More surveys were published these past few weeks, and most continue to show resilience in business outlook and optimism. There’s still plenty of uncertainty to go around, but that’s pushing FP&A in healthy directions as they look for creative replacements for traditional approaches, which have been rendered virtually useless by the pandemic. On an even brighter note, most CFOs expect salaries to rise a bit in the next year as they struggle to retain hard-to-replace workers.
Here are a few expert opinions we’ve found helpful in the past week, and we hope you do, too.
What the Experts are Saying on FP&A
Surveys are in vogue these days and many are refreshingly positive, including this one from the Association of International Certified Professional Accountants. The share of companies saying they plan to expand within the next year nearly doubled from last quarter, from 24% to 43%. And, their “CPA Outlook Index” shows that executive optimism is nearly as high as it was a year ago, well before the pandemic. But, all of the optimism is tempered by continued uncertainty. “We’re seeing improvement in a number of categories this quarter but it’s worth remembering we’re digging out of a very deep hole of pessimism.”
WSJ / Deloitte: Dynamic Planning and Forecasting for Better Insights
Flexibility is the new buzzword as the rigidity of traditional FP&A approaches to planning and forecasting continues to fall short. For those still considering their old ways, FP&A should think twice before they base plans on past assumptions and historical data. What’s happening, according to Deloitte, is that the combined need for constant scenario planning and a lack of confidence in future projections is pushing CFOs to challenge their own ways. That puts FP&A at the center of this reengineering. “FP&A is ideally positioned to help the business understand which assumptions and actions taken in immediate response to the pandemic were effective and which were not.”
At this point in 2020, we’re all taking on chaos and uncertainty as just another day’s work. But some innovative Finance teams are taking the opportunity to build more brainstorming and creativity into their function. A suggested approach is to promote a “Yes, and” environment, where ideas are allowed to develop before others react. “As CFO, the staff looks to you to establish boundaries for acceptable behavior and contributions. Before encouraging creativity from others, understand how you react to new ideas.”
The average CFO tenure is just under five years, and that seems to be holding steady during the pandemic. However, there have been some high profile CFO moves, including at GM, Cisco, and Avis Budget Group. Some are departing after getting through the high pressure slog of the pandemic, while others are finding they’re just burned out from crisis management and workplace changes. “The job is becoming ‘less about scorekeeping’ and more about leading a virtual workforce with empathy.”
Stay Tuned for More Useful FP&A Content
We’ll be continuing this weekly update with links related to how FP&A and CFO’s are leading their organizations through the continuing recovery. If you have comments, questions, or suggestions, please engage with us on Twitter, LinkedIn, and Facebook.