Dive Brief:

• Forty-two percent of companies have returned to, or exceeded, their pre-pandemic operating levels, and most CFOs have become increasingly optimistic, Deloitte's 3rd quarter CFO Signals survey, released Thursday, found.

• CFOs' optimism index rose sharply from last quarter, with nearly 60% of CFOs expressing rising optimism, well above last quarter's historic low of 11%.

• On average, CFOs say they expect to achieve nearly three quarters of their originally budgeted 2020 revenue, though there are substantial industry differences; services, manufacturing, and retail/wholesale continue to struggle most.

Dive Insight:

Despite the positive trends, only 7% of North American CFOs feel the North American economy is "good," and 60% say it's bad. Sandy Cockrell, Deloitte's CFO Program global leader, said this marks the first time the Chinese economy is seen as better than that of North America.

Internally, CFOs are retaining their layered roles as strategist, operations head, and finance leader.

"From a CFO standpoint, the ability to lead and create stability is incredibly important," Steve Gallucci, Deloitte's new North American leader of the CFO Program, said. "Many times, 're-engineering' a plan can be difficult with such uncertainty, and CFOs have an obligation to deliver for their organizations." 

"CFOs are being pulled into many different roles, especially in broad infrastructure planning," Cockrell said. "CFOs are taking what has been learned during this crisis and figuring out how they can be strategic in the future."

"Next-generation CFOs are being taught to expect the unexpected," Cockrell said. "There is a degree of dexterity and nimbleness CFOs need to have."

"The CFO's most important role during the pandemic is to manage costs, cash and liquidity," Gallucci said. "And to spend more and more time talking to employees." Also common among respondents were roles around planning and analysis, such as forecasting and modeling, decision support, and strategic planning, and leadership, including communicating with employees, investors and the board.

Cockrell said the shift towards optimism is a significant trend. 

"If you look at last year's metrics on company optimism and focus areas, more CFOs focused on cost reduction than revenue growth, for the first time in the history of the survey," he said. "This indicates CFOs are pulling levers to continue focusing on growth within the company."

Additionally, as work from home continues indefinitely, organizations continue to rely on CFOs to deliver technological changes, or provide the necessary capital to make investments in tech.

Organizations have asked their CFOs to "become technologists" and make spending decisions on tech, which the crisis has only accelerated, Cockrell said. 

"Tech is so much more embedded in the way companies operate," he said. "CFOs are looking at this as an opportunity to create permanent structures in how they employ their people and utilize their tech in new and innovative ways."

Looking ahead, the pandemic will alter scenario planning, as CFOs begin planning earlier for black swan events, which he defines as events "people think are just impossible to happen." He said the surveyed CFOs have created a mental muscle for adapting and responding that prior to COVID may have been "a bit rusty."

Gallucci believes CFOs will link scenario planning to longer-term enterprise transformation. "They'll take what was learned during this crisis and figure out how that can be a basis for a transformation effort," he said.