Published: 23 April 2020
Analyst(s): Corporate Strategy Research Team
Here’s a roll-up of pandemic-related executive sentiment and insights from thousands of functional leaders across the C-suite.
Fast word on tactics and concerns from thousands participating in our conference calls and polls.
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Will A Second Wave of COVID-19 Crush Recovery Hopes?
Nearly 6 in 10 (58%) of CFOs responding to our snapshot survey are including in scenario plans thepossibility of a new surge in novel coronavirus cases — which might contribute to a W-shaped recovery, characterized by many sectors snapping back on pent-up demand and then declining again.
60% of finance leaders also expect a year over year reduction in earnings (EBITDA) of at least 10% in 2020.
Assessing the revenue impact of a double-dip recession scenario
Re-forecasting how much excess cash will be needed to fulfill supplier commitments while keeping staff employed
Lengthening the timing of worst-case scenarios from 2Q and 3Q of this year to early 2021
Innovation Picks Its Shots and Involves Top Management
Research and Development (R&D) leaders are prioritizing projects which support immediate mission-critical priorities and require limited or no laboratory work. 69% report severe or moderate disruption to lab work:
R&D executives are escalating decision making on initiatives to include top-level leaders from functions including finance, marketing and quality and from business units.
68% have created new criteria to decide which projects to pursue over the next one to two months.
46% have established temporary governance structures and loosened project processes.
Many high capital investments are being delayed, while R&D leaders also seek to protect those identified as high priority projects.
Over half of R&D organizations in our quick poll say 90% to 100% of their employees are working remotely.
IT Security Has Strong Support, But Knock-On Effects From Cuts to Other Functions Could Undermine It
Because data security is such a high corporate priority, especially in a remote-work world, chief information security officers (CISOs) are reporting that their budgets are (mostly) on a firm footing:
60% are accelerating initiatives that they had planned before the crisis.
36% expect to launch initiatives that they otherwise wouldn’t have been able to.
36% expect no change to their 2020 budget.
31% expect a budget increase.
And yet they worry...
As one CISO told us: Information security “may be able to remain whole — there are obvious things like T&E that we can do, small numbers to help the organization. But it’s cuts to the infrastructure and applications organization that I’m very worried about. I’m very dependent on those groups. As they reduce their spend, make cuts to staff and contractors, that makes them less available and creates more bottlenecks to what we’re trying to do.”
Sales Leaders See a Sunnier Outlook Than CFOs, While Considering Layoffs
Chief sales officers (CSOs) forecast April to June revenue declining by 17% on average. There is considerable sector variation. For the full year, sales leaders expect a 13% decline in revenue, reflecting continued hopes for a V-shaped rebound — diverging from most finance projections.
Some CSOs acknowledge they are retaining an optimistic bias because it serves their strategic interests: keeping their sales teams motivated and trying to fend off harsh cuts.
Still, chief sales officers report having to chop budgets by 18% this year on average.
Over 30% of sales organizations say layoffs in their functions are likely to come. That is nearly twice the level predicted just two weeks ago.
They are prioritizing spending on digital technology to engage with customers who are now getting more comfortable with virtual sales.
Marketing Emphasizes Insight Collection That Won’t Fray Customers’ Nerves
Many chief marketing officers (CMOs) have suspended or reduced customer relationship surveys to avoid friction with consumers.
Instead, they too are expanding the use of digital marketing tools to rapidly test new strategies: user research platforms that test COVID-19 brand messaging, for instance, while ramping-up shorter review cycles for real-time tracking of campaigns.
The most common technique, though, is not so high-tech: they are listening to employees who interact with customers:
Compiled by Daniel Ryntjes
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