How are CFOs Approaching 2021?

By Nicole Madigan

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The second part in this series, exploring how CFOs and their finance teams are planning and preparing for the year ahead, when there is still so much uncertainty and change.

The CFO Magazine sat down with the finance leaders of four diverse organisations, who shared how their 2020 experience has impacted their preparation for the year ahead.

Penny Votsaris, CFO | Reventon Finance & Investments

Technology implementation, cash flow, and nimbleness were key priorities for Penny Votsaris when managing the fallout from COVID-19, particularly as the company was based in Victoria, which experienced significant lock-downs.

“When Victoria imposed a strict lockdown, many companies were forced to reduce their workforce or hours of work due to reduced cash flow.

“At Reventon, the majority of our decisions revolved around stabilising our financial position, and placing the company in an optimal position for recovery.

“The company had to take actions to protect its staff, clients and the business.”

Votsaris says optimising cash reserves and implementing financial trigger points was critical, as was improved communication within teams, and the allocation of resources to assist with clients experiencing financial difficulties.

“There was much uncertainty which made predictions hard. We were more focused on improving how we delivered our services and ways of becoming more efficient.”

While no one can predict what 2021 may bring, Votsaris is focused on developing a growth strategy plan, and investing in the technology required to support it.

“We are reassessing our risk and reviewing our policies, along with stress testing our strategies for 2021, and streamlining our systems and processes to enable us to act quickly if we need to.

“As our strategies shift, reviewing our cash flow and critical staff roles is also priority.

“Because we don’t know what’s around the corner, we need to ensure that we are nimbler as a company. Our systems and cash flow strategies need to be more robust and we need to ensure that we have the right staff in the right positions.”

Jerome Colin, CFO | Red Bull Australia

While the challenges of 2020 were many and varied, protecting the wellbeing of key stakeholders was the top priority for Red Bull CFO, Jerome Colin.

“Accelerating our actions to protect employees, customers, suppliers, and financial results was critical,” he says.

“Keeping people safe and protecting jobs was our first imperative.

“We also had to consider the financial situation of our customer and find the right balance between protecting our interest and supporting them.”

With the company’s 2020 business plan made abruptly redundant, Colin’s early focus was to build an execution-ready restart plan.

“Amid this period of heightened uncertainty, we needed to rely on a range of scenarios, rather than on individual time-horizon–based frameworks. It also changed our approach to budgeting with much greater use of zero-based budgeting.”

The events of 2020 have prompted a change in consumer behaviour across several dimensions, says Colins, including category consumptions, channel selection, shopper trip frequency, brand preference, and media consumption.

“With some distribution channels more impacted than others, we had to rethink our portfolio priorities and ‘where to play’. 

“Choices to increase our presence in growing markets, channels, and sub-segment had to be made.

“How to engage with our consumer had also to be considered. For example, in the immediate aftermath of the pandemic, consumers spent significantly more time on media, so national outdoor campaign became less meaningful.

“Following the consumer where they were was critical. These shifts necessitated more dynamic resource allocation.”

A pre-mortem analysis helped Colin and his team identify vulnerabilities in current plans, to ensure that regardless of the situation, Red Bull could engage with our consumers and activate relevant assets.

“In 2021, it’s important for CFOs to bring some rigor to revenue and spending management.

“CFOs will need to adopt a transformation mindset when they are setting targets, managing performance, constructing budgets, or challenging their business on growth or expense.

“Implementing rapid zero-based budgeting for all discretionary expenditures, challenging the norm, re-allocating resources are amongst the biggest opportunities for a CFO and his or her finance team.”