Gartner analysts have identified nine traits CFOs can implement for better performance during the coronavirus pandemic.
"We're currently facing a downturn that could be even bigger than 2008 due to COVID-19," Samantha Ellison, senior principal of advisory for the Gartner Finance practice, said in the press release. "CFOs must [study] the behaviors that worked for CFOs after the last recession."
"CFOs should seek to emulate these nine winning traits," Ellison said. "These proven practices distinguished the winners from the losers after the last recession, and will prepare organizations for many of today’s challenges."
The researchers base their recommendations on findings from the past 20 years of Gartner research into how CFOs of efficient growth companies guide their organizations through uncertainty and crisis.
Gartner's research showed efficient growth leaders were 1.4 times as likely to gain first mover advantage with transformational innovations. M&A deals were on average 21% larger in size, with reintroduced R&D spending significantly higher as well.
"The best-performing companies fight the tendency to hedge their bets in the growth investment process, instead making riskier investments in identified growth opportunities," Ellison said.
Maintaining control over scale and understanding the hidden cost of complexity is vital. Efficient growth CFOs had 24% fewer product or service lines, and 18% fewer industry groups, compared to peers.
Efficient growth CFOs build consensus on the most important strategic initiatives, and make sure there are extra resources, in case they are required to expand or expedite them.
Obstacles to taking risk
The best-performing CFOs are willing to reevaluate process and cultural "anchors" that can prevent a willingness to make smart growth bets.
"Finance department bureaucracy is often a good place to start looking, but short-termism and 'it's-too-dangerous-to-fail' attitudes can also be anchors, as are capacity issues from ill-judged cuts," Ellison said.
Drivers of customer value
Effective CFOs don't defer to marketing or sales what drives value for their customers. Instead, the best CFOs spend nearly 5% of their time with customers, with a goal to double that amount.
Efficient growth CFOs map out timelines with associated exit triggers mapped to each stage of an initiative, long before they make such investments.
Protecting costs that support competitive advantages
"Avoid spending cuts that threaten remote working ... CFOs should be careful they aren't cutting the very things their business needs to recover from this downturn," Ellison said.
The finance department is not always capable of reaching operational processes at the front line. But "efficient growth CFOs creatively engage the business in finding these savings," Ellison said. For example, building programs which "reward departments for savings found, helps to incentivize more participation in cost optimization," she said.
Examination and testing of ifferent budget models ensure CFOs have aligned resources properly. Zero- and driver-based budget models identify activities truly creating business value.