Navigating the Tightrope: Balancing Short-term and Long-term Goals amidst Economical Uncertainties
Nearly all Finance Heads Intend to Decrease or Halve Expenditures to Achieve Immediate Goals
As we approach the halfway point of the year, finance leaders worldwide find themselves juggling between immediate objectives and long-term economic uncertainties. A survey conducted by EY, involving 1,000 global finance leaders, reveals that the balancing act between short-term gains and long-term sustainability has become a crucial aspect of their day-to-day responsibilities.
Priorities in Conflict
The EY survey unveils that over 78% of respondents acknowledge the necessity of balancing trade-offs between short-term and long-term priorities, with a similar percentage (76%) admitting that the challenging market environment is increasing the pressure to drive cost efficiencies and meet short-term earnings targets.
In response to this pressure, a large majority (90%) of finance leaders plan to scale back or halt spending, despite some areas being long-term priorities. The EY data reveals that nearly half (50%) of respondents resolve their short-term earnings goals by scaling back investments in long-term priorities.
For those concerned about their organization's future in the face of potential macroeconomic disruptions, tightening the purse strings might be the only way to maintain the status quo. However, more than two-thirds (67%) of leaders reported experiencing tension within the leadership over the approach to balancing short-term success with cuts to long-term priorities.
Curtailing Drastic Changes and Embracing Transformation
In an attempt to achieve balance without drastic changes, particularly in finance, only 14% of leaders intend to pursue a bold transformation agenda over the next three years. Among the 14% of leaders pursuing aggressive strategies, more than half (55%) believe that cultural transformation is a critical part of their efforts.
The Burden of Traditionalism
Another impediment to a harmonious blend of short- and long-term planning is the reluctance to embrace change, often due to embedded traditional back-office behaviors and mindsets. Nearly three-quarters (72%) of all respondents reported that traditional practices are obstructing companies from modernizing their efforts, with significant resistance towards cultural changes.
Ambition and Skill Gap
Finance leaders today are not only building sustainable, high-performing organizations but also honing their own careers for long-term growth. According to EY, nearly 45% of leaders aspire to become CEOs, so any non-traditional experiences could prove beneficial.
Upskilling and learning are the most significant challenges for finance leaders, as they seek to expand their knowledge and expertise. The most pressing challenge for a finance leader is "finding the time to build knowledge and expertise through exposure to external expertise and access to thought leadership."
In spite of perceived hurdles in self-improvement, many leaders with ambitious plans for organizational transformation remain confident in their ability to identify top talent. Roughly 58% of finance leaders pursuing aggressive strategies are confident in their ability to spot a quality candidate early in the individual's career. This confidence drops significantly for more conservative leaders, with only 43% expressing similar sentiments.
- Despite the challenging market environment, finance leaders are striving to balance short-term earnings with long-term sustainability, as revealed by a survey conducted by EY.
- The balancing act between immediate objectives and long-term economic uncertainties has become a crucial aspect of a finance leader's daily responsibilities, with over 78% acknowledging the need for trade-offs.
- As a result, a large majority of finance leaders are planning to scale back or halt spending, with nearly half resolving their short-term earnings goals by scaling back investments in long-term priorities.
- In the pursuit of balance without drastic changes, only 14% of leaders intend to pursue a bold transformation agenda, with more than half believing that cultural transformation is a critical part of their efforts.
- Upskilling and learning are the most significant challenges for finance leaders, with many aspiring for long-term growth and career development.
- Despite perceived hurdles in self-improvement, finance leaders with ambitious plans for organizational transformation remain confident in their ability to identify top talent, with 58% expressing confidence in spotting a quality candidate early in their career.
