Every year there are trends that emerge in every discipline, finance, marketing, sales, and human resources just to name a few. This past year, the pandemic had a significant impact on trends, creating some new ones and accelerating others. Today we are going to look at CFO trends in 2021.
A CFOs job is always evolving, and the pandemic provided an entirely new set of challenges. For some CFOs, surviving the pandemic was the first rule of order. After that, CFOs needed to prepare for a new landscape.
According to a recent article from Egon Zehnder, below are four trends to watch for the remainder of the year.
The CFO as a Co-pilot
During the pandemic, the c-suite had to adapt to ensure business continuity. The CFO was often the first collaborator the CEO turned to. And the requirement to work remotely forced CFOs to focus more of their attention on soft skills in order to keep employees engaged. While this is expected of a CEO or CHRO, seeing CFOs lean into this type of leadership has shown they are more than just number crunchers.
The CFO as a Flexible Planner
Forecasts and budgets prepared at the end of 2019 or beginning of 2020 were out of date before the end of Q1. Trying to scenario plan quickly became obvious that it was a waste of time. CFOs are used to working with detailed data and have never been faced with this level of uncertainty. Instead it became a process of learning in the moment and showing agility to adapt quickly.
As we get back to a more normalized business environment, the traditional budgeting, forecasting, and scenario planning are able to be put to use. The new leadership skills developed during the pandemic should not be forgotten, “what will remain is a need for much greater flexibility in thinking and acting by CFOs, and for them to be deeply curious in the world around in order to remain agile, pragmatic and open to events and scenarios that were previously unthinkable.”
Getting More Adept at Digitization
Digital transformation was also an area that accelerated during the pandemic. Automation provides the ability to more quickly analyze data to improve analysis and performance. These algorithms will enable better decision making and provide CFOs with data that they can use to make real time actionable decisions.
Champion of ESG and Sustainability
Environmental, Social and Governance (ESG) issues are not new to CFOs, but the pandemic has shown how important ESG and sustainability are to businesses. Investors are also driving sustainability initiatives, and can provide cheaper capital for sustainability leaders as an example. A significant learning from the pandemic was how quickly we can affect the environment. Within days of the lockdown, we saw the changes in air quality. This provides companies with data that they can indeed impact our environment.
Socially, the Black Lives Matter movement that coincided with the pandemic last year, “accelerated societal expectations with regards to companies’ diversity initiatives, and put them under further scrutiny by internal and external stakeholders to drive a transparent and proactive DEI agenda.” And finally, governance in a changing business environment remains as important as it has ever been.
For more information on these trends, we recommend reading the entire article. And if our executive recruiters can support your CFO hiring or training needs, send us a note. The role has certainly evolved during the pandemic, but with the right partner and preparation, those changes can help you thrive in the coming years.