Emerging from CV-19: 3 key themes on the minds of CFOs

As our clients and prospects are starting to think about what seems to be now commonly termed the ‘new normal,’ I’ve had the privilege of speaking with several of our clients' CFOs and Execs in my wider professional network, as well as Aptitude’s own Board and leadership team about how we emerge from CV-19.

In the hopes that others can find as much value from the themes and insights that came out of these conversations as I did, I've shared a few of them below. Please feel free to share other thoughts and ideas in the comments section!

A reassessment of priorities 

Strategic priorities have shifted - and that’s a good thing. I think if you are leading a company and you haven’t taken a good hard look to make sure the priorities you set at the beginning of the year or even last year are still relevant in today’s environment, you are missing an opportunity.  

I’ve spoken with CFOs who are doubling down on strategic projects. Maybe they were dipping a toe into a digital transformation effort but now it has grown bigger and broader in scope as they race to shift their business model to match the times. Maybe something that was two or three years out is now an immediate need, maybe something that was in-flight is now shelved or simply no longer relevant. 

I recently read an interesting observation about risk in a McKinsey article that I think is spot on. While CV-19 has certainly made companies conservative in certain areas of their business, in some respects the appetitive for risk as it applies to innovation has actually increased.  They talk about finding a silver lining in the falling barriers to improvisation and experimentation and the permission to embrace innovative action instead of tinkering around the edges. In their words, the crisis is giving companies “a mandate to be bold.” This makes complete sense to me. While a crisis poses challenges, there are also opportunities that can pay off significantly. One point of view is that we have accelerated the move to digital more in the last eight weeks than we could have done over five years due to COVID. This is difficult to argue against. 

According to McKinsey, the crisis is giving companies 'a mandate to be bold.'

An even greater thirst for data 

The second common theme I’ve noticed is the thirst for data and near real-time reporting. It seems that once finance teams were settled into working from home and got through their first period of remote reporting, whether that was month-end or quarter-end, the talk shifted quickly to increasing automation to try and speed up the process and remove the heavy manual burdens that came to light with the move to virtual work. No more walking down the hall to get Bob from accounting to answer a question or agree to a manual adjustment!   

Market and overall uncertainty also resulted in leadership teams and boards requesting constant updates to scenario planning to reflect the ever-changing environment. I think for a lot of CFOs scenario-planning has been a hugely manual process, taking hundreds of people and in some cases many weeks, and they are now realizing that their existing systems and processes are not sustainable in the face of being asked to provide constant trading statements and forecasts.  

I’ve seen it myself in our board meetings. We present our reporting and scenario plans and they immediately come back and ask for a slightly different view, we deliver, they request updates...and on and on. It truly must be an automated process that pulls from a trusted set of finance-accurate data, otherwise, it’s unsustainable. And I predict that once this regularity of reporting is introduced to the market and investors, it will likely remain a requirement that’s not going away.   

A focus on revenue surety 

In this environment, we’ve seen that those organizations with a subscription model or some kind of recurring revenue model are going to be in a much better place than those who are focused on short-term cash or project-driven activity. I think this crisis will accelerate an already existing shift in the push for these sorts of business models that result in steady, more predictable revenue streams.  

I think about the banking industry which has started to roll out premium monthly plans that offer a variety of services in addition to perks and rewards. The gaming industry has increasingly moved to monthly subscriptions for access rather than selling their games outright for unlimited use. In the current climate, will we see hard-hit industries like airlines or retail attempt to come up with feasible subscription-based offerings to help them come back from the brink? I’ve shifted my own traditional monthly gym membership to Peloton where I can not only get a cycling or training session online at any time of the day but I can also track my health, fitness and lifestyle choices against a whole set of digitally enabled peers anywhere in the world when I am back traveling again. 

And for organizations that already utilize this or similar new business models, I think they will take an even more aggressive approach to revenue management and, aligned to the point on data requirements above, will be expected to track, manage, and report on the progression of revenue in more detail as it moves through the contract lifecycle. 

The bad, the good or the great? 

As a CEO, I am living these themes myself. Our business is going through the same progression, moving from a focus on employee safety and navigating the early days of a full-blown crisis, to taking a step back and trying to see the opportunities through the everyday noise.  

At a recent board meeting, we reviewed the strategic priorities we laid out at the beginning of 2020 in our 1-year, 2-year, and 3-year plans and have found that our focus on the areas of digital finance, cloud, remote learning and development (both internal and partner-focused), and the continued enhancement of our Revenue Insights module as well as our Forecasting and Simulation tool are things that not only align with market opportunities but will actually help our clients accelerate as we come out of the current downturn. We've also scrapped a few items and are looking into a few new areas of investment to really explore.  

As I think about what to prioritize and how to move our organization into the future, I keep coming back to a quote by Andy Grove – “Bad companies are destroyed by crisis, Good companies survive them, Great companies are improved by them.”  (source)

I am working as hard as I can to make sure Aptitude Software is squarely in that third category.