CFO Insights 2021 June has been saved
CFO Insights 2021 June
The Accelerated Future of Work: New Insights for CFOs
CFO Insights is a monthly publication to deliver an easily digestible and regular stream of perspectives on the challenges confronting CFOs. In this article, we provide the insights on 'Future of Work' for CFOs and finance leaders. How are executives and organizations planning for multiple uncertain futures and leading the shift from survive to thrive in this new world?
- Technology alone is not enough
- Developing strategies that value human capital while reaping the benefits of technology
- Thriving in a world of perpetual disruption
The COVID-19 pandemic has been described as creating a time machine into the future1, and its impacts are often defined through the lens of accelerated change. However, the coronavirus and its economic and social impacts require us to navigate so much more than just the accelerated change. The impacts have created such fundamental disruption that we are in fact embarking on a completely new and different world of work altogether – a world in which we must prepare for and navigate multiple uncertain futures and continuous disruption. As we shift from surviving to thriving in this new world, Albert Einstein’s famous words, “you can’t use an old map to explore a new world”, are as relevant and as important as ever.
Deloitte's 2021 Global Human Capital Trends report provides insight into how executives and organisations are planning for multiple uncertain futures and leading the shift from survive to thrive in this new world. The report highlights that the organisations best prepared for the global health, financial, and social equity crises of 2020, were already operating under a “future-oriented thrive” mindset and treating disruption as a catalyst to unlock new opportunity. Leaders in these organisations are more likely to pivot investments for changing business demands, use technology to transform work, and tap worker adaptability and mobility to organise work for rapid decision-making in preparing for unknown future disruptions. Of particular significance, 61% of the executives surveyed said they have shifted focus from optimising work to reimagining work altogether going forward – compared to only 29% of executives who said they were focusing on reimagining work before the pandemic. Putting work reimagination into action – what we refer to as re-architecting work – allows us to fundamentally change the work that we are doing today, how we are doing it and the value it creates, blending human and technology capabilities together to optimise the potential of both, unlocking a completely new and different level of work outcome and value.
1 Slaughter, A. (2020) Forget the Trump Administration. America Will Save America. The New York Times
Technology alone is not enough
For CFOs the status quo will not be enough to thrive in the accelerated future of work. CFOs must reinvent themselves as transformational leaders and re-orient technology investments to drive the shift from a focus on cost efficiency to a focus on value creation, harnessing emerging technologies to transform Finance into a value add service that partners with the business to leverage data and business acumen.
To do this, CFOs will need to shift mental models and traditional approaches away from focusing on optimization, control, and workflow - where the focus for CFOs and Finance may have been pre-pandemic. The digital era for Finance has been driven by new technologies that provide business data and information focused on hindsight and insight. Technology will inevitably continue to shape the future of work for Finance. However, it will not be through technology alone, but through a focus on leveraging technology in the right way to enable and elevate human capabilities, that will position CFOs to create new value and the foresight required in a world of perpetual disruption.
Developing strategies that value human capital while reaping the benefits of technology
The last year of disruption has highlighted that human potential is an organization’s greatest untapped asset. To thrive moving forward in the accelerated future of work requires CFO’s and finance leaders to develop strategies that value human capital while reaping the benefits of technology. Core to those strategies will be re-architecting the work of Finance, unleashing workforce ecosystems, and building adaptive flexible workplaces.
Re-architecting the work of Finance
Using transformative technologies such as cloud, intelligent automation, cognitive computing, blockchain, advanced analytics and visualisation, the work of Finance can be re-architected around human strengths to create new combinations of human and machine collaboration that unlock new value never before possible. Finance leaders can then leverage new workforce and workplace models that redirect workforce capacity to the high-value strategic work that humans do best. That is, the human work at the core of shifting Finance’s focus from hindsight and insight towards foresight moving forward. The work of operational finance can evolve to touchless transaction processing, real-time financial information and centralized finance resources. The value that business finance creates is elevated to providing predictive and insightful analyses to drive rapid business decisions and integrated linkages with operational planning and analysis. And the work of specialized finance shifts to efficient processes and solutions, to a strategic focus on predictive analytics and fortified capabilities to improve agility.
Unleashing workforce ecosystems
The evolution of technology advancements and new combinations of human and machine collaboration will require a focus on the skills and capabilities for the new and future work of Finance. Whether upskilling humans or machines, the path forward will look familiar: build, buy, or borrow. For growing skills, the high cost skills that are cost-prohibitive to acquire and require upskilling (such as data analysis and visualization, business partnering, and knowledge), a “build” strategy provides a cost-effective, efficient method to close immediate high-priority talent gaps amidst hiring and spending freezes. However limited time and resources may underscore the importance of prioritizing critical upskilling requirements. For stable skills, which include the skills, tools and machine learning capabilities available on the open market (such as management reporting, billing, and payments), the increased comfort with remote work allows organizations to “buy” resources from a variety of geographic talent pools. However, hiring freezes may limit Finance’s ability to “buy” talent, depending on the industry, and traditional “build” skills might be now more readily available to “buy” due to the rise in unemployment. For nascent skills, the rapidly evolving skills that do not yet affect a majority of the work of Finance (such as blockchain for transaction processing, systems maintenance), the increased comfort with remote work allows organizations to “borrow” resources from a variety of geographic talent pools and hiring freezes may make “borrowing” internal or external talent more feasible than “buying”.
Building adaptative flexible workplaces
To unleash the potential of the workforce, the future of Finance requires an organization design that is adaptable and meets the need for both efficiency and agility. Where efficiency is the driver, a traditional hierarchy design with centralized functional silos to drive efficient outcomes at low cost will be ideal for functional work such as accounts payable, accounts receivable, cash management, field accounting, standard reporting and tax operations. For Finance knowledge work such as corporate accounting, financial planning and analysis, finance operations, internal audit, specialized tax and treasury, a Centre of Excellence design that provides a centralized pool of specialized resources focused on driving shared goals across the organization will be ideal. For Finance project work such as annual planning and forecasting, finance technology, and strategic planning, a structure organized around multiple cross-functional project teams will be best positioned for success. For the collaborative work of Finance where agility is critical, such as analytics and reporting, business continuity, business partnering, investor relations and vendor management, a mission-based team structure that enables networks of autonomous teams with expertise beyond finance to focus on strategic priorities, will be core to all aspects of success.
Thriving in a world of perpetual disruption
In a world of perpetual disruption, strategic planning must shift from a static point-in-time process to one that is dynamic and embraces continuous scenario planning. This means CFOs and Finance must transform, shifting focus from cost efficiency to value creation and delivering the foresight required to drive rapid business decisions. To do this, CFOs and finance leaders must focus on developing strategies that value human capital while reaping the benefits of technology. To impact the bottom line today and to position the organization to thrive moving forward, it will be critical that CFOs drive those strategies with a recognition that human potential is an organization’s greatest untapped asset.