3 CFO Priorities for An Unstable Time

In the best, most stable of times, the job of forecasting and responding to demand is difficult at best. These are not the most stable of times.

The pandemic is lingering, inflation is rising, a recession is looming, the global supply chain is out of balance and worsening, labor shortages persist, and there’s a brutal war in Europe. This instability all comes at a time when private-equity-backed companies’ valuations have soared.

Those higher valuations put immense pressure on the CFO of any organization. How the CFO responds can mean the difference between a business thriving with its new capital infusion and growth targets, or falling behind — disappointing customers and investors. The top priorities for CFOs in this climate are adaptability, use of advanced analytics, collaboration, truth-seeking, and deliberate decision-making.

Continually Revisit Demand

Demand forecasts that vary from actual results are a challenge for any company. That’s particularly true now as demand signals are constantly changing. CFOs need to continually revisit expected demand, sometimes by the day and week. CFOs are asking their crews to sail across the ocean without a map. Finance chiefs need to step up their focus on reliable demand forecasting.

Technology can be a major help. Has your company’s finance group started using digital tools such as predictive analytics and business visualization applications?  These tools improve management’s understanding of business drivers and their impacts.

Collaborate in Two Directions

Finance teams should be working bidirectionally with the various functional areas of the company. In a manufacturing operation, for instance, the CFO should spend time on the factory floor with line workers and managers to understand their key issues and challenges. In this regard, the finance team can better understand and support each facet of the business. While that kind of alliance has been preached for years, we still see many finance executives who haven’t graduated from their historical roles as scorekeepers.

On the other end, CFOs need to be true partners to the CEO and the rest of the executive management team. Effective organizations foster a culture that encourages back-and-forth conversations among senior leaders.

Seek Unfiltered Information

Ultimately, CFOs need to recommend where to spend and, just as importantly, where to save. When they distill unfiltered feedback, gleaned from key leaders, they’re much more effective in moving the company toward its strategic vision. More importantly, their guidance becomes rooted in a complete understanding of changing market conditions.

The modern CFO should be grounded in all operational and performance elements of a company. With that underpinning, they are much better positioned to identify opportunities and shepherd value-creation plans.

CFOs can have more impact during this time, but it will require staying focused on some or all of the above priorities.


Adapted from: “3 CFO Priorities for An Unstable Time”, by Richard Jenkins, managing director for the private equity services group of Alvarez & Marsal, published on CFO News on 26 April 2022.

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