The COVID-19 pandemic has placed extraordinary stresses on many communities — federal CFOs and their staffs included.
Consider for a moment what they’ve accomplished since the pandemic shut down the country in March 2020. Congress quickly passed a slew of enormous relief bills, including the CARES Act, and appropriations bills that dispersed trillions of dollars across scores of federal programs and agencies. Federal CFOs and their staffs worked hastily to get those funds to where they were needed while also following proper oversight protocols and internal controls to ensure fraud, waste and abuse were minimized and funds were not squandered.
To ensure funding priorities were aligned, they collaborated closely with their C-suite peers, using data throughout to inform their day-to-day decisions. They raced against the clock to deliver financial relief while also knowing they had to produce clean financial statements of their emergency spending. They pivoted on a dime to adhere to ever-changing guidance and they continuously updated usaspending.gov and the Pandemic Response Accountability Committee on their activities to ensure needed transparency and oversight.
Federal CFOs and their staffs did all this while working remotely and while helping lead their own agencies through one of the greatest periods of disruption in recent history. And let’s not forget that many CFOs have been operating in an acting capacity and managing through a transition year as well. This past year was anything but “business as usual.”
And their work continues. In the coming months and years, federal CFOs and their staffs will also be relied upon to shape momentous business decisions about how their agencies will recalibrate post-pandemic with regard to office space, technology investments, and other resource and transformation decisions.
CFOs in the post-pandemic era
As challenging as these recent months have been, new research tells us that the traits we saw on display from our federal CFOs and other senior financial managers during this period will likely become the norm going forward.
Accenture’s latest global research on this topic, titled CFO Now: Breakthrough Speed for Breakout Value, finds that the CFO’s role is evolving rapidly in both the government and commercial sectors. Financial leaders are increasing their influence, by optimizing core business and financial processes and by transforming enterprise data into the strategic, real-time and predictive insights they need to navigate today’s escalating pace of change.
The challenges unleashed by the pandemic and the ensuing economic crisis accelerated this trend. The role and scope of the CFO function has expanded to include broader leadership and change agent responsibilities. Especially in the federal government, CFOs are taking on more responsibility to improve financial systems and processes to better serve their agency missions and goals. By automating their operations, becoming more sophisticated consumers of data, and empowering their workforces to expand their capabilities, CFOs are finding they can lead with confidence at a faster cadence that today’s environment demands.
For our federal report – Federal CFOs Leading Through Change – we surveyed 100 CFOs and other senior financial executives across civilian and defense agencies in October 2020 to compare their performance and attitudes against the global baseline of over 1,300 respondents. What we found is that the pandemic has imposed far more responsibilities and expectations upon many federal finance leaders as they help to shape business strategies and bolster enterprise resilience for their agencies.
For example, C-suite leaders expect and need more from them as the pace of change continues accelerating. They are under greater pressure to bring enterprise financial data to bear to improve agency performance. And they must address expanded expectations for more control, compliance, accountability, transparency, and oversight.
An added complication particular to federal CFOs is that they must ensure organizational continuity even as large segments of their staffs become eligible to retire, leaving gaps in institutional and business knowledge. Many CFOs are overcoming these challenges by taking advantage of maturing commercial technologies and embracing more agile operating models.
Our research also found that the pandemic and economic crisis have disrupted traditional operating models for federal departments and agencies — and CFOs have had to rise to the occasion. A majority of our federal survey respondents said they’ve taken numerous steps “to a great extent” to navigate this uncertainty, including:
Embedding a more agile workforce including remote work (55%)
Horizon scanning with senior leadership (51%)
Assessing resilience of third-party suppliers and ecosystem partners (51%)
Ramping-up delivery of short-term forecasts and analytics (50%)
Importantly, many federal CFOs said they view today’s dynamic operating environment as continuing for the foreseeable future. Moreover, 89% agreed that senior leaders’ expectations for finance are fundamentally changing, and 85% said a strong finance function will be needed to achieve their agencies’ ambitions in the post-digital world. Four out of five said they’ll need to continue innovating and enhancing services to the public no matter what happens in the economy.
Another take-away from our research is that successful federal and commercial CFOs increasingly tend to play three distinct roles within their agencies:
As economic guardians, where they lead highly automated, data-driven finance organizations to ensure adaptive, efficient and resilient enterprise operations. CFOs are expanding their use of automation to reduce costs and errors; analytics to maintain more consistent and compliant performance; and training to empower their workforces to deliver more strategic insight.
As strategic advisers, providing targeted insights and modeling to help other C-suite executives improve organizational performance. CFOs are leveraging their unique operational perspective to work collaboratively with peers to assess strategies, mitigate risks, and optimize performance.
As transformation architects, driving efforts to evolve and transform operating models as well as the enterprise’s role in society. CFOs are initiating new efforts to unlock trapped value, operate more digitally, improve societal impact, and rethink the status quo.
As federal finance leaders continue to confront complex and dynamic circumstances while emerging from the pandemic, this model can provide a framework to grow their influence and impact while improving the performance and resiliency of their agencies.
By embracing emerging best practices and operating models such as these, federal CFOs can evolve from the pandemic in a stronger position to lead their agencies in an optimal direction.
Simone Reba is the Accenture Federal Services’ Finance and Enterprise Performance lead and a former DoD Senior Executive and Deputy CFO of the Defense Logistics Agency.