When Anthony Dombrowik was promoted from controller to CFO of the Red Lion Hotel Group in 2008, he knew the role would be challenging. What he didn't know was that his first year would essentially be a trial by fire, requiring him to navigate through some of the most daunting times ever faced by American business. During Dombrowik's first 16 months on the job, Red Lion's revenues have dropped some 13%, with no recovery in sight. The company has cut 10% of its workforce, including finance staffers, and has combed its operations for any and all cost-cutting ideas, even switching to cheaper guest-room soaps. Dombrowik is thankful that none of the commercial mortgage-backed securities (CMBS) that finance the bulk of Red Lion's business have come due recently — there's no chance of rolling them over when they do — but soon he will have to find a new source of outside funding. At the same time, he is looking for opportunity in the ashes, hoping to grow the business by acquiring or franchising distressed hotel properties that may come up for sale.

Since September of last year, when the bankruptcy of Lehman Brothers triggered the near-meltdown of the nation's financial system, the CFO's role has been reshaped in new and sometimes unnerving ways. Thanks to the post-September credit crunch and steep falloff in consumer demand, thousands of finance chiefs like Dombrowik have restructured their businesses, executed layoffs, hoarded cash, and begged for financing. Many such actions are standard operating procedure in tough times, and some will be reversed when the economy finally turns around. But this recession — the longest and nastiest since the Great Depression — also promises to leave a lasting impact on business in general and corporate finance in particular.

Indeed, more than 85% of finance executives responding to a new CFO magazine survey say they don't expect their companies to return to business as usual after the economy recovers. They predict that substantial adjustments will be necessary, whether that means shuttering business units, responding to new competitive challenges, or dealing with new (and generally unwelcome) regulation.

Ironically, even though the vast majority anticipate what some refer to as a "new normal," nearly half expect their current business model to serve the company well going forward; a substantial number, however, expect their firm's strategy to change once they can shift their attention away from short-term survival (see the full results at the end of this article).

In some ways, the so-called Great Recession is both the best and the worst of times to be a chief financial officer. "You can have much more impact on your business than you could if things were stable and capital was cheap," says Starwood Hotel CFO Vasant Prabhu. On the flip side, "you can destroy a lot more value if you make a mistake." About a third of survey respondents say that the increased work and stress have also brought greater respect and visibility; another 28% say the change has altered the very nature of the job. Current conditions also seem to have bolstered CFOs' job security, as turnover declined by 42% for the first half of 2009 compared with 2008, according to Liberum Research.

One thing is clear: no CFO is likely to forget the hard lessons he or she has learned in areas like cash management, forecasting, risk, and human capital. "Those who lived through the Depression were forever more frugal, and I think you'll see something similar this time" in the business world, says Dombrowik. He for one is planning to retain as much of Red Lion's recent cost-cutting as possible when demand picks up again (although the soaps will likely be upgraded).

Other finance chiefs offer similar perspectives on how they are changing with the times, and which of those changes they expect to stick. On the following pages we present the key lessons they have learned.

Think Differently about Cash and Credit
If the past year has taught CFOs anything, it is to be more skeptical of banks. "Prior to this I never would have envisioned having to worry about the financial strength of my bank group," says Mark Shamber, CFO of United Natural Foods Inc., a $3.5 billion distributor of natural foods to supermarkets including Whole Foods. Now, Shamber carefully tracks the financial reports of the publicly traded members of his bank group, looking particularly for write-offs and to what extent the banks are using funds from the Troubled Asset Relief Program. United Natural's five-year, $400 million asset-backed credit facility is still safe, but Shamber knows he will have to work hard to secure comparable funding before the facility expires in 2012. (Many other companies will be in the same boat, having obtained five-year facilities in 2007, when cheap credit was still available.)

Ronald Mambu, CFO of JBT Corp., a $1 billion maker of food-processing machines and airport-services technology, was concerned enough about his banks to temporarily stop the normal practice of paying down its credit line by sweeping cash from operations. The company maintained that approach through March. "We didn't want to be caught short if a bank said it couldn't honor its credit line," he explains. Where to keep cash has become a matter of concern, too, given the growing number of bank failures (69 in 2009 at recent count, compared with 26 for all of 2008). Safe places for Marvell Technology's $1.1 billion in cash "are still emerging," says Clyde Hosein, CFO of the $3 billion semiconductor maker, "and I still ask the question, Should I put it in a big mattress somewhere?"

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