Adapting to COVID-19: Lessons from the CFOs
posted on July 29, 2020in the Blog Category
Adapting to COVID-19: Lessons from the CFOs
Mitigating the threat of disruption is an ongoing challenge for business leaders. Whatever sector you operate in, there’s always some technology, market entrant, or economic tremor around the corner that has the potential to force you into rethinking your whole business model.
Rarely though, is there a disruption which impacts almost every sector, instantly and at the same time. The 2008 global financial crash was the last event that had business leaders of all persuasion scrambling to adapt to a new reality. As significant as that disruption was, it seems now like a mere bump in the road compared with the devastation wreaked by COVID-19.
However, industry is a remarkably durable entity able to survive through global conflicts, economic collapses, and yes, even pandemics. COVID-19 has dealt an almighty blow to the business world, but adaptation to the new environment it has created isn’t just possible, it’s already happening.
I recently took the time to read through the thoughts of prominent CFOs in a recent iteration of EY’s annual ‘DNA of the CFO’ programme and realised that the challenges discussed, and the ideas for overcoming them, are applicable to the COVID-19 business landscape.
For this piece, I would like to share my thoughts on how these CFOs have been dealing with modern challenges and how business leaders can use this insight to navigate their way through today’s turbulent waters.
The importance of anticipation
Though the threat of a pandemic and the chaos it could unleash may have been lingering in the minds of some before a strange pneumonia-like illness was identified in the Chinese province of Wuhan, no business leader was prepared for what 2020 has since delivered.
However, now this reality is upon us, anticipating the direction of commercial travel is more critical than ever. Particularly in those hardest hit sectors, where business models and existing conventions are under direct threat, being reactive isn’t enough. Business leaders need to be looking at how behaviours are changing and formulate plans to adapt their offering to align with those behaviours. This means setting aside the time for deep, strategic analysis, forecasting and planning, and looking at ways the business can be restructured internally for these plans to be realised.
COVID-19 has been a disruptive event, but it is an event that has and will continue to trigger further disruptions. The businesses that will cope with these most effectively are the ones that can anticipate what they might look like. This doesn’t necessarily mean producing fully thought-through plans straight away, but warning signs must be raised where they are identified. They must be discussed thoroughly and collectively, and, where the disruption is deemed significant and immediate, acted upon.
Top CFOs are great advocates of continual professional development, of constantly learning new skills and broadening knowledge bases. It is vital that the firefighting required to stave off the worst excesses of COVID-19 does not eliminate opportunities for such training and education.
After all, companies that have had to make radical changes to their practice need employees that are braced to flourish within a shifting landscape. This requires being open to new ways of thinking and not sticking rigidly to legacy policies and procedures. Professional growth must sit alongside responsibility.
It’s a challenge for sure, but it’s where we will see our real post-COVID-19 success stories emerge. Those companies who kept upskilling their people to confront an evolving, often hostile environment are the ones who are positioning themselves to become tomorrow’s market leaders.
Know how to lead, and when
In recent years, there has been much reflection amongst CFOs and business leaders generally, as to whether historical leadership styles are appropriate for the modern world. COVID-19 took a sledgehammer to those reflections and forced leaders to confront the fact that modernisation needed to happen, and now.
It may have taken a dose of Zoom-fatigue and the need to tap into empathy reserves as employees adapted to new working environments, but those leaders getting the most out of their people are the ones deploying the most feature-rich management styles.
Turning the focus away from process and towards value creation energises people even in the harshest of times and the more value that can be created, the more that can be offered in terms of pay rises, progression, promotions and skills development. It’s about becoming an influencer rather than a dictator and moving firmly away from cultures centred on issuing demands and barking orders. It’s about leading by example.
Of course, leadership involves holding people to account and expecting excellence, it always will do. However, employees, particularly those amongst the younger generations, expect more than that, and the most effective leaders are working now to meet those expectations.
They know their data
Your data is your business. The numbers, whether they refer to social media engagement, customer purchasing history, or EBITDA represent where your business is and how it is performing. Acquiring an intimate knowledge of that data is not just advisable, it is critical.
Being data driven and technologically adept elevates decision-making potential to untold heights. It doesn’t matter what sector you operate within, when you’re making strategic decisions you need data to back it up, understand the direction of travel and what the risks are. Quite simply, using data intelligently makes you better informed and supports better judgement.
That being the case, even the most data-immersed CFOs know that it cannot provide all the answers. They still advocate speaking to customers and testing theories. Regardless of what possibilities a dataset infers, experimentation remains important and using data to drive the key performance indicators that tell you if the experiment is working or not.