These are unprecedented times in the business world, but never has there been a better time to live Albert Einstein’s famous words:
"Insanity: doing the same thing over and over again and expecting different results"
Conversations I’ve had with business leaders, particularly CFOs, over the last three months have a consistent theme – they believe organisations have no choice but to relook the way in which they are spending money, prioritising projects and measuring results.
A cautious few have gone into “lockdown” thinking, battening down the hatches and weathering the storm. These companies are most likely to emerge, if they survive, as semi-drowned rats – emaciated, disorientated and in desperate need of sustenance. Other CFOs are doing what they can to keep the ship afloat – preserving their organisation’s seaworthiness and hoping to emerge in tact. The more visionary CFOs are recognising that extraordinary times call for extraordinary thinking and they are addressing the current challenges with incisive and decisive leadership.
What are the three elements on which visionary CFOs are focusing to ensure their companies and their people emerge from the maelstrom stronger, leaner and ready to take on the new world – a digital-, remote- and outcomes-centric apocalyptic world?
Firstly, visionary CFOs are not stopping their spend, but they are reducing it and redirecting it. Any spend has to deliver tangible, measurable returns on the investment, or it does not get approved.
Secondly, visionary CFOs are considering the shape and form of their post-COVID company. It needs to be lean, agile and digitally enabled. If COVID has given them one insight, it’s that senior management are struggling to transform their business thinking and processes from analogue to digital. Taking a traditionally analogue process and “putting it online” is not digital transformation. It is a pig with lipstick. CFOs are taking it upon themselves to ensure real digital transformation and enablement happens within their organisations.
Thirdly, digital transformation must lead to reduced costs, increased revenues, organisational longevity and maximised value for customers, staff and shareholders. This is a huge but perfectly legitimate expectation to have. How can this be done quickly and effectively – NOW in other words?
There are multiple solutions for innovative but cautious CFOs to embrace to deliver results to their boards and shareholders. Moving away from the sinking ship analogy, I’d like to borrow a metaphor from the martial art form of Judo. In Judo, smaller practitioners have learnt to beat larger opponents by using the larger person’s mass and momentum. COVID and lockdown are the behemoths. How can organisations leverage this seemingly unsurmountable challenge to win the battle?
The first and most obvious step is to move to remote working. Consider the implementation or updating of an organisation’s core software system as an example. These projects are hugely expensive, time consuming and resource intensive, but the consequences of stopping a project could debilitate the organisation in the longer term. Why not view this problem through a “digital transformation lens”, throw out the mega-expensive third party providers and go straight to source? It’s no secret that the middleman adds expense but not necessarily value, but it’s not difficult for anyone using digital platforms to source these skills, services, products directly – think ten80, Uber, Amazon. These are providers, born digital, that give companies and individuals control over choosing what they want, when they want it and how much they are prepared to pay.
In short, the visionary CFO is not stopping funding – they are expecting, and demanding, outcomes-based results that show a quick return on investment and benefit everyone exponentially. They want it all, they want it now, it had better work, and it must make their organisations leaner, more agile and much stronger.
Vice President for Global Growth
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