CFOs prepare to face a turbulent economy

Finance leaders share what they learned while navigating past crises and what CFOs can do to keep their organizations resilient.
By Andrew Kenney


An overwhelming majority of finance leaders say a recession is coming: About 96% of those polled in the fourth-quarter AICPA Business and Industry Economic Outlook Survey expect a downturn in 2023.

These gloomy predictions have many CFOs and other finance leaders looking back to economic slumps in 2020, 2008, and earlier in search of strategies that can help a company survive economic turbulence.

Finance leaders emphasize the importance of financial strategies like cash flow management, as well as strong leadership to keep teams focused on big priorities.

But they also warn that historical lessons have their limits. In the face of an unpredictable 2023 economy and mounting government intervention, finance leaders are trying to stay nimble and are searching for opportunities to grow even among ominous indicators.


Natalie Heacock, CPA, was beginning to transition into the role of CFO of Patrick Lumber Co. as the pandemic took hold in the United States in early 2020.

“It was March when the world decided to go home — and we didn’t know how it was going to affect us,” she said.

As the economy slowed, the leadership team knew one thing for certain: They wanted to maintain a strong cash position, as they had in previous disruptions.

“For us, cash is king,” Heacock said. “During downturns and during periods where other people are struggling, we’ve been able to really capitalize.”

But other decisions weren’t so obvious. Just over a decade earlier, the Great Recession had badly shaken the construction industry and its suppliers, including lumber manufacturers. Patrick Lumber — based in Oregon — had survived the earlier recession in large part by liquidating large amounts of inventory, among other cost-cutting measures.

In 2020, some of the company’s leaders wanted to move quickly to replicate those defensive strategies.

The Great Recession had been “such a big moment, especially for construction and lumber, that we were all a little nervous,” Heacock said.

But Heacock urged a slower approach, because she saw a fundamentally different economic challenge this time. The earlier crisis had grown over many months as structural problems in the real estate and banking systems revealed themselves. In contrast, the pandemic swept across the nation as an enormous external shock.

“I remember saying, ‘Hold on. Let’s not lay anybody off. Let’s take a little breather,’” Heacock recalled. Then, she facilitated long conversations with all of the company’s leaders, trying to reconcile their differing perspectives.

Instead of replicating its more drastic 2008 approach, the company retained all of its roughly 100 employees and sold off only a limited amount of its inventory — a decision that would prove profitable as lumber prices soon skyrocketed.

“We were very, very busy,” Heacock said, adding: “What we learned in 2008 was definitely helpful, but everything changes.”

The key lesson, she said, is that a defensive, cost-cutting strategy isn’t always the best response to economic turbulence.

She and other leaders say that rings true in 2023, too. Warning signals are flaring — including sustained high inflation, a manufacturing contraction, rising interest rates, and an unsteady stock market.

At the same time, there are signs that supply chain disruptions are finally easing. A tight labor market is driving costs higher for businesses but also shows continued demand for workers. And consumer spending strengthened in October 2022.

As she looks ahead, Heacock is trying to balance the risk of a greater downturn with the opportunity — and the necessity — to continue growing. That means maintaining a cash-rich position and looking for spending efficiencies, but also searching for new revenue.

“I think that if you’re not growing, you’re dying. And so, we are constantly looking — not for the next best thing, but the thing that complements our business,” Heacock said.

Recently, the company has been convening two-hour monthly meetings of the sales and management team. The goal, she said, is to keep abreast of the constant challenges and opportunities of the 2023 economy.

“Every single person gets the opportunity to speak and say, ‘Here’s what I’m seeing,’” Heacock said. “It’s real-time problem-solving.”


Chris Kite is global director of field technical operations for Amazon Web Services (AWS) and a member of the AICPA’s Future of Finance group. At Amazon, she oversees about 250 people who help keep the massive cloud provider running and respond to customer needs.

In 2023, she sees a unique threat from a combination of continued supply chain problems, geopolitical shifts, responses to environmental crises, and the evolving competition for talent.

“Today’s the perfect storm,” said Kite, who is based in California and was speaking as an individual and not on behalf of Amazon or AWS. “I think you can manage any of these individual risks. But now, this is what I consider to be very systemic risk because of the interdependencies within and among these different areas.”

While the challenges may be novel, Kite is relying on overarching leadership strategies that she learned in previous sectorwide and economy-wide downturns, including her work in the defense industry following the end of the Cold War, as well as in the finance sector during the Great Recession.

More than 14 years ago, in November 2008, Kite joined Goldman Sachs as the CFO of real estate. The company and the U.S. economy were caught in the jaws of the financial collapse and the Great Recession.

“They needed someone who could come into Goldman, quickly, and not have any bias,” Kite said.

Having suffered significant losses, the company needed to overhaul its property leases, reexamine its use of existing office space, sell eight real estate assets in Manhattan, and complete a corporate headquarters project.

Kite relied on scenario planning and “ruthless prioritization” to steer her team through that complex mission amid the recession — just as she’s urging her team at Amazon to do today.

“During times of uncertainty, it’s really difficult to have the visibility you want,” she said. Lacking a clear picture of the future, Kite had her team constantly study numerous scenarios. And they planned on a rolling basis, transferring money from one project to another, based on the progress each was making.

“We would rebalance our budget at least three times a year, sometimes four times a year. We were continually moving investments,” she said. “It’s that agility, that flexibility, continuously rebalancing, continuously reforecasting — having the tools in place to quickly do that.”

Ultimately, Kite’s team was able to complete the new headquarters project, running $200 million under budget, and return $1 billion to the organization by renegotiating real estate leases. They also helped Goldman to move back-office functions from high-cost areas like New York City, Hong Kong, and Tokyo to areas with lower costs for the company, such as Salt Lake City, Singapore, and Bangalore.

She believes a similar approach can help with the uncertainty of the year ahead, especially because her Amazon organization spans multiple geographic markets in a fast-growing, complex sector. She’s urging her employees to run more scenarios, ranging from best case to worst case, so that her organization is ready to respond.

She also wants them to spend more time in the field, “getting much closer, observing and listening” for the newest trends and signals. At the same time, she’s working as an executive to get a “horizontal” view of the organization via close communication with other leaders in legal, HR, finance, and beyond.

“During times of change, the finance leader can be the ‘chief future officer’ for the organization, to really help them to solidify what we can see and what we can’t see, and help them understand how our risk appetite may need to be modulated based upon that,” she said.

Kite also said finance leaders can use financial strategies tailored to today’s economy. With remote work accelerating, companies must reassess their real estate strategy. Companies may save costs by rearranging offices, as Goldman did during the Great Recession, but they also must consider how they’ll maintain their presence in different communities, Kite said.

“How will you look at not just your workforce and your real estate footprint, but your entire location strategy?” she asked.

And, like Heacock, Kite pointed to 2023 as a year of opportunity, especially for cash-rich companies.

“When everyone faces a downturn, especially if an organization’s cash rich, it could be a breakaway time,” she said. “They may take this time to hire when other organizations are reducing.”


Inevitably, a recession brings pain for companies and their employees — and that requires a special set of leadership skills, said Lewis Williams, CPA, the interim CFO for the Property Insurance Company of America.

Williams was senior director of global finance for Ally Financial from 2009 to 2012 — putting him at the center of the Great Recession’s economic fallout.

The company had only recently rebranded from its previous identity as GMAC, or General Motors Acceptance Corp., and it had just been licensed as a bank holding company. Meanwhile, GMAC had taken billions of dollars in federal bailout money, and federal regulators wanted Ally to pare down its assets to get rid of “everything that’s not related to auto financing or banking directly,” Williams said.

For Williams, that meant overseeing the sale of several insurance companies. “I had 120 people in five countries,” he recalled. “You’re trying to stay organized. You’re trying to listen to what people are telling you. I was trying to give them what they needed to perform.”

That required constant communication with different markets, attempting to understand the nuances of various corporate and regional cultures — all while keeping employees focused on the bigger goal. That was difficult in some cases. For example, one group had been through multiple owners in just a couple years.

“Employee satisfaction was terrible. You had to say, ‘I had nothing to do with this, but it will be better,’” said Williams, who now lives in Florida. “This too shall pass.”

Williams has since been through layoffs himself and recently had to let 60 people go from a previous employer because of changes in the insurance market. Sometimes, he said, leaders can only offer reassurance and a vision for the future — to others and to themselves.


The same attitude can help finance leaders facing tough times in 2023, Williams said. Beyond dealing with numbers and plans, they can listen to employees’ concerns about the company itself, make changes where possible, and acknowledge difficulties that can’t be solved.

Pamela Oberski, Dow Inc.’s finance director for North America and a member of the AICPA’s Future of Finance group, is similarly applying personal leadership skills to keep her team focused and motivated.

“You have to look at your team and understand the dynamics there. With any kind of downturn, you need to acknowledge your team might be feeling anxious and stressed. If you have new employees, they may not have gone through something like this before,” said Oberski, who is based in Michigan.

Those anxieties can be addressed in part with regular check-ins. Leaders, she said, should ensure that both their employees and they themselves are taking time to “refresh and recharge.”

At the same time, she said, CFOs should help their team members to understand the company’s overall strategy to survive the downturn.

“Are you focused on sales, collecting cash, working capital, maintaining a strong balance sheet?” Oberski said (see the sidebar, “What’s Next? Cash Flow and Pricing”). “Helping your team connect the dots to how they contribute to those broader business goals is important, and it helps them understand their own priorities. ‘This is our focus, this is what we get done, this is our role, this is how you contribute.’”

Encouraging and acknowledging contributions to those larger goals can help keep employees engaged and motivated, even when a company pares back on raises and bonuses, she added.

Kite of Amazon offered a final piece of advice. No amount of data and analysis will ever provide an ironclad strategy, especially in times of economic disruption.

“Be secure in self,” she said. “Attempt to be as data-driven as possible, and still recognize there’s an art to what we do that relies on our intuition and on our gut, and that it too has to be trusted, especially in times of uncertainty.”

Sometimes, the missing piece is simply the wisdom that comes with experience — even when you’re not sure what to expect.

What’s next? Cash flow and pricing

Jami Johnson, CPA, is a partner of the accounting firm Peters, Johnson, Staley & Co. CPAs, which provides virtual CFO services for small and midsize businesses, many of which are in service-based industries.

She’s advising her clients to think carefully about cash and pricing.

“Cash is king. Everybody wants to know where their cash is,” she said. Besides drilling into their books, her clients also are analyzing where they might make cuts, where they can save money, and whether they have access to financing.

“We highly advise that people have contingency plans. Make sure that everyone’s got a line of credit. We don’t want to tap it, we don’t have to tap it, but just in case you need it,” she said.

At the same time, she’s helping businesses plan for further inflation in costs as well as rising interest rates. “Are they entering into long-term deals?” she said. Giving the example of an office lease, she asked, “Am I locking into something that’s good and competitive?”

Finally, she advises business leaders to take a close look at their pricing. Rather than continuing to make “nickel and dime” adjustments that may frustrate customers, Johnson tells her clients to consider a larger increase that will give them a cushion to absorb future cost increases.

“You’ve got to be competitive in your pricing, but you also have to be forward-looking,” she said.

About the author

Andrew Kenney is a freelance writer based in Colorado. To comment on this article or to suggest an idea for another article, contact Courtney Vien at


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4 Ways Leaders Can Improve Enterprise Risk Management,” AICPA Insights, Dec. 12, 2022

Improving Forecasting for 2023 and Beyond,” FM magazine, Dec. 9, 2022

Podcast episodes

Future of Finance Takeaways: Talent, Transformation, Trust,” JofA, Dec. 14, 2022

Why CFOs Have Confidence in the Midst of Difficult Economic Times,” JofA, Sept. 8, 2022

Where to find March’s flipbook issue

The Journal of Accountancy is now completely digital. 





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This comprehensive report looks at the changes to the child tax credit, earned income tax credit, and child and dependent care credit caused by the expiration of provisions in the American Rescue Plan Act; the ability e-file more returns in the Form 1040 series; automobile mileage deductions; the alternative minimum tax; gift tax exemptions; strategies for accelerating or postponing income and deductions; and retirement and estate planning.