Stage 1: As the business disruption unfolds: communicate clearly

Regular communication is critical in the beginning of a crisis, both about the “knowns” and “unknowns”; this will ease misgivings, decrease distraction, and keep people motivated.

As any crisis unfolds and as underlying assumptions change to reflect the latest information, it’s important to distribute updates to people at all levels of the organisation. If scenarios are shared at all levels, it will be easier to engage them and get alignment to the higher purpose and objectives.

They will also have an opportunity to challenge assumptions and raise observations or ask critical questions about what is happening. Transparency, open communication supported by robust reporting creates a culture of collaboration that puts information into the hands of everyone in the organisation.

Not only does collaboration ensure accurate information, but promotes buy-in once plans are adopted, enabling the organisation to test scenarios, plans and analysis.

Stage 2: As the business disruption passes: consider growth plans

Once the disruption passes, reimagine and reform – look to the next normal.

As a disruption unfolds, many finance leaders must focus on the organisation’s shorter-term needs, closely monitoring performance, costs and productivity. However, once the crisis passes, the business will want to move forward, and accelerate towards recovery. CFOs need to think more strategically about the long-term picture, while also juggling short-term challenges.

CFOs should consider different recovery models to determine which markets and segments represent the greatest opportunity for growth. This growth is typically spearheaded by a strategic team identified by the board. They will be responsible for investments; portfolio shifts and consider any productivity initiatives that will position the organisation to win after the crisis.

Given the CFO’s deep understanding of the economics of the organisation’s business model, their strategic perspective, and their role as partner to the CEO and board, they are best placed to drive these changes.

Higher performing organisations typically continue to innovate, introduce new products and position products or services in new ways following a crisis. The ability to respond to market needs with new business models is key to enabling the organisation to gain a competitive edge and emerge as a market leader. During periods of business disruption, it is natural to focus on cost-cutting, however, by continuing to invest in initiatives that support long-term growth, CFOs can play in role in positioning their organisations for faster recovery.

Additionally, if any supply chain disruptions have occurred, a full review should take place to understand any future exposures or vulnerabilities. Organisations will likely take steps to reconfigure their supply chains to be more resilient to future disruptions for example consider onshoring or “nearshoring” of production, automation or adding suppliers to their list to create more options.

Stage 3: Once the business disruption has passed: focus on the future

Use a crisis to automate finance process to be more resilient.

Recent ongoing disruptions have forced many CFOs to learn from their experiences and transform how they work to drive greater resilience within their teams, ensuring business continuity and driving growth. One of the biggest challenges that finance teams face is the huge reliance on manual tasks, particularly those requiring significant collaboration between teams using on-premise back office ERP and finance systems.

One option is to consider automating complex activities and finance processes:

• Automate manual tasks such as journals, accruals, and reconciliations so finance teams have capacity to focus on the tasks that really matter
• Move any on-premise systems and data to the cloud, enabling anywhere anytime access to staff
• Document process to identify any bottlenecks, but also streamline workflows. Consider using technology to monitor and manage end-to-end tasks, with built-in audit trail of actions.
• Roll out self service capabilities such as dashboards to enable the business to find answers and insights to empower faster decision making.

Without automation or self-service capabilities, many finance teams will struggle to give the organisation the forward-looking information it needs.

Organisations need to double-down on digital investment now, to have a greater chance of being more competitive and resilient.

For further information, including how a finance crisis checklist, download our finance business disruption whitepaper.