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Last Updated : May 08, 2020 06:34 PM IST | Source: Moneycontrol.com

Case for the CFO as a leader in the post COVID-19 world

The abilities to tackle these challenges are more easily found in those with years of experience and intimacy with their businesses, subject matter or environment

Moneycontrol Contributor @moneycontrolcom

Yogesh B  Mathur

Much has been written and said about the so-called VUCA (volatile, uncertain, complex and ambiguous) environment and its leadership challenges. The post COVID-19 world is certainly a VUCA world.

The abilities to tackle these challenges are more easily found in those with years of experience and intimacy with their businesses, subject matter or environment. Hence, it isn’t surprising that Nitin Nohria, the Harvard Business School Dean’s ‘steady hand’ on the tiller was found valuable in the interests of management stability or that even activist investor Edward Bramson’s Sherborne Investors will withhold support for Barclays chief Jes Staley rather than vote against him ‘in recognition of the complexity of the management situation’.

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How then does this work, for those at the helm in Indian businesses, going through the unprecedented COVID 19 crisis with the accompanying staggering disruptions? And for those struggling with prospects of business revival in its aftermath? What would be the key differentiators for the right candidate at the top?

One answer that can be found is in the urgent needs of these unusual times. In the midst of the drastic yet temporary disruption, accompanied by challenges starting with people and logistics and ‘business standstill’, maintaining liquidity across the value chain is key. That together with the CFO’s unique position linked to all key operational functions and corporate roles, puts her in the hot seat.

While the COVID-19 pandemic is probably unique in magnitude and impact, many of these conditions have been faced and addressed before under different circumstances. So, what does it take? An insightful article in the Harvard Business Review some years ago on what VUCA really means by Bennet and Lemoine brought out the challenges and suggested an approach to respond in a practical manner.

This may be represented as follows:
- Volatile: Unexpected or unstable -- Build in slack, reserve or preparedness;
- Uncertainty: Change possible but not given -- Invest in information, be ready to change;
- Complexity: Many complex/interrelated variables -- Build and deploy expertise strongly;

- Ambiguity: Cause and effect relationships unclear -- Experiment upfront; redeploy rapidly

Many of these approaches are in essence counterintuitive in the other let's say ‘old normal’ climate, i.e. stable and growth oriented, driven by replication, efficiency and scale.

So, where does one find the qualities demanded by the ‘new normal’? One might well say, the defence forces or those trained to specifically address such challenges. In the business environment, the CFO is certainly well placed to be able to step up to such demands.

As a stakeholder in all business functions, across the value chain as well as all businesses, he/she is best positioned to relate to the many interrelated issues, complex linkages and the underlying cause and effect.

As a major stakeholder in risk management, she should readily be able to identify, build and drive short term change, whether it be in liquidity, sourcing or in go to market strategy, the whole revenue model or even just major process restructuring.

If the CFO has the experience and depth of understanding as well as relationships within and without, she would be best positioned both in identifying the path ahead as well as building the confidence of key stakeholders.

This brings us to the nub, which is ‘what does the CFO actually need to do to really address the post COVID 19 challenges’. But that’s another story.

The author is a Senior advisor with Grant Thornton, India. Mathur is a chartered accountant with over 35 years of experience as a senior finance professional with over 20 years in CFO or equivalent roles.
First Published on May 8, 2020 05:18 pm
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