Almost half of all adults will make a resolution as we enter the New Year, but research shows that only about 10% will stick to them beyond the first few months.
If you are setting the financial course of 2021, we know there are complex business challenges ahead, but do keep in mind there are also opportunities to be had.
To help you get off on the right foot, here are four resolutions to consider for the New Year.
1. Have a Plan to Thrive
Warren Buffett is well known for his modesty, and his words of wisdom are often direct and anything but sugar-coated. Take, for instance, this statement: “An idiot with a plan can beat a genius without a plan.” It’s an infamous quote that’s since been repeated countless times and for good reason. Adages about planning have long dominated career and life advice. Undoubtedly, you’ve heard the old saying: “Failing to plan is planning to fail.” No matter how you put it, the meaning rings true.
This may seem obvious, however I think this is the first place to start (having a plan). I was on a call with a group of CEO’s recently and to my surprise there was a CEO that did not seem to have a plan to navigate through the crisis, and being that it was December 2020 (more than half a year into the global pandemic) for an organization of that size, I couldn’t help but to think that’s likely where their (and all) CFO’s should start.
Of course, as much planning as you may have done prior to entering 2020, this year for many came down to simply surviving. Start this year with confidence — taking into account everything that’s unsure — and look to create a plan that’s agile, yet directional and performance-based.
A good way to test whether your plan is complete enough is to consider what Multiview’s CFO, Justin Winchiu, was thinking about at the beginning of this crisis, and to confirm your plan address’ the following three questions;
- Can we survive this?
- What do we need to do to keep operating on the other end of this crisis?
- Is this an opportunity for us to thrive?
Sometimes organization’s need to just survive, and a crisis like COVID-19 pandemic is an example of one where it may be in the best interest of the organization to just make a plan to get through this. From answering the “survive” question with your plan, I’d strongly encourage you as the Chief Financial Officer (or in other terms: head of planning) to answer the question around making your plan one that allows your organization to thrive.
By finding opportunities in the challenges that lie ahead, you can ensure that 2021 will be a promising year for your organization.
2. Build the Right Team
Responsibilities are changing. As more automation and technology are integrated into the workplace, along with an increased amount of outsourcing, employees are expected to see their roles change before their eyes. In fact, a recent report from the World Economic Forum (WEF) shares these surprising statistics:
- By 2025, those still in the same roles will see their core skills change by 40%.
- By the same time, over half of all employees will need reskilling.
When it comes to what skills employees will need to gain, critical thinking and problem-solving have long been at the top of the list. In fact, they’ve steadily held the top two positions since WEF published its first report in 2016. However, WEF is now seeing new skills gaining more and more importance. Namely, they’ve identified the ability to self-manage as a top priority, with skills like active learning, resilience, capacity to handle stress, and overall flexibility.
These projections mean CFOs need to take a step back and look at who’s on their team today. Where will they need to be in the next five years to still be effective? Should you hire different specialties or people with other qualifications and characteristics? Ask these questions, and then consider the training, advancement, and hiring initiatives that should be discussed.
2025 may seem like a long way out, but starting to invest now in your talent will pay dividends in the future. As most experienced leaders will acknowledge, one of your most expensive but valuable assets is of course your people.
3. Embrace Technology to Unleash Potential
As a thought leader in the industry, companies often turn to WEF’s reports for revealing insights and statistics about the workplace and its changing architecture. When it comes to embracing technology, they predict that machines and humans will spend an equal amount of time on tasks by 2025. However, this doesn’t necessarily represent a trend toward downsizing.
Rather, the same report states: “Companies hope to internally redeploy nearly 50% of workers displaced by technological automation and augmentation, as opposed to making wider use of layoffs and automation-based labor savings as a core workforce strategy.”
Your organization should see technology as a source of endless potential. Rather than framing it as a way to replace human workers or cut back on costs, look at it as a chance for growth and expansion by utilizing it to further leverage and support the unique talents and abilities of your people.
After all, while it’s an ongoing fear amongst workers, automation isn’t necessarily destined to take jobs — especially in the field of accounting and finance. In my opinion, technology won’t replace accountants, but rather enable them to be quicker and more effective at what they do. Therefore, by CFOs (and their organization) embracing tech across their organizations, it can empower everyone to achieve more.
As outlined in the same report, “The bounty of technological innovation which defines our current era can be leveraged to unleash human potential.”
4. Have an ESG Strategy
ESG stands for environmental, social, and governance, and it represents a set of standards that guide a company’s operations on a day-to-day basis. Today, with more socially conscious investors in the market, it’s becoming paramount that every company has an ESG strategy, as that’s what investors appear to be increasingly using to screen organizations prior to making a deal.
When you come up with ESG criteria for your company, you define how your company will be a steward of a better world.
- Environmental: By considering your impact on the environment, you can support natural habitats and cleaner air.
- Social: By setting social criteria, you can create a healthy company culture by changing how you manage suppliers, employees, and customers, along with the community you operate in.
- Governance: By setting governance guidelines, you will have a better grip on the internal controls, audits, leadership, executive pay, and shareholder entitlements that drive investments.
In my opinion, the days of organization’s releasing statements outlining their focus to be solely of their shareholders interest are soon to be behind us. Not only are investors shifting their focus from shareholder capitalism to stakeholder capitalism, so are consumers. A consumer report last year highlighted this shift with fewer people (44%) recognizing price as the most important attribute of a company compared to environmentally-friendly business practices (71%), social responsibility (68%), and giving back to the local community (68%).
In addition, the number of companies that report on their sustainability has increased over the past decade. In 2019, 90% of companies in the S&P 500 index issued sustainability reports, up from about 20% in 2011.
If you have not already established ESG criteria for your company, 2021 is no better time to start. Make this another resolution on your list and don’t stop here. While all four of these are worth thinking through, you can make 2021 even better by considering all the unique challenges your company has yet to face and the strategies you should form proactively to help you overcome them.