What We Learned in 2021 That Informs 2022

  • Published: 1/4/2022

The AFP FP&A Advisory Council (FPAAC) met to reflect on 2021 in an effort to prepare for 2022 and beyond. In this discussion among practitioners, the key lessons were around agility and resilience, and taking care of those around you. The resulting conversation reads like a list of new year’s resolutions for FP&A. Enjoy!

The new normal is a lack of normal

“What I have learned in 2021 is that there is no more ‘normal,’” said Scott Corvey, FPAC, Vice President of Finance, Consero Global. “Our economy no longer moves in predictable ways. We should assume our planning process is wrong and forgive ourselves; that will allow adaptation and scenarios to become woven into the fabric of planning on a much higher level than in the past, and we have to do it on a much more consistent basis with more rigor and process.”

“Thinking in the broadest terms, something that became clear to me in 2021 was the importance of challenging past assumptions during a time of high uncertainty,” said Tracy Butler, CTP, CFO, ePac Flexible.

“You can't plan the same way,” said Cathy Jirak, principal and COO, QueBIT Consulting. “We've been focusing on decision-support tools because things are changing at such a rate, you have to be continually planning or continually adapting.”

“Ours is a forever changing environment,” said Kayla Davis, vice president and head of M&A, ABM Industries. “There is no going back to ‘normal.’ What we've learned as a company is to be more flexible, and to get comfortable with making decisions quickly and with imperfect information, which is something that can feel very uncomfortable.”

“We realized how crucial it is to have up-to-date information, especially when doing our budget,” said Kevin Lennon, FPAC, associate vice president of Finance, Aveanna Healthcare. “We would always kick off our budget process in August, and would rely on Q2 results or Q2 data to forecast and budget going forward. That stopped working for us for obvious reasons. We've since built out a BI tool and have a lot more reports. Having information at the ready and as timely as possible has been crucial for us.”

“I learned that wage inflation is really hard to predict,” said Ken Fick, Vice President of Financial Planning & Analysis at Berkeley Research Group LLC. “For the past 20 years, we've had relatively modest inflation in the U.S., and that might be the norm going forward, but I know that planning for that or having scenarios around that has become more important.”

“Now more than ever, we need flexibility,” said Frank Chou, FPAC, CTP, director of FP&A, Nevada Copper Corporation. “The past year taught us that if you’re not prepared and adaptable, then you will suffer. From supply chains to funding to operational efficiency, if you do not have the ability to flex to the demands of the current situation, you will falter.”

“Being in FP&A, you have to operate in the gray area,” said Nikita Miller, FPAC, director of FP&A, The Kresge Foundation. “This past year has really emphasized that. There are so many unknowns, and you're going to have to go back to the drawing board several times, and you're going to have to figure out a way to get folks to buy in to what you're presenting. It's going to require collaboration. I've had to work more closely than in the past with my non-finance colleagues; we try to navigate the best path forward for the organization. It's been one big wave of uncertainty.”

Taking care of your people

“In 2021, we learned that working remotely is possible, even preferrable, and it doesn’t impact the quality of results,” said Chou. “As many were inclined to push for a straight return to the office in 2022, a remote and/or hybrid model seems more beneficial for retention and the sake of continuity.”

“I also learned that working remotely can be extremely productive and efficient, and that a tight labor market requires creativity and a better retention strategy,” said Butler. 

“Our business failed at retention in 2021, and similar results would be catastrophic for 2022,” said Chou. “As vital knowledge leaves and roles go unfilled, the toll of burnout would push the exodus further.”

“Balance is so important,” said Davis. “In 2020, a lot of us were adjusting to working from home, which in theory sounded like it would be better, but I, and so many others, found ourselves tied to a computer on video calls for 12 hours a day. It was draining. It felt like 2021 was about finding the balance and creating the best working environment for ourselves and our employees.”

Uneven workloads are a big concern, and I’m wondering if part of why that’s happening is remote work — managers not being able to properly oversee their teams,” said Betsy MacLean, board member and chairman of the Audit Committee, mCloud Technologies. “How do you accurately assess if you're leading a team who's about to crack because they're working again this weekend, versus others who seem to be getting by for whatever reason, either the workload is uneven or maybe they're just drawing a line and stuff isn't getting done, or it's not getting done well?

“I think people are reluctant to go to their boss and say, ‘I need help. I'm getting through this. I'm not about to quit, but I'll tell you what, if it doesn't get better, I'm going to walk out.’ It feels like that may be part of the genesis of the Great Resignation: I'd rather leave than fight. It's just easier.”

There's a lot of resilience out there,” said Kristine Karlsen, FPAC, Strategy and Corporate Development manager, WGL. “But there's also a craving for going back to some of that ‘normalcy.’ There was a lot of talk in 2020 about being more flexible, then slowly in 2021, we saw that language change little by little, and now we are wanting back in the office full-time unless we have a special agreement.”

Download the AFP FP&A Guide to Scenario Planning to learn how you can advise your organization in a world of changing information and uncertainty.



Copyright © 2023 Association for Financial Professionals, Inc.
All rights reserved.