Ronald Goseco l May 27, 2022 l The Manila Times
THE Finex Academy will run a program for senior leaders in finance from June to August that will provide tools and strategies for the Great Transition. It will involve 12 sessions covering six modules: Transformational Leadership, Influencing Board Governance from the CFO (chief financial officer) Seat, Crisis Leadership, Driving and Sustaining the Competitive Edge, Creating Value from the CFO Seat and the CFO’s People Role.
The program was designed to ensure that participants get a solid technical grounding. It will be conducted in partnership with institutional learning partners including P&A Grant Thornton, De La Salle University and the Institute of Corporate Directors. Finex has also partnered with Benchmark Consulting for coaching sessions that are integrated with the program. To differentiate this offering from other programs, we have invited Finex practitioners to share their views and real life experiences.
The program was designed for CFOs by fellow CFOs so they could perform pivotal roles in their enterprises as strategists and catalysts. CFOs are expected to preserve and enhance an organization’s reputation. They are also expected to harness talent and empower others around them to create long-term value and safeguard company reputations. This masterclass in finance is a unique and holistic offering that will provide both insights and the tools to address the issues of the Great Transition.
The Great Transition is not just about the political change that we are experiencing. I have to admit that it is just as exciting to watch as it has all the elements of a good drama. Financial markets are currently waiting with bated breath for the announcement of the new economic team. The first quarter’s stronger-than-expected gross domestic product growth of 8.3 percent is likely to be sustained with further reopening of the economy but it can only be accomplished with good governance by a reputable team. The choice of the incoming president will demonstrate his probity and should calm the apprehensions of foreign investors.
On the global stage, we’ve been hearing about a wide range of issues ranging from the Great Resignation to the Great Productivity Slowdown. The pandemic-era trend known as the Great Resignation was the result of various factors: widespread burnout, people re-evaluating their relationships with work and the opportunity for remote work, among others. The last one is particularly crucial since changing jobs now can simply mean changing company laptops and not necessarily moving physically, say from Pampanga to Makati. According to data on LinkedIn, one in seven jobs that are being posted right now have a remote or hybrid work component. At the start of the pandemic in 2020, that number was one in 67.
Recent surveys, meanwhile, show that the primary reasons for most resignations are low pay and a lack of opportunities. The surveys also reveal that those who quit and are now employed elsewhere are more likely than not to say that their current job has better pay, more opportunities for advancement, more work-life balance and flexibility.
Labor demand started rising early in 2021 in developed economies and later in the country, as vaccines were distributed and alert levels were lowered. But workers did not rush to fill those open jobs for various reasons including health risks. This is a continuing challenge for many companies and it does not appear to be an aberration nor does it actually appear to be a new development triggered by 2020 events. The reasons are really old. Perhaps what is different today is that employees were simply more tolerant in the past and did not have choices like hybrid work.
Another concern exacerbated by the pandemic is the slowdown in productivity. An era of unprecedented innovation is not translating to major productivity gains. Productivity is linked to rising wages and a higher standard of living. It drives economic activity and prosperity. In the US where this is tracked, their data shows that productivity has increased at a disappointing 1 percent annually since 2007. That compares with 3 percent from 2001 to 2007 and 2 percent in the 1990s. It was even higher in previous decades. The eurozone displays a similar picture.
China actually bucked this trend by improving the standard of living of its population following the launching of science and technology programs in the 1980s by Deng Xiaoping. This was followed by the creation of special economic zones that became engines of growth and the eventual opening of the economy. It is generally accepted that the two factors behind much of China’s rapid success are large-scale investments and rapid productivity. The pandemic and subsequent lockdowns — including the zero-Covid initiated lockdowns — will, however, bring China to the same levels as the US and the eurozone. In the meantime, we are seeing the rest of the world in catch-up mode.
Despite all these “Great” challenges, the future remains exciting. It is a world saturated with information and unprecedented tools for analyzing it, not to mention systems that learn as they go. These are systems powered by algorithms that form statistical patterns far too large for humans to process — think about your Daily Mix recommendations on Spotify. Clearly, it belongs to those who are ready to adapt and sense where it is leading. CFOs need to develop new strategies for the great transition. We need to find new solutions and an upgraded toolbox, not just to repair but also to create new value streams.
*** Ronald Goseco is a trustee of the Finex Academy. His opinions are his own and do not necessarily reflect the views of the institution and the Manila Times. Know more about #FINEXPhils through www.finex.org.ph.