By Jim Tholen, Managing Partner

We CFO’s have to focus on lots of demands and priorities — balancing executive leadership and strategy with financial reporting, capital and fundraising, budgets and performance, compliance, human resources, business systems, and more. Each day, week and month are different based on varying priorities — and that was before a global pandemic.

In our software world, one area of significant CFO focus has been on strategy and growth. But what does that focus mean in a time of accelerating unemployment, and unprecedented declines in GDP?

Putting Employee Health First

First and foremost, employee health and well-being are clearly at the top of our lists. During COVID-19, it’s in a category of its own for obvious reasons.

Each of our situations are different, but anything we can do to help our employees and their families helps our common cause. As you focus on keeping your business core strong, part of that core is being able to communicate and motivate your employees in these uncertain times.

Sharing your pain, discussing the company’s future, and being transparent about what you’re doing to ensure continued success of the enterprise is the big step in easing employee concerns. Addressing possible office openings, adhering to social distancing and safety measures, promoting work from home initiatives (if possible), and offering flexibility in working hours is critical during these challenging times. For remote employees, stressing the importance of mental health and staying connected while apart is also incredibly important.

As you focus on keeping your business core healthy, part of that core is holding on to as many employees as possible.

Managing Payroll and Headcount

It’s an unfortunate truth, but many businesses are experiencing financial hardships. If you find your company needing to cut back, consider asking your executive team if they’re willing to take pay cuts or deferrals to ensure there is no loss in headcount. Sometimes employees are open to doing the same or willing to shorten workweeks. If that’s not on the table, maybe consider moving salary to something more contingent?

If you, unfortunately, need to make staff reductions at any point, consider furloughs if possible. This allows you to keep a relationship with your employees, but more importantly, it will enable your employees to keep their company-provided health insurance.

Crossing the Covid Chasm

When it comes to priorities, company survival is paramount. Survival means ensuring you have the capital sufficiency to cross this COVID chasm with the core of your company intact.

In speaking with many of our clients, investor friends and peers in the software world, this means paring back your revenue assumptions to what is guaranteed and highly certain — at least through 2020. While it’s not an easy task, now is not the time for an optimistic revenue forecast.

Having a realistic view of your revenue (and cash) tells you what your expenses can be, and the sooner you move to that cost structure the more survival ‘insurance’ you buy on the other end.

Imagining a post COVID world

Once you feel pretty locked with your employee and financial strategy, I think there are intriguing areas of strategy that are worthy of time, and if possible, investment:

• Opportunistic moves driven from your area(s) of strength. Others in your industry are feeling the same headwinds as you are. Are there initiatives (perhaps a consolidating acquisition?) that you could execute that moves the needle strategically and financially?

• As an example, in 2008 in the midst of the great recession, we (BroadSoft) acquired in separate transactions our two main competitors, both for very modest consideration (and way less than we would have had to pay just months before) and we were able to further enhance our leadership position in the market and almost immediately increase profitability.

• And I think most intriguing and importantly, start a focused effort to (re) imagine your company’s world post COVID.

• What impact will the health crisis and the economic crisis have on your industry?

• What are the post COVID likely demand dynamics for you and your competitors?

• Will COVID impact your partners and suppliers?

• Are there moves you can make now to anticipate going from playing defense to playing offense sooner than your competition?

Today, CFO’s have a lot to consider. These are difficult times for everyone. I hope all of you are figuring out ways to weather these storms. We wish you, your families, employees and businesses the best during these challenging times.