Most organisations did not have a global pandemic scenario on their strategic scorecard or built into their strategy.
By now, it should be a firm fixture in our strategic-risk reporting and backed up with key scenarios, exploring possible directions as organisations move from a lockdown state into a post-pandemic world. However, it’s been interesting to see that some organisational strategies have not significantly changed or had their target objectives adjusted to reflect the new environment.
In a pandemic, strategic thinking is very important — and very challenging.
One reason that strategic thinking can be challenging is that individuals confuse tactics with strategy. In times of complexity and with situations changing rapidly, it’s easy to go into autopilot — our brains go into the ‘fight or flight’ modes of survival, and we don’t properly assess the changing situation. We fire from the hip, focusing on internal operations that can be cut or reduced without linking the activities to the organisation’s strategic objectives.
The pandemic has revealed that we need a more creative, strategic way of problem-solving and the ability to experiment with a range of scenarios for our organisations’ futures. This means taking time to think strategically, not reactively.
In the paper Re-inventing finance for a digital world – The future of finance, research identifies the characteristics of high-performing organisations.
The deeper dive into strategic thinking reveals that when finance functions lead the way in defining and reporting strategic key performance indicators (KPIs), (38 percent of respondents) were more likely to describe themselves as being in ‘high-performing companies in highly competitive industries’. Strategy teams within these organisations were also likely to report into the finance function, and their diagnostic processes were more likely to be ‘somewhat automated’.
In the pandemic these high performing organisations, with strategic thinking finance functions, are more adaptable and able to rethink their business models to meet new challenges.
The evidence from the research is encouraging — finance teams who drive strategy and implementation are delivering better business results.
It’s also encouraging to note that 44 percent of finance professionals are already taking the lead in performing scenario analyses for their organisations’ strategic initiatives. This demonstrates the increased value that finance functions can deliver when given the strategic mandate.
Additionally, in Re-inventing finance for a digital world – strategic thinking supplement, you’ll learn about how strategic thinking and decision-making are changing in a digital world. The paper:
- Describes the vision for strategic thinking and decision-making in a digital world
- Details the challenges organisations face in a digital world
- Describes the implications for the finance role and the performance required to meet challenges
- Profiles the changing skills, competencies and mindsets that finance professionals must adopt to ensure you can address the challenges
Let’s take time during the pandemic to recreate organisational strategy and play into our creative strength.