CFO imperative: Planning in an unstable environment


Vikas Mehta

Chief Financial Officer

CFOs establish a North Star for the organization with a financial plan that also acts as a navigation map and a compass for the journey ahead.  

In choppy waters, it can be difficult to look past each new crashing wave. We’ve been living with extreme uncertainty and volatility for nearly two years. The US announced that a record 4.5 million people voluntarily quit their jobs in November as job openings approached record levels. Soaring inflation, and government responses to it, have added significant volatility to financial markets. The fast-spreading Omicron variant and subsequent mutation added another layer of uncertainty to the pandemic. 

Retail is deeply challenged

Retail has been hit particularly hard with supply chain disruptions, labor shortages, and changing consumer behavior adding uncertainty to every layer of decision-making. According to the most recent CFO Survey, more than 90% of retail CFOs say they are experiencing disruption to their supply chains and more than 75% say they are struggling to fill open positions.  

A staggering 98% of retail executives believe that supply chain issues will continue through 2022, according to a survey by First Insight and the Baker Retailing Center at the Wharton School of the University of Pennsylvania. 

McKinsey CFO Survey found that the focus for many CFOs has shifted toward crisis management over strategic leadership, organizational change, and finance.  

There’s an old Zen proverb: “You should sit in meditation for 20 minutes every day – unless you’re too busy; then you should sit for an hour.” I try to implement this in my personal life, and I believe there is a parallel for organizations with the need to stabilize through dynamic, strategic planning.  

Prepare for volatility

To plan for volatility, the following tools have been extremely useful for me and several CFOs that I have connected with:  

  • Zero-based budgeting “lite.” ZBB can help leaders rethink investments and approach budgeting with fresh eyes, and justification, every cycle. While particularly useful in high volatility, it is a major undertaking. Beginning with a ZBB “lite” approach that focuses on the most expensive line items can help instill discipline. 
  • Shorter planning cycles. Does a year from now feel like an eternity with how often game-changing headlines appear? Move the goal line closer by creating half-year or quarterly iterations of the Annual Operating Plan (AOP) so that you can adjust for the unexpected and stay nimble.
  • Rolling forecasts. Stay ahead of the situation by continually updating 18-month forecasts with new information as it arises. Complementing the shorter planning cycles with rolling forecasts creates a much clearer picture of the horizon as events unfold.   
  • Extended planning and analysis or xP&A. Planning is inherently cross-functional. Extending it beyond FP&A to other functions through connected processes and technology is paramount so plans can change in unison. Connected processes and technology help break functional silos with a single source of truth for faster, better execution.
  • Predictive intelligence. Our emotional reaction to events influences our judgment in forecasting. In a volatile environment, it is beneficial to remove human bias, when possible, by leveraging artificial intelligence and machine learning.  

Retail CFOs play an active role in planning for disruptions by ordering goods earlier than they normally would, finding sourcing relationships in different parts of the world, and adjusting budgets for increased shipping costs, according to the Wall Street Journal 

“CEOs are looking for a co-pilot who can synthesize the numbers and craft a comprehensive strategy that integrates customer needs, internal capabilities, and competitive positioning,” Wharton finance professor David Wessels said in a Wharton@Work article. “They are looking to their CFOs to do so much more than collect and report the accounting numbers.” 


Planning is as essential to the health of companies as mindfulness is to our own well-being. Putting in place the right people, processes, and technology, makes us better prepared to deal with the macro-economic volatility we are all facing. How are you planning ahead in these tumultuous times?

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