We didn’t make it to McKinsey’s Global CFO Forum in London this year—perhaps we should’ve tried stowing away, like Paddington Bear—but thankfully, McKinsey offered up Andy West, who leads the firm’s global strategy and corporate finance practice, to hit us with the highlights. Spoiler: The job ain’t getting any easier anytime soon.
West said one of the biggest takeaways from this year’s forum was “the concept of uncertainty, and managing and navigating through uncertainty.” Indeed, the global economy is faced with ongoing geopolitical tensions, new US-imposed tariffs, an AI boom, and much more. Business leaders are being tasked with thinking through the “fundamentals” of their organizations and how to adapt to a rapidly changing macro environment, he noted.
“CFOs are really at the forefront of having to make those decisions,” West told us.
Changing tactics. As a consequence of all this uncertainty, finance teams may have to move away from traditional budgeting and forecasting paradigms and become more nimble in adjusting expectations.
“A lot of organizations are suffering right now because, frankly, annual budgeting processes just don’t work for parts of the business anymore,” West said. “And it’s because of this uncertainty that the cycle time of decision-making in many situations is having to increase considerably.”
Being nimble means getting granular. It’s not enough for the CFO to monitor growth on a high level in a particular geography, he said; they now need to know “by product line, by customer segment, by supply chain” what’s happening there.
Some organizations are also splitting budgets based on length of cycle time.
Though West made clear that not everything in the budget needs a faster cycle time. “There are parts of your business that are just trucking along, and frankly [for] many of my clients that percent is still very high,” he said.
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Budget areas that will be significantly impacted by policy changes will need to be revisited on a monthly, as opposed to annual, basis. West pointed to the Trump administration’s executive order on “most favored nation” drug pricing as an example, which aims to ensure that US citizens aren’t paying more for prescriptions than they would be in other economically comparable countries. If implemented, the policy will have a “fundamental impact” on drugmakers and their budgets, West said.
“When that happens, I need to have a conversation about my exposure in the areas where my exposure is the greatest,” West said. “That’s not ‘let’s wait until budget season to do that.’ We have to do that now.”
Embracing our robot overlords. In addition to trade tensions and major policy changes, CFOs must also buckle up for the AI takeover.
“AI is absolutely an inevitable fact of life, particularly in the finance function,” West said, adding that AI use cases in finance are “literally everywhere,” including FP&A, forecasting, budgeting, reporting, and even strategic decision-making.
West recommended that CFOs get some hands-on experience with AI to see “how it works, and how [AI] agents work, and how agentic workflows actually come up with a budget.”
Finance leaders must also be patient when implementing the technology, because the ROI won’t always be immediate or obvious.
“What you’re seeing is an explosion in use cases,” he said. “What you’re not seeing in most cases…is the value coming out yet. Why? Because it can take a lot of time for these use cases to become commonplace and to actually change real workflows [and] change governance to the organization, but those changes are inevitable, so be patient.”