If you fail to plan, you are planning to fail. If Benjamin Franklin's aphorism* proves to be true, businesses should be worried by the latest research from Gartner.
The research group says 42 per cent of chief financial officers have no contingency plans for a second wave of COVID-19. That means it is not in the financial scenarios CFOs are modelling for the remainder of 2020.
After speaking to 99 finance leaders during April, Gartner also found that only 8 per cent of CFOs have a second wave factored into all their planning scenarios, and only 22 per cent have a second wave built into their "most likely" scenario.
However, CFOs did express a cautious approach as to when they will fully reopen their operations and bring employees back to their normal office routines, the research said.
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"As CFOs are attempting to project revenue and profits for 2020, it's surprising that 42 per cent are not baking a second wave of COVID-19 into any of their scenarios," said Alexander Bant, practice vice president, research, for the Gartner Finance practice. "Our latest CFO data also reveals that most executive teams are still trying to decide what factors they should use to determine how and when to reopen their offices and facilities."
Despite the lack of contingency planning for a second wave of COVID-19, CFOs have become more concerned about the economic risks associated with the pandemic. They cited "macro-pandemic concerns" as their top worry at more than double the rate they did at the beginning of April, Gartner found. These concerns have grown while fears about revenue losses and employee management issues, such as productivity losses and meeting payroll, have declined.
"Many CFOs seem to be conscious of moving too quickly, with only 4 per cent of CFOs telling us that their organisations will require employees to immediately return to the office, even after receiving approval from state and local authorities to reopen their physical facilities," said Bant.
The CFOs' worries about the "big picture" implications of the COVID-19 crisis are equal to their cash-flow concerns as the most significant cited by the finance bods in April, with each category selected by 28 per cent of those surveyed.
The Guardian has pointed out the precedents for a second wave of the virus. The 1918 influenza pandemic that killed more than 50 million people came in multiple waves, and the second wave was worse than the first. In the 2009 H1N1 influenza A outbreak, a first wave started in April and was followed by a second wave in the US in the autumn.
Maybe CFOs are placing their faith in the plans governments and health organisations are putting in place to avoid a second wave of COVID-19. If so, let us hope those plans don't fail. ®