If there were really such things as crystal balls, during the COVID-19 pandemic they would be in higher demand than toilet paper or flour. Whether you’re re-forecasting your budget in the midst of economic uncertainty or trying to safely plan a family vacation, when it comes to 2020, everyone wants to know – what’s next? Alas, crystal balls are a thing of fiction, so instead we can look to real-life experts to analyze COVID’s impact and help predict the road ahead. With that value of knowledge sharing in mind, GeekWire recently held a virtual CFO roundtable where a handful of finance leaders – including Apptio’s own Kurt Shintaffer – shared their experiences with navigating the economic disruption of 2020 and how they are predicting, and preparing for, the future.
Following are some highlights from Kurt’s responses to questions asked during GeekWire’s CFO Roundtable: Insights on a Changing Economy. Kurt was one of three CFOs participating, but his take is particularly relevant given his role as CFO of a cloud-based financial management software company with solutions that help companies reallocate IT resources and preserve key IT initiatives rather than eliminate them as part of COVID-related budget cuts.
GeekWire: How has the pandemic changed your role as a CFO and what are some of the leadership lessons you’ve had over the past year?
Kurt Shintaffer: One of the takeaways I have sitting here six months or so past the start of COVID is that we all set 2020 plans and most of those plans are out the door. We re-forecasted the business, but I’ll bet most of us were probably wrong as it related to re-forecasting. As CFOs, we sort of got a pass because it’s COVID – this is hard and we don’t know which end is up. But what I see on the other side is boards having higher expectations of us being able to react more quickly when things like this happen. We should be better prepared with scenario planning – understanding what levers to pull, understanding where to get conservative and where to press our advantage. I don’t think we will have the luxury to say, “Thank goodness, most of that is in the rearview mirror.” I will have to say how I would react to some other thing that I can’t even imagine sitting here today.
GW: When you think of long-term planning and capitalizing on opportunities, what is your thinking and how are you approaching that?
KS: We are definitely spending more time emphasizing, going deep, on multiple scenarios. There’s so much uncertainty, I can’t say, “Set the course this way, let’s optimize our plan and our capital allocation around a set of assumptions that we think will come to bear.” We need broader aperture on what could happen. The important thing is, around each of those scenarios you need to understand what levers you can pull – where can you invest more or invest less and remain really competitive. The biggest change we made in long-term planning is not setting a North Star. We are really letting all the scenarios travel with us as we go through our multi-year plan. It’s unlikely the initial course is the one we end up on.
Also, I’m trying to do a better job of understanding what data really matters to the business and what data matters within those different scenarios. Pre-COVID, I was pretty satisfied with data I used to make decisions. But when COVID hit, I realized a lot of the stuff I was looking at didn’t matter as much. The challenge for all of us is asking, “Are the things I’m looking at today going to be relevant to me in all the different scenarios?” Learning and adapting is one of the pillars that will make us better about our long-term planning.
GW: Are there metrics that have significantly changed for how you look at the business?
KS: The business-driving metrics remain most important, whether it’s customer ads or current revenue. But COVID has forced us to look deeper in the business at things that might have changed – such as how quickly a sales rep is ramping or how return on marketing dollars is different from twelve months ago. It’s less about the actual metrics and more about what the data is telling us about how we should run the business and how we should react differently in the future.
GW: How has COVID changed your view on returning to the office in the short term and long term?
KS: There’s been a lot of talk about this. In the short term, the underlying principle is, “Let’s do it in a safe way that works for our employees” – it’s not just about being able to return to work, but let’s think about school situations, commute situations, and other factors. We are in the middle of this and it’s hard to make long-term predictions, but it’s hard for me to imagine things will return to exactly the way they were – there’s no reason people are going to dive into traffic at five o’clock in the afternoon, five days a week. Also, there will be a lot of new recruiting advantages. We can think differently about where we can target candidates.
Long-term, I’m in the camp that thinks there will be a lot of value from getting back to the office. It’s great when employees socialize together – it knits them together, it’s good for culture, good for employee engagement. From a leadership perspective, I value the ad hoc interaction around the coffee machine with that person that I may never be on Zoom with. Through those interactions, I can show them who I am in a way that I might not be able to communicate in a more structured way. I do look forward to when we have more human interaction.
GW: What are the permanent changes that COVID has created for you as a CFO, or what is a silver lining that you’ve discovered amid all the chaos?
KS: For us, the shock to the system of COVID forced us to rethink everything we do in a way that we never would have done organically. We had to rethink where to put employees, how we employ technology to get people to be successful, different sales and marketing processes…we are going to come through this crisis management exercise in a way that forces us to rethink things in a way we never would have otherwise, and we’ll be better for it.