Perhaps the biggest failure of corporate governance today is its emphasis on short-term performance.
You may not realize it yet, but your organization is in the early stages of being hit by massive, interconnected and occasionally opposing global changes. These changes are likely not going to reach full strength for 10 or 20 years. None the less, it will take time, planning, and some hard work to get prepared. If these changes turn out to be as big as predicted, being ready may mean the difference between an organization that prospers and one that perishes.
In our blog series "Finance Evolved", we consider major trends & forces and how they may affect the finance department to aid in your planning & preparation. Here are the big 5 looming trends:
1) Demographics
The population of North America is aging in a way not seen before. This will cause havoc for businesses, governments and the economy generally.
2) Skills
Recent surveys reveal gaps between the finance skills required by organizations and those possessed by entry-level management accounting and finance professionals.
As the pace of change increases, the successful individual finance professional and the successful finance department will need perpetual skills development.
3) Productivity
Despite technological improvements, the pace of growth in productivity has been slowing globally since the 90s. This has already impacted wages and may contribute to income/wealth inequalities and job insecurity in the future.
4) Budgets
We see increasing levels of pressure for finance to accomplish more, faster with stagnant or decreasing budgets. Given the other big forces in this list, there is every reason to believe that this pressure will intensify.
5) Technology
To say we are living in a time of rapid, continuous technological change is a cliche. There are signs that while the current rate of technological improvement may be slowing, the effects may well be poised to more dramatically affect the finance department than ever before.
Be ready for the future
- Train & mentor staff - The difficulty you have today finding qualified,
appropriately skilled staff is going to become much worse. Your best bet is to retain and develop your current team. - Document & standardize - Expect the loss of a significant percentage of your most experienced,
knowledgeable workforce in the next 2 decades. Without excellent organizational supports, this will come with a consequent decline in organizational productivity. - Plan ahead - Governments at all levels will see reduced revenue growth and increased expenses, further straining budgets. You can expect reduced governmental services and/or increased taxation.
- Streamline & automate - Organizations of all types will be under growing pressure to increase productivity. Software and automated systems are your best tool to do more with less.
- Upgrade your skills - The requirement for greater productivity will mean that your value will be increasingly tied to your ability to lead, to streamline, to automate and to improve. Conversely, if your skills are primarily data entry/bookkeeping, you are likely to be automated into the unemployment line.
Do you have the skills to leverage technology to help you address the dramatic staffing, efficiency, and budget challenges we will see in the next 10 to 20 years?
Watch for future articles in our Finance Evolved series which will dive deeper into these topics and explore additional strategies designed to aid the transition to world-class finance organization.
