CFOs today are asked to take on a broader, more strategic role. Sometimes, that expansion of duties includes crisis management. But on the whole, CFO crisis management is happening less often, according to a new survey that says finance chiefs are less likely than they were ten years ago to be needed to respond to daily or weekly crises at work.
Staffing firm Accountemps reports that 49% of CFOs said they dealt with at least one unexpected crisis a week, compared with 80% of executives who said they had such regular crisis dealings a decade ago in a similar survey.
The survey of 2,100 US CFOs shows that 4% respond to an unexpected work crisis once a day, compared with 16% who did so in 2004.
Matt Verbin, CPA, CGMA, said improved technology is one reason CFOs face fewer crises these days.
“We’re in an era now where we’ve got so much more data and better quality data to make decisions with,” said Verbin, the CFO of Tanga, a daily-deal and general-marketplace seller of electronics and other consumer goods. “We’re much more able than we were ten years ago to not only spot but also avert an oncoming crisis through the use of data.”
Verbin also said software advances have made system crashes less likely than in the past.
“Ten years ago, you still had a lot of older, less reliable systems,” he said. “Companies could get in situations where they waited too long to upgrade systems, which could prevent a crash. Back then, it was a much bigger undertaking to transfer data. I’ve found it easier and faster now to upgrade systems. The ability to more easily upgrade will make you less likely to have a software crash or bottleneck that could cause a crisis.”
With volatility and complexity becoming the norm in today’s business environment, it’s possible that the definition of a crisis has changed over the years, said Bill Driscoll, Accountemps’ New England district president.
“Maybe we’re more sensory-overloaded now than we were ten years ago,” he said. “We get so much information, so much detail on so many things. Perhaps some of the things that would have been considered a crisis ten years ago just might not today.”
Driscoll said that CFOs who endured the recession that began about six years ago might have a different outlook on what constitutes a crisis. Still, he said, CFOs today have to be excellent planners to deal with the pace and amount of change coming their way.
Strong risk management can fend off a crisis before it starts, and CFOs who take a strong approach to risk and have sound planning processes are more likely to be high performers, according to an IBM report.
Accountemps offered five tips for managers looking to avert crises or lessen damage when a crisis occurs:
- Create crisis plans. Put plans in place for possible crisis situations and conduct regular drills so your team knows exactly what to do and who to consult in the event of an emergency. This will help your staff stay cool-headed when the pressure’s on, while cutting down on response time.
- Be proactive. Regular check-ins on critical projects can cut down on last-second scrambling. Make sure your team is aligned, is on track, and has the necessary resources and information to meet objectives.
- Establish a culture of transparency. Encourage honest communication amongst team members. Create an environment where employees are comfortable coming to you to admit errors or share concerns.
- Drill down on data. The power of Big Data is that it can help businesses spot problems earlier and be more nimble in making course corrections. Companies that are highly data-driven report improvement in making critical decisions.
- Learn from mistakes. Put key programmes and campaigns under the microscope and strive to pinpoint the root causes of issues so you avoid similar problems in the future.
Related CGMA Magazine content:
“Making Uncertainty an Asset”: Accountants could do more to embrace uncertainty, according to Accenture consultant David Axson, who said finance should be adaptive as it plans for unforeseen circumstances.
—Neil Amato (firstname.lastname@example.org) is a CGMA Magazine senior editor.
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