Autumn: it all changes

3rd Oct 18

Change is something we’ve had to get used to in business. It’s been fashionably dressed up as re-engineering, transformation and latterly disruption (oh, and “pivoting”, of course). But we seem to have entered an era where the change is universal. If you're not constantly revolutionising things, you're stuck. It's tiring...

Obviously this is about Brexit. But coming out of a summer of heatwaves – not just in the UK, but around the world – it also feels like some of the global issues that we’ve long talked about as universal crises are coming to the fore.

Trump adds to that feeling. Previous US presidents have always had a massive influence on businesses globally, but the way the 45th incumbent tosses around tariffs and deploys both domestic and overseas outrage so casually has a very real effect on us all. Just ask any FD whose commodities are priced mainly in dollars.

Where does that leave us as the finance executives and leaders of growing businesses? Before we tackle that, another thing that’s changed: a growing hostility to business boosterism.

The best example in the US is Elon Musk. Nearly a decade ago, this wunderkind could do no wrong. Tesla was starting to turn out the much-admired Model S electric car, he was revolutionising renewable energy and his SpaceX business had delivered its first satellite into orbit. Today, while he still had his adherents, the PR gaffes, production issues on his “mass market” cars and suspicions about his businesses’ financial standing (losing your chief accountant suddenly is never a good look) has dulled the image.

Google and Facebook (which could face the first big GDPR fine), the growth darlings headed by visionaries, are relative pariahs in the tech world. People are getting more cynical about “disruption” and they’re losing trust in tech evangelists who can’t keep their data safe. Boring old (and we mean really old, in tech terms - like, 42 whole years old!) Microsoft and Apple (run by a logistics executive) are now the rock-solid businesses to rely on.

Here in the UK, there’s a similar feel. Some of the most high-profile go-getters have been got – such as Mr Positive Jamie Oliver (whose restaurant chain has suffered from boring old financial management woes). London might be at the centre of a tech revolution, but over-hyped tech like blockchain or artificial intelligence, and the security nightmare that is the Internet of Things, seem to have engrained a scepticism about tech-lead change.


Back to the question for financial executives – for you – then: what does this all mean? Three things, we think.

First, as we’ve said before on this blog, stick to your knitting. Risk management is a discipline. FDs and their teams are central to creating options for businesses. Looking hard at cash, controlling costs, drilling into investment appraisals, hedging conservatively – these are all buffers to dramatic change. You are the safe pair of hands on the tiller – and you’re never more important than when seas are choppy.

Second, remain positive. The uncertainties of Brexit and Trump Trade, the risks to the economy of public and private debt levels, the threat of disruptive technology and business models – they’re all real. But none of us are in business to hide. Finding ways to invest in innovation and support colleagues with bright ideas to grow remains a vital tool to cope with change.

And third, stay connected. Every risk (and opportunity) faced by your business today is multifaceted, it’s dependencies and consequences likely reach far and wide. You can’t always hope to spot the Butterfly Effect in action – but the drivers of change are incredibly diffuse. The best way to avoid being blind-sided is to be out in the business, read widely, stay alert to factors outside your sector or locality. And share ideas, too – with colleagues, with other finance execs (Contemporary FD 2019 in May will be a great chance to do that), with people outside your industry.

The finance department is on a long journey – to be ever more connected to the business, to being a value-adding function and to adopting some of the game-changing technology (like AI) first among functions. Summer is over. Change is coming. You can be its steward.