The Evolution of the Workforce

Evolution is typically energised by a single but significant change, the effects of which are radical but slow coming. Language, the ability to walk upright and the introduction of money each happened in pockets spread over land and generations. Yet now we’re being hit by numerous and instant technological changes that affect us worldwide, and employers are struggling to keep up.

“Due to exponential technological disruption, digital can completely transform a business within a year,” warned Nils Michaelis, Managing Director for Digital within the APAC Products Operating Group at Accenture.

Speaking at Criticaleye’s Asia Leadership Retreat, held in association with Accenture and CEIBS (China Europe International Business School), Nils went onto explain how another important factor — the consumer — has been a catalyst for the creation and evolution of many jobs, even among the top roles.

“A couple of years ago, the then CEO of Macy’s gave himself the title of Chief Customer Officer and was one of the first CEOs to do so. This got the whole company to rotate towards being customer-centric,” Nils explained.

From a leadership perspective, the difficulty lies in creating a talent pipeline that is able to deal with these changes. “As leaders, we need to turn our attention to how we bring the workforce together, and how we reskill them,” said Chris Harvey, Managing Director for Financial Services across APAC at Accenture, who led the keynote address.

However, in a Criticaleye survey of attendees at the Asia Leadership Retreat, only around half said their executive team are collaborative and 85 per cent said the behaviour of their executives can create silos.

While it’s a global business issue, it’s particularly important in Asia where talent is in dangerous demand, competition has led to high staff turnover, and many of the family and founder led businesses aren’t doing enough to train and promote talent. So, how can we progress?

From aptitude to attitude

For many business leaders, including Alan Armitage, CEO for Standard Life (Asia), the spotlight has turned from highlighting an employee’s functional aptitude to their attitude.

“I used to focus on the project plan, but realised more effort had to be put into behaviours and people,” said Alan. “We’ve put a strong emphasis on behaviours, both individually and collectively, especially on whether we have the right blend of individuals within the team and if they will work together in a productive manner.”

In her work with businesses both in the UK and Asia, Jamie Wilson, Managing Director at Criticaleye, has found that “high performing teams show collaboration, innovation, trust and the ability to handle the ambiguity of change”. She added: “It’s these traits that will see them through today’s fast-changing business environment.”

Alan recognises that in order to attract the best talent, Standard Life needs to offer its staff the opportunity to develop in a way that suits them. By doing this, the organisation will also reap the benefits of having a diverse range of skills across its workforce.

“The next generation have less affiliation to the company itself but more to those that develop their skills and brand at a personal level,” Alan noted.

“Every single member of our team has an individual development plan. Those plans need to be absolutely distinct from the individual’s day job and their performance-related plan. They are focused on where the individual would like to be in three years’ time. They need to be challenging and also outline the steps an individual needs to take.”

The fluid workforce

Leaders must acknowledge their workforce will be more fluid than ever before; that may mean hiring more people on a part-time or consultative basis, and also acknowledging that an employee’s development might result in them leaving the company.

This is something Criticaleye Board Mentor, David Comeau, realised back when he was President for Asia Pacific at Mondelez International. Rather than being afraid of the fluid workforce, he saw it as a way to improve the company’s reputation as an employer.

“People need to own their own career and development,” said David. “We realised people would leave the company, so we told them we would celebrate when they leave − but also when they return.”

David explained that three-years ago the company launched a programme through social media that openly recognised employees who chose to develop their careers by moving on. “This allowed both us and them to promote their skills and success to those outside of the business. It’s helped their development while also getting the word out on the great things going on at our company,” he said.

Planning ahead

This kind of attitude teaches leaders to embrace, rather than fear, mobility and succession planning. Indeed, it’s an increasingly crucial way to manage tomorrow’s liquid workforce. “Succession can be a great exercise as it forces honest discussions about building the team,” said David.

Neil Galloway, Executive and Group Finance Director at Dairy Farm Group, said that “we’re increasingly trying to learn from exit interviews with people who we didn’t expect would leave the company”.

One of the things he discovered was that employees wanted to see there are opportunities for them to grow within the organisation. “In some cases, we had to create mobility through forced changes in order to make room for talent to move up the business. This has meant putting all roles − including mine − into a succession plan. It was a surprise to some that I was already talking about finding an internal successor within a few months of joining the group, but it sent a strong message,” Neil explained.

Although the requirements on your workforce – be they skills or entire roles – are both changeable and unpredictable, your employees will want reassurance.

“You need honest, transparent discussions with external candidates, so they understand the situation they are signing up for,” said Neil. “And you need to give colleagues candid feedback on their capabilities and potential, both the opportunities and limitations.”

These views were shared during Criticaleye’s Asia Leadership Retreat 2016, held in association with Accenture and CEIBS.

By Mary-Anne Baldwin, Editor, Corporate

Do you have any experiences of the changing workforce you would like to share? If so, please email maryanne@criticaleye.com

Read more from our interviewees as Nils Michaelis discusses the customer experience and Alan Armitage reveals how to motivate the executive team.

And, don’t miss next week’s Community Update on how to tackle international expansion.

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The Evolution of the CFO

Chief Financial Officers (CFOs) have a big job on their hands. Increased regulation, competition and access to real-time data mean they are expected to be proactive strategic partners. Criticaleye spoke to a number of CFOs about how they are using financial insight to drive the business forward.

“The role of the CFO has changed significantly and they have become much more influential when it comes to business strategy and planning,” says Andrew Minton, Managing Director at Criticaleye. “Digital technology is enabling the CFO to transform their function from being expense and accounting focused, to one centred on predictive analytics and collaboration with other functions.”

In Criticaleye’s Eye to Eye video series, in association with Accenture, we asked a number of CFOs from large corporates how digital technology is transforming the finance function and how they see their role evolving. Here’s what they had to say:

Stephen Daintith
Group Finance Director
DMGT

Our technology development spend was around £15 million over the five years to 2010, in contrast over the next five years we will have capitalised and spent in excess of £300 million. There has been an enormous acceleration to keep up with competition, develop our products and to innovate stronger and harder than ever before.

That puts challenges and responsibilities on the CFO to ensure we’re always spending the money wisely, getting involved in the debate, understanding what it is we’re building and what the payback looks like, as with any sort of investment appraisal.

There’s another topic that’s come up – which is brand new for me and will be for many CFOs – and that’s the notion of measuring your technology debt. This is the understanding of your IT systems across an organisation and the cost of replacing or upgrading them. It isn’t recorded on your balance sheet, but is a contingent liability.

What’s also interesting is how we’re evaluating acquisitions. The technology assets they bring to DMGT is high up there on the list of reasons why we would acquire; it’s not just about the products or revenue streams. Technology is affecting us and it’s a case of CFOs having to learn fast.

One CTO gave me some good advice and said: ‘Ask more simple questions: ask why, how and what? And don’t accept our answers.’

Technology is a space where jargon can be used, so ask the common sense questions and flesh out real issues.

Patrick Lewis
Group Finance Director
John Lewis Partnership

I would pick three different lenses where I get the most value from technological improvement. The first [is about] our customers and making sure that we’re investing in the right place based on our digital understanding… That helps me with capital allocation and getting the best returns, so that we can provide the greatest service.

From an employee perspective, over the last five years we’ve managed to drive interaction with our partners… in a way that reduces the amount of time they have to spend on administration. This, in turn, increases the amount of time they provide adding value to the business [thus] enabling them to earn more. That’s very important, as a co-owned business my goals are slightly different from the CFO of a standard Plc.

Last but not least, the digital understanding right across our P&L helps us drive productivity. So, [to take an] example… the process by which we interact with our suppliers to pay them… used to be a very manual process, with different [procedures] right across the business. We have [now] put in [place] a number of systems that have standardised that, [allowing] us to manage the process all the way through our [supply] chain.

Simon Dingemans
CFO
GlaxoSmithKline

Enhanced digital capabilities across the company are transforming the way in which finance can engage with the business. In a traditional model of finance systems and finance IT, it would have been about controls and governance; it clearly still needs to be about those things, but you now include a much more comprehensive, capable analytics platform.

This allows you to engage with the business in a much more real-time environment. I think that is really the challenge: how do you think about the speed at which you need to make those decisions? You can invest exponential amounts in trying to accelerate that speed and, at some point, the trade-off and the value in that is questionable.

How you use data is also increasingly important. Many CFOs have invested in new systems and more standardisation, and GSK would be no exception. What you want to do is allow the whole business – not just the finance people – to see that data, understand it, interpret it quickly and in a practical way.

Stephen Jones
Former CFO
Santander UK

There’s a huge opportunity for the CFO to be able to drive their immediate business requirements in a manner that is better integrated across the firm.

Many of the requirements for a CFO… relates to ensuring that data is available in a manner that addresses accounting, capital, liquidity and other regulatory reporting requirements. [However], if you think beyond those narrow requirements it’s the same data that is driving credit risk, market risk, operational risk and could be driving customer relationship management.

I think the role of the CFO in relation to data overlaps very strongly, particularly with the roles of the Chief Risk Officer (CRO), Chief Technology Officer (CTO) and, to an extent, the Chief Marketing Officer.

Being digitally savvy and able to think about data in a manner [that] is based around golden, bullet-proof sources, [as well as] creating digital architecture which is being updated all the time with the latest requirements, are incredibly important skills.

CFOs need to become better at commissioning and executing data-related projects. The standoff I often see between the CFO and the CTO is [when] the CTO says: ‘You asked me to do this so I did it.’ Probably what the CFO asked [was] the wrong thing because they didn’t understand [the wider outcome]; they weren’t thinking beyond their own narrow scope. [CFOs need to be] lateral [and] understand the potential of technology.

Julie Brown
CFO
Smith & Nephew

There has been a big change in the role of the CFO. Previously, say ten years ago, the CFO would be a traditional accountant; they would know reporting, accounting standards and what you may call the finance specialisms, [such as] tax and treasury, extremely well.

The CFO of today is much more focused on business strategy and performance… The profile of [those] being sought after for CFO positions are now business orientated and commercial. When you think about the future… with macro-economic issues and [the fact that it’s harder to grow] in established markets, there’s an increased focus on cost, efficiency and resource allocation.

The CFO is ideally suited [to partner with the CEO in order to grow the company] because of their lens on the business and the numbers.[They can help an organisation to look] at the levers by which performance can be improved; I think that’s going to continue to become more important.

Getting top-line growth… requires someone that understands the business, looks at the granularity of the numbers and the return on investment in different parts of the business. [They need to] help the CEO channel investment towards the areas that are [ultimately] going to generate the greatest return.

By Dawn Murden, Editor, Advisory

Do you think the role of the CFO is changing? Please do send your thoughts to: dawn@criticaleye.com

Watch the latest Eye to Eye: The CFO as Architect of Business Value video series

Or why not read more from Accenture on how digital is killing the finance function as we know it.

Also, don’t miss next week’s Community Update on productivity.

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