Question

Think of an imaginary work situation related to current events, e.g., COVID19 pandemic, Omanization, etc. Briefly (!) describe this situation. In this situation, you are a manager who needs to make a decision. Briefly (!) describe what decision you need to make.

Answer 1

The spread of the novel coronavirus has created a worldwide humanitarian and economic crisis. The events we are living through are in many ways unprecedented, with large-scale quarantines, border closings, school closings, and physical distancing. Governments and communities have been jolted into action to “flatten the curve.”

Organizations, too, have needed to accelerate their actions to protect employees, customers, suppliers, and financial results. The challenges are many and varied: with some companies losing up to 75 percent of their revenues in a single quarter, cash isn’t just king—it’s now critical for survival. While always important, digital connectivity is now fundamental to the continuity of business operations, as remote work becomes the norm across much of the globe. The need for frequent, transparent communication with colleagues and investors has only ramped up in importance as business conditions, epidemiological forecasts, and rules of conduct change daily, if not hourly.

Amid all this uncertainty, the CFO(Financial manager) can play a strong, central role, alongside executive peers, in stabilizing the business and positioning it to thrive when conditions improve. The CFO is the leader, after all, who most directly contributes to a company’s financial health and organizational resilience day to day. Our experience in helping clients through both internal and external crises offers lessons about the actions that CFOs should take in the wake of the pandemic to put their companies on a sound financial footing and help reduce some of the fear and uncertainty.

• Resolve and resilience: Addressing the immediate crisis

• Launch a cash war room

• Develop scenarios

  Amid this period of heightened uncertainty, finance and strategy teams will need to rely on a range of scenarios rather than on individual time-horizon–based frameworks. The finance leader should develop a point of view about two or three integrated scenarios that encompass multiple eventualities

• The CFO must take a lead role in the financial and strategic aspects of crisis management

• Once concerns about cash preservation have been addressed, the CFO needs to ensure that the company is positioned to operate effectively in this next normal. The finance leader’s critical tasks here will include making operational improvements to bolster productivity, reevaluating the investment portfolio, and investing in the finance function’s capabilities.

• Bolster productivity

• Reevaluate investments and strengthen the balance sheet

• Turbocharge the role of financial planning and analysis

• Adopt a transformation mindset when reallocating resources

• Boost productivity through digitization

conclusion

In the coming days, weeks, and months, as employees are struggling with anxiety about their health, their future, and their loved ones, finance leaders must demonstrate empathy—but also bounded optimism that the organization and its people will find a way through the crisis.

The CFO can back up this view with clear actions and decisions. Regular communication is critical: the CFO must be forthcoming about the “knowns” and the “unknowns.” This will help ease misgivings, decrease distraction, and keep people motivated. Also critical is empowering others in the finance organization to direct aspects of the crisis response while establishing a financial decision-making framework that will help executive peers make necessary trade-offs.

No one knows how long the pandemic will last, but in time, business and daily life will find a new equilibrium. CFOs are key to ensuring that their organizations not only survive the current crisis but thrive in the next normal.