While many hoped 2021 would be a year of full recovery from COVID, the reality has been more complex. Progress is being made, as vaccination rates slowly rise and public sentiment improves, but we are still a long way from the full economic recovery and return to normalcy that many have suggested. As a sign of caution, this month Goldman Sachs revised downwards its growth prospects for 2022 from 4.2% to 3.8%, thanks to the Omicron variant of COVID. Competent management accounting teams are essential to respond to this changing environment in a way that inspires confidence and helps organizations strategize for the new paradigm.
In fact, there is room for optimism given the new emphasis business leaders are placing on agility for the short term and anticipatory thinking for the long term. This represents a pivot in thought and action, perhaps the long overdue one. At IMA, we champion the need for finance and accounting professionals to move beyond the compliance mindset to engage as full business partners and as strategic planners. future-oriented that use data to anticipate the future. It’s this forward-looking focus that makes management accountants so valuable to their organizations, and I believe 2022 is the year their skills will be best used and recognized.
If I had one prediction to make for 2022, it’s that there will be more uncertainty and risk. Automation will continue to be rolled out in hopes of mitigating some of the risk. A recent Bloomberg The article cited a Federal Reserve survey in which a third of CFOs said they were exploring or implementing automation as a way to mitigate exposure to COVID-related issues among workers. The war for the best talent will continue unabated, as organizations experience labor shortages and the ripple effects of the Great Resignation of 2021. PwC reported in an August 2021 survey for Dive’s CFO, “65% of employees were looking for new jobs and 88% of executives said their company was experiencing higher than normal revenue.” Investing in people and making their organization âthe destination of choiceâ will fall on the shoulders of the CFO.
Part of this investment will involve the need to develop finance and accounting staff for new, value-added activities that can only be accomplished with the help of technology. Blackline recently surveyed CFOs to find skills gaps they identify within their teams. More than a third (38%) of those surveyed said that not all members of their finance team have the general business leadership knowledge or skills required today. A similar number (35%) indicated that not all members of their finance team had the skills to participate in more strategic work (such as analysis and planning). Improving the skills of finance and accounting teams in the areas of technology, data analytics and financial analysis is now a strategic imperative for CFOs.
Another strategic imperative accelerated by COVID is the focus on sustainability for the long-term health of organizations and the planet. COVID has taught us that we are all citizens of the world and that it is impossible in today’s interconnected society to isolate or isolate ourselves from global risks and issues like climate issues (which some have contributed to our vulnerability new viruses like COVID), income inequality or environmental disasters. CFOs respond in the same way by investing in DE&I initiatives to tackle income inequality and by working on sustainability reporting standards. These activities are aimed at the ultimate goal of creating sustainable value for our businesses, stakeholders and the global community.
Finally, if 2021 has delivered a clear message to CFOs, it is that the uncertainty is here to stay. This has implications for how CFOs lead their teams and organizations into the future. Cultivating resilience and agility must be a priority and soft skills such as empathy, active listening and continuous communication are no longer âmust haveâ, but are absolutely essential to unify organizations.
My advice to CFOs by 2022:
Â· Invest in skills building, especially in data analysis. With an uncertain year ahead, the ability to adjust prices, costs, and product or service levels at any time will depend on data capabilities. Leveraging data and collaborating with groups outside of finance (like the data science team) can provide the information you need to make critical decisions. Every member of the finance team should be familiar with data analysis.
Â· Adopt and implement a digital transformation strategy. Digitization has accelerated because of COVID as McKinsey noted. The technology has proven to be crucial in facilitating remote working and providing greater transparency on supply chain issues. CFOs should lead their departments in defining an implementation strategy around the key technologies that are reshaping the business in general and the finance function in particular: automation (e.g. RPA), data analytics, IT based on the cloud and blockchain.
Â· Take up your role in sustainability. The recent COP26 conference on climate issues, where the International Financial Reporting Standards (IFRS) Foundation announced a International Sustainability Standards Council (ISSB) to develop a global benchmark for sustainability disclosure by June 2022, signals 2022 as the year sustainability reporting is embraced by finance. Management accountants, who are responsible for reporting and disclosure, will be key to establishing more transparency and building more sustainable operations within their organizations in a way that translates into strategic action.
Â· Cultivate soft skills to help your employees stay agile: Ask employees to “Adapt to continuous change” (the most important attribute finance teams should have according to a recent EY survey) is not like asking them to perform a cost-benefit or SWOT analysis. There is no manual to guide people through change, but I have seen the importance of emotional intelligence and empathy in leading organizations in times of crisis. Soft skills can sometimes seem like redundant and less important than technical skills, but I would say they are both equally important and every CFO should strive to improve them in 2022.
In 2022, accounting and finance teams will have the opportunity to increase their visibility and value within organizations. Management accountants will be at the forefront of this trend, and I think they are more than ready. While many uncertainties and challenges will face in 2022, they will fall short of management accountants.
This article has been edited and condensed.