Transitioning to a post-COVID worldAs organisations begin moving into a post-pandemic reality, how can finance professionals build viability and stability in their organisations?
Now that the immediate impacts of the coronavirus pandemic are beginning to pass and businesses begin to reopen, a deep fissure exists between the pre- and post-COVID business landscape. The current reality of business and the workplace is shockingly different than it was even just 100 days ago.
That upheaval is not over. Uncertainty is now a constant in the global business environment. However, as the pandemic continues to move and change economic conditions around the globe, some organisations are developing strategies to cope with the change and preparing for what may come next.
While it is too early to predict exactly what the post-COVID world will look like, McKinsey recently released a thought leadership piece on the emerging stages of a post-pandemic world for businesses.
In an update to a piece published in late March, McKinsey described five progressive stages of action — the 5Rs — for organisations to follow as they fight to maintain viability and stability in a post-pandemic world: resolve, resilience, return, reimagination, reform.
In a recent videoconference call, members of the Association of International Certified Professional Accountants Americas Regional Advisory Panel (AmRAP) shared their thoughts on where their organisations are in the 5Rs, the strategies they are using to evolve, and the challenges facing their entry into the post-COVID reality.
Evolution is uneven
AmRAP members are finding that recovery is not following a smooth, predictable trajectory, especially for organisations with a varied portfolio of businesses. Every day brings a new set of conditions and challenges, and responding to those changes requires consistent monitoring and communication. Especially challenging is the unpredictability of revenue and cash flow. This is requiring finance professionals to be more agile in their thinking and with their processes.
Quality information is a top priority
With conditions changing so quickly, high-quality, reliable information is essential to decision-making. The pandemic rendered 2020 planning obsolete, and now organisations are revising their plans, often using multiple scenarios, engaging a broader base of managers in the process, and presenting those scenarios and underlying assumptions to boards or designated crisis committees. Especially important is accurate, timely information on government COVID-19 relief programmes such as the Paycheck Protection Program and the Coronavirus Aid, Relief, and Economic Security (CARES) Act in the US or the Canada Emergency Wage Subsidy (CEWS) programme.
Where you and your customers are in the world is a critical element for any move to the post-COVID world. How the local authorities respond to the crisis and its aftermath is also having a significant impact on how organisations are recovering. Where organisations fall on the 5R spectrum depends to some extent on where they are located.
For some, their offices and customer bases are still locked down and seeing significant curtailing of business activity. For others, the crisis has abated somewhat, and locations are reopening and customers are returning.
The geographic disparities are making it difficult to assess the status of recovery and return efforts because different parts of one's organisation may be in different stages based on the situation on the ground. For one US food service executive, restaurant locations are open in some states but closed in others, requiring varying responses for different parts of the country.
Finance professionals will need to take a more nuanced view of geography and local conditions, moving forward because there are no longer one-size-fits-all conditions for business.
Resources need a rethink
Effective resource allocation is shaping up to be a key factor in how far along organisations are in their recoveries, and finance professionals are at the vanguard of directing and assessing resources within organisations.
As organisations stabilise and begin to return, they are taking a long look at how they allocate their resources and how they measure the return on those resources.
For some, the reduction in travel is freeing up resources and creating the opportunity for new technology investments that may have been on the back burner and are now becoming more apparently essential.
Engagement is a driver
The shift to remote work has largely been effective for most organisations, but some AmRAP members are finding that employee engagement is beginning to wane as pandemic conditions continue. Online meetings are fine for a while, but employees are craving personal interaction and connection. Because the move into a post-pandemic world requires agility and communication with employees, managers need to pay close attention to how engaged employees are feeling.
The continuing remote-working situation is requiring that finance professionals come up with new ways to engage employees to foster creativity and engagement, whether it is through online team-based social activities or more personal time with direct reports.
For more news and reporting on the coronavirus and how management accountants can handle challenges related to the outbreak, visit FM's coronavirus resources page.
— Andrew Harding, FCMA, CGMA, is chief executive–Management Accounting at the Association of International Certified Professional Accountants. Nate Fredrickson is the regional vice president, the Americas, at the Association. To comment on this article or to suggest an idea for another article, contact Drew Adamek, an FM magazine senior editor, at Andrew.Adamek@aicpa-cima.com.