In recent years, we've seen how forward-thinking CFOs have responded to our insights on emerging trends to have an active voice in the future direction of their businesses. These include advances like pervasive digitisation, more remote working or centres of excellence staffed by small, highly expert virtual teams, plus strong investment in analytical insights and scenario modelling to guide strategy at board level.

We had expected these trends to shape gradually in the coming years. But the pandemic has accelerated their arrival – acting as a catalyst for getting long-term ambitions realised much sooner. The result? CFOs now have the chance to come out of the COVID-19 crisis with the reinvented finance organisation they always wanted – rather than just rebuilding the organisation they’ve always had. 

However, making this happen will demand a number of elements. One is robust forward planning, to avoid simply recreating the past. Another is investment, which will inevitably be in short supply post-pandemic. Securing the necessary resources will therefore require new and more creative approaches to developing the business cases for transformation projects. 

The message? As COVID-19 plays out, it’s putting finance at an inflection point – a critical juncture where it can either settle for a resprayed version of the past or create an entirely new future. It looks like a binary choice. But in my view, it’s not really a choice at all.

by Richard Pinder Partner

Email +44 (0)20 7212 4895