The events of 2016 have no doubt shocked many businesses into reassessing their strategies and outlook, but there is more uncertainty to come. We live in a time when change has become the new norm. Whether an organisation faces major political change or sudden swings in the economy, it must be quick to adapt. Finance leaders were already under considerable pressure to modernise business processes and help their organisations stay ahead of disruptive competitors. A slump in oil prices and the recent EU referendum vote in the UK have only piled more pressure on CFOs — chief financial officers — to successfully lead their organisations' strategy in a constantly fluctuating economic climate. These leaders have too often been portrayed as reining in costs at every opportunity, but in an uncertain economy their role is more nuanced. In this volatile market environment, standing still is the equivalent of moving backwards. Some of today's most successful companies launched in the wake of the 2008 financial crisis, jumping on changes in consumer habits and implementing processes that were agile enough to adapt as they grew. Finance leaders understand that they cannot be caught in the headlights while competitors continue to chase disruption and expansion. Forty-two per cent of finance leaders plan to invest in growth if there is a strong business case for doing so, even if they are also being more cautious, with almost one third (29 per cent) committed to making major investments. This is compared with 22 per cent who admit that they are cutting spending to the bare essentials. While this might seem prudent, it is a short-term solution. It will be near-impossible for the overly cautious to keep pace with more ambitious competitors if they wait for the dust to settle on current uncertainty. Even those businesses with a more cautious outlook understand this and will strive to quickly assess their options before chasing growth, albeit more strategically. Strategic investment and sound decision-making have never been more crucial as the changing economic and political climate drives significant disruption and consolidation across the business landscape. Forty per cent of finance leaders expect to see more companies struggle and go out of business in the next year as a result of economic uncertainty and market change, with 69 per cent therefore expecting to see more mergers and acquisitions in the coming year. Now more than ever, organisations are conscious of the fact that choices made in the coming year may have make-or-break implications and are increasingly relying on the steady hand of the CFO to guide them. Sixty-one per cent of finance leaders say their role is more focussed on forward planning than ever, and 56 per cent say it now predominantly involves advising the business on achieving its growth goals. The most successful finance leaders thrive when faced with strategic challenges, so it is hardly surprising that 55 per cent say their insights have never been more valuable to the business and that they find their job more rewarding as a result. For the CFO who favours a quiet life, the economic uncertainty and political change that have defined 2016 have certainly disrupted the peace. In the years since the 2008 financial crisis, CFOs have established themselves as go-to people for key strategic insight. Now comes the first major test of their expanded skillset. This takes more than transformational processes and technologies. It requires a cultural shift that begins at the top with strong leadership and trickles down to every member of the workforce. Finance professionals can bring their experience to bear on smarter planning and more agile risk assessment, and in doing so cement their role as true business leaders. The writer is vice-president for digital finance at Oracle.
