How will you play to win
Managing in Uncertain Times: how will you play to win?
CFO’s need to develop playbooks to ensure the availability of cash and value, navigate the current downturn, renew growth under varied economic-recovery scenarios, and manage risk. Here is how you could get started.
The credit crisis playbook
A critical priority for most CFOs is to assure sufficient cash for their company to operate without interruption. In the current environment, corporate CFOs should immediately secure cash and improve their credit ratings where possible. To this end, several strategies become apparent:
- Draw down lines of credit
- Diversify and secure new lines of credit
- Monitor and manage receivables
- Work closely with suppliers
- Tax planning
The downturn playbook
Forecasting near-term revenues and providing earnings guidance is a key challenge for CFOs. Strong revenue-forecasting tools are essential to successfully managing finances and cash flow. With revenue expectations in hand, there are a number of areas where CFOs can catalyze action and improve overall business operations:
- Enterprise cost reduction
- Procurement
- Pricing
- Financial restructuring
- Mergers, acquisitions and divestitures
- Talent improvement
The recovery playbook
Most recessions since World War II have lasted less than a year, but the current slowdown is expected to continue through 2009. What should CFOs do in this environment? The first thing is to track indicators that provide a likely trajectory for recovery. The challenge for CFOs will be to read the signals and discern the shape and structure of the recovery. Business leaders have the opportunity to consider options beyond the mergers and acquisitions outlined previously:
For more details and ideas on the playbooks, read “Recession. How can you play to win?”
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