Key Attributes of a Rock-star CFO during Covid-19 Times
Saroja Ramadhurai
Economies and businesses across the world, across sectors, are facing huge distress due to Covid-
19 and from all appearances, this impact will likely last at least a few quarters. It is clear that firms
are in for tough times, a survival threat for many and a chance to re-arrange the industry league
tables for others – how can the CFO play a super-charged role in the period to come?
Context
We believe the impact of Covid-19 is likely
to last more quarters, with potential for
repeated lock-downs forced by waves of
infection. India Inc is facing the prospect of
>20% erosion of their FY21 revenues, with
significant erosion of their cash reserves
and consequent erosion of their borrowing
ability.
For the next few quarters, demand is likely
to be impacted and unpredictable for the
next several quarters. At the same time,
supply chains are likely to be stressed due
to weak and unprepared suppliers falling
out while the stronger ones gaining power
and hence being in a position to drive the
market. In parallel, due to continued and
erratic movement restrictions, customer
behaviours and tastes will also be forced to
shift more rapidly than it would have
otherwise. These supply chain disruptions
and changing customer behaviour will affect
different firms differently but will open up
opportunities in terms of markets that are
left open unserved, for the better prepared
competitor to capitalize upon.
In short, firms are in line for tumultuous
times ahead – but the risk also presents an
opportunity for companies to pole-vault
ahead of others and capture the market, if
they play the cards well. What is the CFO’s
role in this chapter? What can they do?
Based on our deep assessment of 500+
CFOs and the client conversation preceding
it, we have put together 6 key leadership
Resource Bridge Perspectives
ingredients or competencies that every
rock-star CFO already has, but which are
going to be called upon more frequently.
The forthcoming period will require all the
CFOs to dig deeper inside themselves and
bring these to the table.
1 Authentic Leadership
This is the ability of the CFO to instil
confidence in the internal and external
stakeholders. CFO is today's second most
important person, after the CEO, in the
organisation but in most cases, he/she is the
most “visible” person, especially to the
external stakeholders. He/she promises
good standards of governance to
government and tax authorities, is the face
of the company to the shareholders
protecting their value and in a lot of cases
represents the company with the industry,
providing thought leadership and initiative
to cause shift in thinking and far reaching
changes through government advocacy.
Across these three roles, a people facing
CFO can drive a far greater impact and up
the game than a equally competent, but
behind-the-scenes CFO. The investors,
rating agencies and shareholders rely on
CFO to base their evaluation. The increased
uncertainty will drive need for reliable and
insightful information on trends and how
these are being addressed, from the
company in the next few quarters and the
CFO’s ability in this regard will be tested
severely. He is the face that interacts with
the Government agencies and industry
bodies to win key competitive advantages
not only for the company, but also the
industry. The CFO also keeps the eye on
compliance and governance, while making
full use of the exemptions not only based on
the current situation, but with intuition on
how the situation could evolve,
benchmarking with the best practices.
CFO is the star of the board meetings and
Audit committee meetings, which are not
just presentation of numbers, and study of
financial performance, but a forum for
larger conversations on assessing the
company’s strength, weaknesses,
opportunities and threats.
Through the internal organisation,
charismatic leadership builds on the
leadership and communication bandwidth
of the CEO/ Promoter, especially in difficult
and uncertain times like the current. This
support is critical with internal stakeholders
where the CFO is able to use every
conversation and forum to communicate
both ways tough decisions, be the channel
for innovative ideas, where he is able to
bring greater detail and risk perspective to
every decision being executed.
Business Decision Support with
2 3
on the ground information
The CFO owns the information on financial
performance of the various products,
businesses and with it, analysis on which
businesses are doing well and which
businesses or products are not. Today with
digitisation, we are seeing a huge change
from a post-mortem analysis to live feed of
numbers and performance. If the CFO has
been able to take the time out to move
closer to the business, has visited the
plants, sales offices or stores and
understands the way the business is being
done and develops it further, he
Resource Bridge Perspectives
can use his strength with numbers to
understand, prioritise and influence which
levers to tweak for maximum desired
impact. In several cases he/she is able to
come up with his/her own strategic
decisions on rationalisation, businesses to
keep, businesses to divest, risks to cover,
investments to make, etc.
No longer is the P&L the sole responsibility
of the CEO. Today the CFO needs to be able
to co-own the P&L, be the CEO’s trusted
confidant and aide and in several cases,
compliment the CEO/ Promoters strengths
and style. Today, in key large Indian
companies or even business houses, the
Group CFO is the next in line to the
promoter, superseding the business CEOs.
Business partnering support of the CFO can
do wonders supplementing the overall
decision-making ability of the leadership
team. As globally we shift from a growth
mode to a survival mode, CFOs can play a
huge role in pushing the pedal on
innovation and rationalisation for survival,
without thwarting business success and
subsequent growth.
Ability to win and lose everyday
This is a key attribute in today’s time,
marked by rapid changes on the demand,
customer requirements, regulatory
changes, financial situation representing
both threats and unexpected opportunities,
such as products and markets not served by
competitors which can be used to drive
market share changes. This will require
agility, in turn, backed by emotional
resilience.
Emotional resilience surpasses competence
by a mile and this is as much true for a CFO
as for any management leader. As losses
mount, planning horizons have become
more stretched, while survival is measured
by the day.
The CFO can play a huge role in converting
losses to key advantages only if he/she has
an internal mechanism to accept losses and
think “what next”. It is very easy for the CFO
to get stuck with numbers and hence
“positions”. CFOs become rock-stars when
they own the organisation’s vision, are able
to propose three solutions for a single
problem and walk away with one, perhaps a
new one which was not among the three!
Instead, the CFO has to be able to look
beyond the numbers, maintain and steer
leadership’s commitment to the vision and
also be a change agent to make structural
and innovative changes. In several cases,
he/she has to be the leader and influence
the board, investors and the promoters to
do the same. This requires a long-term
commitment to the bigger picture that
makes it easy not to be ruffled by daily wins
and losses. Emotional resilience comes from
nurturing a strong self-belief and positive
mind-set which in turn is nurtured by good
work-life balance, energy balancing hobbies
like yoga, meditation, workouts, etc.
Ability to take bold and tough
4 calls in ambiguous situation
Promoters and founders, and in several
cases professional CEOs, get attached to
their ways of working and despite numbers
crying out for tough calls, are not able
commit to them. The CFO in these cases
needs to step up and convince the
leadership on tough and bold calls, and
relentlessly get them executed on time for
the survival of the organisation.
A CFO is paid to understand risk like no
other person and it his/ her job to safeguard
the organisation from current and future
risks. When tough decisions have to be
taken for survival, there is no room for half
measures and who better than the CFO to
know and predict that? More than the
ability to take these calls, the CFO also
Resource Bridge Perspectives
needs to play a very important role in
communicating the same and getting the
internal organisation to buy in to the need
while holding out promises for a better
future. Constant review and improvisation,
with open communication with all
stakeholders can take the punch out of the
blow. Along with other leaders, the CFO has
to maintain the confidence about the big
picture, while executing these calls and
periodically reviewing and re-aligning these
calls as the situation emerges.
5 Ability to conserve, generate
and raise funds
It has always been the traditional
responsibility of the CFO to manage cash
flows and fund flows, accompanied by
ability to raise capital well ahead of time.
The impact of the 50+ days already spent in
lock-down along with the frequent
disruption that we anticipate, is going to
stress cash position like never before, when
not only the firm but also its entire supply
chain is going to be depending upon the
firm to survive. To ensure business
continuity, “cash is king”, not just for firms
in stressed sectors like real estate but
across the industry.
Ability to take a zero-based view on costs
and productivities, right-sizing the firm for
the current period while charting the path
to growth and ability to raise funds for an
extended downtime are going to be on the
plate for every CFO. The CFO has always
been the major player in running a tight
commercial organisation and this comes
into play to keep looking at additional ways
to conserve cash. It is the sole responsibility
of the CFO to ensure that business does not
suffers the least due to cash shortage and
for this he/she has to conserve and raise
cash- on time and with minimum cost.
 6 Ability to leverage and drive With situation evolving every week, there is
digital transformation no excuse for unavailability of reliable MIS
on time. In several cases, it could mean
We have mentioned five strategic roles of the
rebuilding the F&A organisation and shifting
CFOs above, but each one of them is
to different digital platforms and overall
dependent on this one. MIS has to become
digital transformation. Rapidly evolving
live streaming of financial information that
digital technologies today can increase the
enables real time feel of what is happening in
speed with which the information can flow
the organisation and this calls for investing in
at a fraction of the cost of big-box solutions.
the right digital solutions. As one of the CEOs
Optimum spend on technology to raise the
of a technology company said, “My CFO
bar of quality of information is an inevitable
needs to give me the confidence that the
and urgent investment. The CFO has to be
numbers I have are real time and correct”.
able to meaningfully invest in technologies
The stronger the quality of information and
when facing multiple calls on the funds to
shorter the latency, the better will be the
ensure real time examination of outcomes
quality of foresight, decisions and
and seamless decision making.
responsiveness to external threats.

Conclusion

• Across industries and sectors, firms are likely to witness tumultuous times, for the next few
quarters. Firms are likely to witness unpredictable and depressed demand, supply chain
disruptions, significant changes in customer behaviour including a rapid shift to digital
channels – firms, thus, would have to cope with multiple-fold increase in changes, all the while
battling financial stress.
• The threats cited above also imply an opportunity – to shape the market, ride the changes to
customer behaviour, to capture market and use the distress to drive organizational changes to
become lean and mean to achieve a level of P&L and Balance Sheet right-sizing that was not
possible just a few quarters ago
• CFOs have a great chance to demonstrate their leadership quotient. If the finance leadership
community wakes up to this opportunity and steps up, we are going to see a lot of CEOs in the
next 5 years that were CFOs who did their jobs beyond their prescribed roles

About Resource Bridge

Resource Bridge is a specialized executive search firm with offices in Mumbai and Chennai, with exclusive
focus on 4 leadership roles – CEO, CFO and Finance Leadership, CTO/CDO and Head of Strategy.

To know more about us, reach out to saroja@resource-bridge.com

Feedback, Comments? Want to receive future articles? Write to ideas@resource-bridge.com.

Resource Bridge Perspectives

© Resource Bridge LLP, 2004-20