CFO’s secret weapon against coronavirus: Scenario planning

From CFODive: As the coronavirus pandemic began gripping the United States, Dennis McGonigle, CFO of Oaks, Pennsylvania-based SEI Investments, recalled the advice of his daughter’s field hockey coach: perfect practice makes perfect. 

SEI Investments is a wealth and investment management company delivering infrastructure platforms, solutions and services to financial services companies. For many years, SEI has run practices of business interruption and disaster events, including what they’d do in the case of a pandemic, which McGonigle credits with their largely smooth transition to 100% remote work.

McGonigle spoke with CFO Dive about his company’s business continuity methods and general best practices for providing certainty in an uncertain time.

First and foremost for SEI is the safety and wellbeing of its workforce. McGonigle says the company has 4,000 employees around the globe, operating in places including the U.S., the U.K., Hong Kong, South Africa, Ireland and Canada. 

“If we take care of our employees, we know we’ll take care of our clients,” McGonigle said. 

SEI is a “fairly regulated firm in financial services and the tech infrastructure industry,” he said. “In all of our markets, we’re highly regulated. And since many of our clients are the operational and tech backbone of their enterprises, it’s been a part of our practice for 45 or 50 years to make sure we’re resilient in the event of a crisis.”

But this crisis, being a health crisis, is unprecedented, which makes McGonigle extra grateful for the scenario planning his team has undertaken over the years.

“We run those scenarios, and practice against them,” he said. “We were able to react quickly to this event, because we had good practice habits. I think if any firm is struggling right now, maybe they didn’t have good practice habits over the years.”

“We were able to react quickly to this event, because we had good practice habits. I think if any firm is struggling right now, maybe they didn’t have good practice habits over the years.”

SEI had a particular leg up — they’ve worked with Homeland Security and the Treasury Department annually. The federal departments come up with the scenarios, and SEI plans around them. McGonigle said this collaboration helps the company practice making sure they have the right people in the room and can make decisions quickly. 

McGonigle said he’s had to make adjustments as new developments come about, naming the President’s Sunday announcement about quarantine policies being extended through the end of April. 

“The one thing about practice, and our scenario planning, is that you’ll never guess what the event is going to be, and what’s most important is practicing your ability to adjust,” he said. “That’s a big part of our business continuity planning.”

McGonigle also says CFOs must understand the resiliency of their tech infrastructure. “We’re a large asset manager, so our ability to respond to market conditions is huge,” he said. “And on the market side, if you have a good understanding of your clients’ business objectives, your ability to adjust your portfolio accordingly is key. Technologically and operationally, truly understanding not only your own assets but also that of your vendors or third parties you’re dependent on is crucial.”

McGonigle says he’s very much in tune with what SEI’s vendors are doing in an event like this. “We require our vendors also have robust business continuity plans. We must be confident in how they’ll respond to a crisis like this.”

Every company out there relies on third parties, the way clients rely on SEI, McGonigle said. It’s vital to know how they will weather a crisis, too. 

“The one thing about practice, and our scenario planning, is that you’ll never guess what the event is going to be, and what’s most important is practicing your ability to adjust.”

As long as the duration of the quarantine remains unclear, McGonigle urges CFOs to adopt the notion of remaining socially connected while physically distant.

“Make sure there’s human contact,” he said. “If this event prolongs itself, we don’t want to lose that social connectivity that’s so important in our company’s culture.”

When it comes to their clients, the priority shifts. “We’re heading into quarter end,” he said. “Our message to our workforce is that attention to detail has never been more important. We’re operating with some new workflows that didn’t exist prior. Let’s make sure we’re paying attention to detail, and that we don’t lose our controlled environment in this process.”

McGonigle believes CFOs have a knack for enforcing control and leadership in the work environment, and he hopes this doesn’t get lost in the shuffle. 

“Practice good monitoring,” he recommends to CFOs. “Our responsibility is to maintain the safety, integrity and security of our company’s assets. That hasn’t gone away.”

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