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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

May 08, 2020 / 06:34 PM IST

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’.

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.

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COVID-19 Vaccine

Frequently Asked Questions

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How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

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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.
Moneycontrol Contributor
first published: May 8, 2020 05:18 pm

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