From CFO South Africa: The Finance Indaba Online is off to a roaring start as thousands of finance professionals gather virtually to enjoy the gamified expo.
Kicking off the day, TomorrowToday founder and futurist Dr Graeme Codrington said in his opening keynote presentation that CFOs need to change the way they think about the future. “Covid-19 has been tough on everyone, but I think we’re in for a massive decade of change. I don’t even think Covid-19 will make it on the list of the top five disruptors.”
He explained that, even though Covid-19 is a disruptor, the lasting legacy of the pandemic is to accelerate other disruptive forces, especially digital transformation. “As much as Covid-19 hit us last year as a big surprise, it wasn’t actually a surprise. For the last 10 years, people like Barack Obama and Ian Golding have been talking about the fact that we were getting closer to a pandemic that would shut the world down. Yet we missed it. If we are looking ahead to the next decade and beyond, what else might we not see coming?”
In order for CFOs to be able to plan for the future, Graeme said that they need to change the way they think about it. “We deal with inattentional blindness, where our brains are so focused on what’s right in front of us that it doesn’t pay any attention to the things happening around us,” he explained. “Your brain receives millions of pieces of information at the same time and can’t give you all that information at once, so it selects what it alerts you to.”
He said that a CFO’s brain is programmed to identify sense-making patterns. This means that they are less likely to rethink what they originally thought. “This becomes a problem when new information enters the system and previous patterns aren’t required for sense-making decisions anymore.”
CFOs also need to overcome confirmation bias, which is when your brain wants to confirm everything you already know. Your brain will allow you to see the things that you already know and believe, but filters out the things that you don’t.
“The CFO of the future needs to do a lot more than looking back at historical accounts and making sure that the audit is correct. CFOs are concerned about making sure that the financial position of the company is solid, but they also need to be a key member of the team that looks to the future and come up with new ideas to move their companies forward,” Graeme said.
He explained that the biggest problem CFOs have is that when they look to the future, they look at it through today’s lenses – what the world is like. “Your confirmation bias works against you, because you are programmed to try and keep the world the same. We have to learn how to see the future differently.”
Graeme said that the easiest way to overcome this confirmation bias comes from Jim Dator, who is a professor and director of the Hawaii Research Center for Futures Studies. Jim’s rule of the future is that, “Any useful idea of the future must appear ridiculous at first.” It has to push you out of your comfort zone.
“The future is not just a progressive extension of the present,” Graeme said. “We live in a moment in history that is changing exponentially. If you think about the future, you have to push yourself to think about some ridiculous ideas that could be useful in the strategy of the organisation.” And the CFO of the future has to be involved in thinking of these ridiculous ideas, not just financing them.