When presented with trying times, it’s up to the finance team to lead the way. Between the CFO and the controller, this team of professionals delivers the strategy and steering needed to position a business for success. But where are CFOs’ eyes? What can you expect to be on your plate? A recent survey from Deloitte looks to answer.
Deloitte Sees Optimism—but worry
According to the quarterly report on finance leader initiatives and expectations, Deloitte found a few interesting trends. This report, titled CFO Signals, has spent the past decade tracking the thinking and actions of CFOs representing many of North America’s largest and most influential companies.
However, controllers, whose success is based on the steering of the organization, have a lot to gain from this report as well, with the survey gauging the strategic initiatives and expectations. Especially in these times, this report will continue to guide organizations and their finance leaders toward the new reality.
Finance Leaders Still Facing Challenges and Worries
The study, completed in early May, found that even in the wake of optimistic expectations, finance leaders saw escalating worries about the impact of COVID-19 on global economies.
When asked about the larger economic outlook, the results were mixed.
- Seven percent of CFOs rate the North American economy as good, but 60% rate it is bad; those expecting better conditions in a year slid from 58% to 43%. Europe was flat at 2% and 32%. China came in at 22% and 47%—above North America for the first time.
- Less than 40% of CFOs say they expect 95% or more of their budgeted revenue, with the average at 74%. Healthcare/Pharma and Energy/ Resources are the most optimistic; Retail/Wholesale is the least.
- With many worried about additional outbreaks, expectations remain tempered. CFOs’ most prevalent worries are about new waves of COVID-19, more shutdowns, and unstable customer demand. Rising this quarter, however, were concerns that the pandemic might trigger a longer-term recession.
Surprising Optimism?
But it’s not just panic, gloom, and doom. Many finance leaders are seeing a lot of optimism—a rare occurrence in this kind of report based on the circumstances. With reopening taking place, many finance leaders lauded their organizations’ abilities to operate effectively, safely, and profitably as economies continued to reopen. Whether it’s improved sentiment or higher expectations, many see a brighter outlook than the media,
- Many already are expecting a return to pre-crisis levels happening quickly. Forty-two percent say they are already at/above their pre-crisis level or will be by the end of 2020 (up from May and June); still, 25% say 1Q22 or later.
- The proportion of CFOs saying they are more optimistic rose sharply, with the optimism index vaulting from last quarter’s survey-low -54 to +43.
- YOY growth expectations rebounded sharply (but not fully) from last quarter’s historic lows. Revenue growth rose from -8.6% to 1.0%. Earnings growth rose drastically from -18.7% to 3.7%. Capital spending rose sharply from -12.3% to a still-low 0.2%. Domestic hiring rose from -6.0% to 0.2%, and dividend growth rose from -4.8% to 1.1%.
Controllers Make Things Happen: Stay ahead of the Trends with Help from Controllers Council
It may seem like everyone wants the opinion and insight of the CFO—but here, that’s not true. At the Controllers Council, we’re working hard to put our members in control of their lives, careers, and business initiatives. If you’re looking to make the most of the recovery, we invite you to join us. As the leading voice for controllers, we’ve set out to represent the largest group of finance professionals by role. Learn more about joining us here.
Additional Resources
11 Sources of ‘Macro’ Change That Finance Leaders Need to Monitor
The Evolution of the Controller and the Importance of Growth
Layoffs, Furloughs, and Other Paths to Survive: A Controller’s View
