“There is a whole new world coming, and this world of change is coming at an unprecedented rate.”
Speaking at the recent sponsored William Buck Perth CFO Symposium, this was the key message by leading executive Chris Brown, Director of Corporate Advisory.
Chris who presented how CFOs are the ‘invisable change leaders’ at last year’s CFO event, once again captured the attention of the packed audience at the Pan Pacific Perth Hotel, continuing on the theme of organisational transformation.
His presentation looked into the past, present and future of the business world, in what he described as the ‚ÄòTao (“DOW”) of Transformation.’
Reflecting on Taoism ‚Äì the philosophy of nature ‚Äì Chris described how ‚ÄòTao’ emphasises the continuity of the natural world. Giving the analogy of Tai Chi, with its 108 postures, which when executed aren’t recognised in singularity, but in one motion.
With this in mind, Chris said the epitome of change is how you handle it ‚Äì like Tai Chi, it should flow from one step to the next where you don’t identify the transition.
Chris told the packed audience of finance professionals there had never been a better time to be a CFO, discussing how exciting developments underway around the globe will forever change the business landscape – but that everyone needs to be ready.
He said the face of life was changing, socially, politically, environmentally and demographically; citing the embrace of diversity and equality which provides new thinking; ageing population, the millennial takeover and political turbulence ‚Äì most importantly though, is how technology was changing the shape of all these things.
“This is the most exciting time to be a CFO. Never before have we seen this dimension of change,” Chis commented.
He revealed that a major focus of that change is already happening via social media and the rapidly developing computer science of artificial intelligence (AI), ‚Äì with some of the world’s most powerful companies, and governments,¬† investing heavily in a race to take the lion’s share of a potentially massive global market.
China and the AI frenzy
According to Chris, AI will be an even bigger game changer than Information Communication Technologies (ICT) and that everyone needs to position themselves to be ready to take advantage of a dramatic shift that is being driven by big data, computing power, algorithm engineering, access to venture capital and supportive government policy.
On the back of the last two items in particular, a recent PWC study suggested that China has taken the leading position in a market that may be worth as much as US$15.7 trillion by 2030.
Chris revealed the studies forecast Chinese organisations could be earning a total of approximately US$7 trillion per annum in new AI generated business by 2030, with the USA trailing a long way behind with US$3.7 trillion and the rest of the world pulling in US$5 trillion per annum.
Staggeringly, Chris also said it is estimated that AI could replace 40% to 50% of jobs in the USA by 2030.
The amazing numbers China is tipped to generate will come off the back of a largely unnoticed 2017 announcement by the Chinese government that it planned to build its AI capabilities with the aim of being the global leader by 2030.
“Since then China has been in an AI frenzy,” Chris told the audience.
With strong backing from the government, China is mobilising machinery, recruiting leading AI minds from Silicon Valley and taking note of major developments around the world.
“It must be remembered that China is the ancient master of copying,” Chris noted.
Currently there are seven global AI giants, with China represented by Baidu, Alibaba (Ant Financial) and Ten Cent (WeChat), while the USA-based multinationals Google, Amazon, Facebook and Microsoft are taking up powerful positions.
AI and knowledge growth
Chris also highlighted the dramatic change that AI is expected to make to the rate of ‘knowledge growth’.
“In 1900 it took 100 years to double knowledge growth, while in 1960 it took 25 years to double. We are now at a stage where we are doubling knowledge every 13 months – with AI it could be days.”
Chris told the CFO Symposium audience that gathering and deciphering big data and acquiring knowledge of customer needs and wants will continue to be major drivers in this brave new world
He linked internet giant Google’s significant investment in driverless car technology to those two key components, alluding to the passengers in those driverless vehicles being a captive audience that the company could tap into for information gathering, behaviour mapping and better market targeting.
He added that fellow social media giant, Facebook, is also looking to diversify into new business areas, such as cryptocurrency, where its massive public audience provided it with a huge pool of data and potential customers.
“They have a market the banks would die for.”
Chris also noted that impact technology has moved from enabling to execution and that society has become ‚Äòlife in a phone.’
He said all of these changes are bringing challenges and opportunities; that CFOs need to see and more importantly, monetise those opportunities to make them valuable for their organisations.
However, this massive acceleration of data and knowledge capture is also having a major effect on society.
“I don’t think privacy exists anymore. If you sign up to a single social media site you have given your privacy up” Chris said.
Letting millennials loose
With knowledge growth moving at an exponential rate due to AI, Chris revealed that change will increase 10 times the rate in the next decade. He said that we should let millennials loose to lead the way ‚Äì not try to match them.
“Unlike the baby boomers, they are born with a tech understanding. Entrust the millennials to use their power. Millennials will do most of the heavy lifting of tomorrow.”
Chris also said that it was important that today’s business executives do not stand still and never cease to refine their craft through continuous learning.
Chris added that to be able to move with the changing business environment, CFOs will need to know what the best decisions are, have the courage to make them and to be open minded.
“CFO’s must become frontline decision makers, challenge your current paradigm and business models,” he stressed.
Chris said that the DNA of a CFO’s success would be the ‚ÄòTao.’
“IQ + EQ + AQ+ PQ + HQ + DQ = The Tao.”
He said that all these quotients put together will equal to a successful transformation. That’s intellectual (IQ) emotional (EQ), adversity (AQ), positive (PQ), human (HQ) and decision quotient’s (DQ).
Once again Chris opened up the William Buck CFO Symposium audience’s minds and gave them a thought provoking and, in some ways, a disquieting insight into the dramatic changes now affecting business executives.
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Do you want to know how the CFO can lead change within your organisation? Talk to Chris Brown or William Buck’s corporate advisory team today.