We are now five months into the COVID-19 pandemic and, while some economies are taking steps to reopen, uncertainty still prevails. The chief financial officers (CFOs) and Finance teams we work with have gotten through the initial crisis stages, but they are still trying to make sense of new economic realities.   
In recent weeks, I have talked at length with clients around the world and participated in numerous virtual conferences and symposia. CFO experiences vary widely from country to country and from industry to industry, but there are five common themes emerging in the way CFOs are dealing with the present and the immediate future:  

  1. “Normal” won’t be like it used to be. No one knows when the pandemic will end, but it is becoming clear that many companies will never go back to the old way of doing things. For example, some companies made themselves virtual in a hurry and have found that they like the new arrangements. They may never go back to having everyone gather every day at a central office location. They are re-thinking their approach to real estate and, indeed, to the very concept of an office. 
  2. Globalization may not be such a great idea. Many companies with headquarters in one country but manufacturing operations in another country are examining other sourcing options. As the pandemic unfolded, reliability commanded a premium. Now companies want to exert more control over where and how they make their products.    
  3. Scenario planning is the key to forward progress. In financial planning and analysis, there are more variables at play and a high level of volatility seems to be a permanent condition. Companies need the ability, not only to develop multiple scenarios at high speed, but to develop detailed action plans to accompany each scenario. And CFOs need to stress-test their companies’ balance sheets for each scenario, even for some which may have seemed highly unlikely just a year ago. 


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    To say the first half of 2020 has been challenging would be a major understatement. For the most part, however, CFOs are going into the second half of the year with some level of optimism.

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  4. Innovation is more important than ever. Companies may ask workers to adopt social distancing or to work from home, but they need to keep experimenting and innovating. More and more companies are recognizing the value of artificial intelligence in analyzing vast quantities of data and coming up with insights that can be used for everything from predicting consumer demand to identifying new sources of key supplies.  
  5. Spending wisely (rather than liquidity) is the issue. Early in the crisis, our clients were concerned about liquidity. Then the US Federal Reserve and the European Central Bank have pushed large quantities of cash into the financial markets, propping up share prices and creating a perceived disconnect between stock market performance and what is going on in the global economy. Most companies we have talked to have no cash problem and some CFOs have said they have been asked by their boards of directors to borrow more money. The key question is what to do with the cash; companies are working hard to evaluate potential investments (including some M&A opportunities) but they are also using new technologies to evaluate and manage the risks associated with each investment. 

To say the first half of 2020 has been challenging would be a major understatement. For the most part, however, CFOs are going into the second half of the year with some level of optimism. And, since they have been able to accomplish things they never would have thought possible – such as “virtualizing” their operations almost overnight, helping find new markets and uses for their companies’ products, and keeping things running more or less smoothly through the worst stages of the pandemic – they have gained confidence in their ability to deal with whatever the second half of the year has in store for them.   

Dr. Christian Campagna

Senior Managing Director – Strategy & Consulting, CFO & Enterprise Value Global Lead

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