Chief Financial Officers (CFOs) today face unprecedented economic challenges. With high interest rates, persistent inflation, and ongoing geopolitical tensions, the role of the CFO is more crucial than ever. Experience of cycles, experience of having been through challenging forecasting conditions, and leadership skills have never been more important.

The current economic landscape is marked by high interest rates, inflation, and geopolitical tensions. These factors create a volatile environment that demands proactive and adaptive financial management. Trading updates from listed financial services firms provide a snapshot of the current conditions, reflecting both resilience and the need for strategic adaptability​. This reflects what we’re hearing from CFOs in private companies and SMEs who are working through one of the hardest planning and forecasting periods many can remember.

We all know that during volatile times, boards review operations and this needs to be done in the context of what the trading environment is likely to look like over the next 12 months. In all firms, they look to the CFO and their team to, as much as possible, move the forecasting process away from the crystal ball to well modelled scenarios, with strategies to cope and adapt to each possible outcome. At the back of the CFO's mind is the need to allocate capital to long-term value, while ensuring short term needs are met. Of course, divesting non-core assets and business lines can free up valuable capital for more strategic investments. It is extremely useful if your CFO has been in this situation before and are able to ensure the right data and metrics are in place to inform decision making.

We all know that forecasting in a volatile economic environment requires a blend of quantitative analysis and qualitative insights. CFOs have long been calling for more investment in systems, which improve data transparency, and which can speak to each other. Firms who have made this investment are at an advantage, and perhaps after a difficult period like the industry has recently had, the argument for improved systems will be won. Better data gives more context to decisions.

As mentioned, hiring individuals with experience in navigating similar conditions can add significant value to an organisation. Experienced professionals bring practical insights and a proven track record, helping a firm respond effectively to current challenges. Experienced professionals often have a toolkit of proven strategies that can be adapted to the current context. Their past successes and failures provide a roadmap for effective decision-making and risk management. If you don’t have great data, then at least make sure you’ve got a great CFO who has seen it all before!

Those who have managed through previous economic downturns understand the urgency and nuances of crisis management. Their ability to stay calm under pressure and make informed decisions can stabilise an organisation during turbulent times. Experienced hires can mentor less seasoned team members, promoting a culture of learning and resilience. Their leadership can inspire confidence and drive the organisation towards its strategic goals.

Building operational resilience seems to be on the mind of most CFOs we speak to (this is of course also amongst the priorities set by the FCA).  Investing in talent development and retention is equally important in building resilience. Encouraging continuous learning and adaptability helps the team navigate changing market conditions effectively. Providing training and development opportunities ensures that employees are equipped with the skills needed to thrive in a dynamic environment.

Maintaining a strong customer focus is also crucial and part of many firms' plans in revamping their service offering. Understanding evolving customer needs and preferences enables the organisation to adapt its products and services accordingly. Building strong customer relationships provides a competitive edge, even in challenging times.

The role of the CFO is in the spotlight and is vital to steering through economic turbulence. Ultimately, the integration of experienced talent at all levels of the organisation not only helps overcome the current economic challenges, but also prepares the company for future uncertainties, ensuring sustainable growth and resilience.