While we are not yet in a pre-recession environment, signs of a potential recession are surfacing, Christina Ross, CEO and founder of FP&A software provider Cube said in an interview.
The fact that the Fed is continuing to raise interest rates on a regular basis, the persistent strength of the labor market, and CEOs’ optimism about the present — if not future — environment show we have yet to enter pre-recession, she said, but rather we are in a post-bubble environment.
This time period offers CFOs a window of opportunity as they look to set up their companies to weather the probable incoming economic dip. While CFOs are certainly facing challenges, the current environment also represents a time when CFOs are in the best position they can be in to make the best impact, Ross said.
“When times are tough, this is when the CFOs really shine,” she said. “When times are great, sometimes CFOs are sort of taken for granted. It's a necessary role, but they become the hero when times are difficult.”
A self-proclaimed “serial CFO” turned CEO, Ross has held CFO or head of finance positions for video marketing firm Eyeview, global technology firm Criteo, and online fashion startup Rent The Runway, according to her LinkedIn profile. She has also served as a board member for the CFO Leadership Council, and has acted as CEO for Cube since 2018.
Invest in automation now
Taking advantage of this period before the economy settles into pre-recession means CFOs must carefully consider their next steps.
The current environment means budgets are not yet being cut as drastically as they might be in the next six to 12 months, Ross said — making it the ideal time to invest in key technologies that could lower costs when that leaner period does arrive.
“Making those investments now while you still have the budget to reap the benefits six to 12 months out means not only do you have lower cost for higher productivity in the future, but you also get those budgets approved now for additional automation and technology spend,” Ross said.
Technologies or software such as that offered by Cube — which provides companies with FP&A automation and workflow solutions that can be integrated into already familiar tools such as Excel or Google Sheets — can also help CFOs to alleviate some of the hiring and staffing pressures they may face moving into a recessionary environment.
“There's also a play here that you may not want to make any staffing changes when you invest in automation,” Ross said. “You're just spending less time on getting the data and spending more time on the deep analysis, which has advantages in a recession.”
Automation in areas such as FP&A can go further than simply reducing the need to hire new staff or cost-cutting measures, Ross said — it can also help to strengthen business outcomes, allowing finance teams to collect data more swiftly and to better consolidate their future strategies.
“What we found is that automation is not just cutting headcount or saving dollars in the traditional sense, it's helping those finance teams be more strategic and be more effective in their roles, helping the business move forward in a more effective way,” Ross said.
Making the CFO to CEO jump
Being able to have and to execute that strategic vision is a talent that could serve CFOs looking to make the move to a CEO position well, for that matter. “I know my numbers,” Ross said when discussing how her CFO experiences have helped her as a now-CEO.
Cube is a very “metrics-driven” company in part because of her status as a former CFO turned CEO, Ross said, with a command of their numbers that impresses the company’s board.
CFOs are therefore very well-suited to moving into a COO or CEO position, she said. Another benefit of bringing one’s CFO experience to bear inside of the CEO seat is the familiarity financial heads already have in making tough choices, she said.
“I think as a CFO, we're sort of very well trained in sharing difficult news, making difficult decisions, and it almost becomes second nature to do the right thing without worrying about whether or not you'll be naturally liked,” Ross said. “So I think that provides a bit of courage coming from the CFO seat, going to the CEO [position].”