From Volatility to Vision: How CFOs Can Lead in Economically Turbulent Times

As CFOs anxiously wait for the next ride on the tariff roller coaster, markets and businesses are engulfed in uncertainty, struggling to adapt to the new Trump administration’s evolving trade policies and their far-reaching economic impact. A flurry of Oval Office executive orders have also triggered swift policy and regulatory changes. Adding to the unpredictability are other global events, such as the recent German election results, sweeping foreign policy shifts, and still-continuing ripple effects from Brexit. The constant fluctuations have led to stock market volatility, confusion among consumers, and significant uncertainty for businesses, leaving them unable to plan effectively for the future. From trade disruptions and currency fluctuations to heightened compliance demands, the impact on corporations is profound.

CFOs, given their critical roles in overseeing financial strategy and managing risk, are uniquely positioned to help businesses adapt to this shifting terrain. With the five CFO leadership strategies outlined below, financial decision-makers are positioned to confidently navigate economic complexities, ensuring stability amidst rapid change.

Walking the Tightrope in a Shifting Economy

Global businesses navigating new and shifting policies encounter a host of challenges that complicate their operations and hinder strategic planning. Trade and supply chain disruptions, currency volatility, and regulatory changes require adaptability and vigilant financial oversight.

Significant events like Brexit and the policies from the new Trump administration have redefined global economic landscapes and introduced new complexities for international businesses. In this challenging environment, CFOs must address a variety of critical issues that impact their ability to maintain stability and drive growth. The following table outlines key challenges and examples of the volatility they face.

Challenge	Examples of Volatility
Shifting views on globalization and inward-focused policies compel CFOs to reassess and adapt to changing political landscapes.	In a recent federal election, German voters chose a new direction that will reshape the country's political landscape. The far-right Alternative for Germany (AfD) came in second to the center-right Christian Democratic Union (CDU) and its Bavarian sister party, the Christian Social Union (CSU). This new political climate may disrupt existing trade relationships, create uncertainty for international businesses, and impact both domestic and foreign investments.
	Following a 2016 referendum in the United Kingdom, 52% of voters chose to exit the European Union. The process involved lengthy negotiations over trade, immigration, and regulatory alignment, culminating in the U.K. officially leaving the EU on January 31, 2020. Brexit has had significant economic and political implications, affecting trade relationships, market dynamics, and the movement of people between the UK and EU member states.
Disruptions in trade and supply chains necessitate a strategic and flexible approach to supply chain management.	Brexit has significantly impacted trade and supply chains through added customs checks, new tariffs, regulatory complexities, and labor shortages. These challenges have caused delays in deliveries, higher business costs, and potential shortages of certain goods, particularly for companies heavily dependent on trade with the European Union.
	Within the first month of his presidency, Trump introduced a series of aggressive trade measures, including imposing and quickly adjusting tariffs on imports from major trading partners and longtime allies. These actions, coupled with proposals for retaliatory tariffs, have created an environment of volatility and uncertainty for international trade.
Currency fluctuations create difficulties for accurate cash forecasting and budgeting.	Post-Brexit, the UK pound has shown volatility and is unlikely to regain its pre-Brexit levels due to trade disruptions and high inflation rates.
	The U.S. dollar showed volatility in Trump’s first month in office and declined after the Conference Board’s Consumer Confidence Index dropped 7 points, its largest fall since August 2021.
	The U.S. dollar has traditionally served as a safe haven asset, often gaining value during times of trade policy uncertainty. Recently, however, market behavior has started to change with investors turning to alternative safe haven assets, such as gold, rather than defaulting to the U.S. dollar.
Regulatory changes and rising compliance costs require CFOs to monitor and adapt to these rapidly changing regulatory environments. New tariffs, strict immigration policies, and evolving trade regulations increase operational complexity.	Brexit led to significant regulatory changes in the UK, notably diverging from EU standards in trade, labor, and market policies. The UK introduced its own trade agreements, reshaped immigration rules to prioritize domestic labor, and began revising market regulations to boost competitiveness. These shifts aimed to enhance sovereignty but have also increased complexity and compliance challenges for businesses.
	Since inauguration day, the Trump administration has set a pace that is hard to match with regards to revoking Biden-era actions and taking new deregulatory steps. The Trump administration’s regulatory themes include: immigration and border security; energy and the environment; and a trade platform that embraces tariffs and protectionist policy.

Five CFO Leadership Strategies to Survive Economic Roller Coasters

In a risky economic environment, the CFO’s tactical and strategic decision-making role becomes indispensable to ensure businesses respond effectively to immediate challenges while positioning themselves for long-term success. Economic shifts create a whirlwind of uncertainty, but they also present opportunities for growth if tackled strategically. Here are five CFO leadership strategies to mitigate risks and thrive in this challenging environment.

1. Build Financial Agility

Financial agility gives organizations the power to respond to rapidly changing conditions without compromising core operations. CFOs should ensure budgets are adaptive and allow for reallocations as new opportunities or threats emerge. Other tips to stay nimble include:

• Model various what-if scenarios to manage cash flow effectively, adapt to economic uncertainties, prepare for political impacts, and account for potential changes in customer behavior.

• Incorporate working capital strategies to accelerate cash conversion, leveraging tools such as factoring and supply chain financing. Optimize payment terms to cushion against revenue shortfalls or expenses.

• Prioritize liquid assets in volatile times to remain responsive to emerging opportunities and economic pressures.

2. Strengthen Risk Management Protocols

Building a fortified risk management strategy should be high on a CFO’s agenda. The core objective is to reliably and timely inform in real time the impact of current position and forecasted strategies. The key is to minimize surprises and optimize any impact on financials.

These strong risk mitigation protocols help businesses sustain operations and anticipate many of the issues volatility presents:

• Ensure data integrity and continuous monitoring of world events and the impact on your outstanding portfolio.

• Hedge against currency fluctuations using AI-driven forecasting tools to mitigate foreign exchange risks in global operations.

• Monitor interest rate trends closely as long-term rates rise despite monetary easing. This scenario could increase borrowing costs for long-duration projects.

• Strengthen credit management processes, especially for small businesses facing tighter credit availability.

• Work with procurement teams to ensure diverse supplier networks. Identify reliable local suppliers, reducing reliance on global vendors.

• Maintain a robust liquidity buffer with low-risk assets like money market funds.

• Ensure your business has sufficient insurance to cover geopolitical disruptions, such as supply chain interruptions or damage to physical assets in volatile regions.

Build Resilience by Diversifying Supply Chains and Investing in Regional Markets In an uncertain era, businesses can reduce vulnerabilities and thrive by diversifying their supply chains and expanding into regional markets. Relying on a single country for sourcing exposes companies to risks like tariffs and regulatory changes. By exploring domestic suppliers or sourcing from countries unaffected by prohibitive tariffs, businesses can lower costs and ensure compliance with local regulations, avoiding the complexities of navigating multiple global jurisdictions. Simultaneously, investing in regional markets and forming strategic partnerships can unlock new growth opportunities. Expanding into emerging markets diversifies operations and can also provide access to more favorable regulatory environments. Collaborating with trusted local entities helps businesses adapt to cultural nuances, navigate regulatory hurdles, and build trust with consumers who often favor domestic brands. Together, these strategies create a resilient and adaptable framework for businesses to mitigate risks and capture growth opportunities.

3. Constantly Monitor Geopolitical Risks

Since a single policy shift or trade regulation can have ripple effects on operations and profitability, keeping up with global and local news is essential. To maintain an edge:

• Stay informed with real-time updates on political and economic developments.

• Use AI to summarize daily news events into digestible insights.

• Build scenarios to help you see, decide, and act when the time is right to mitigate impact

4. Leverage Technology to Increase Strategic Insights

Technologies empower CFOs to optimize decision-making in volatile environments with real-time data and analytics, enhancing the ability to anticipate and respond to market changes:

• Implement scenario planning software connected to both internal and external data to model financial outcomes under different geopolitical conditions.

• Use supply chain monitoring systems to detect disruptions early.

• Leverage liquidity performance software to assess risk, connect data, forecast cash, and optimize financial results.

5. Develop a Transparent Stakeholder Communication Plan

For CFOs, communication is as crucial as numbers. Stakeholders want clarity on how companies are adapting to the challenges of a volatile era. Transparency reassures investors, employees, and customers that CFOs have a plan and are proactively acting on it. Keep communications clear, consistent, and solution-focused. Other effective strategies include:

• Update investors regularly with quarterly webcasts or publish detailed reports outlining how the company is mitigating ever-changing economic risks. Clear metrics and tangible plans instill confidence.

• Reach out to employees to explain how changes might affect the workforce, whether through supply chain adjustments or strategic cost-cutting. Transparency fosters trust during uncertain times.

• Engage with the local community to boost goodwill. For instance, if the company is pivoting toward local suppliers due to evolving trade policies, highlight this shift in public communications as a strategy that benefits the community.

Thriving Amidst the Twists and Turns

Navigating the impact of volatility requires clear strategies, adaptability, and a focus on long-term resilience. By prioritizing financial agility, strengthening risk management frameworks, and leveraging liquidity performance technologies, CFOs can guide their organizations through uncertainty while uncovering potential opportunities.

Despite the complexities posed by uncertain times, businesses with strong leadership and informed strategies can remain competitive and future-ready. With a focus on preparation, innovation, and informed decision-making, CFOs can turn challenges into pathways for growth and ensure their organizations thrive in an evolving global environment.