The world has changed dramatically in the last 100 years: The emergence of the United States as a dominant superpower – Rise and fall of the Soviet Union – European countries coming together in 1993 under the EU flag, and the launch of Euro in 1999- The economic ascendancy of China and India … The forecasts deduce that by 2050, China will be the largest economy with India as the close second (PwC report) As famously said by Mark Twain “Prediction is very difficult, especially about the future – Mark Twain. BUT we still have to predict because over-reliance on the ‘known world’ leads to inertia and can blind us to the inevitable. Hence, predictions have always been made and will be made. And they will prepare us to face the inevitable and seismic changes that have become more of a ‘constant’ now! THE MEGATRENDS As per the book “Leadership 2030” by Hays Group under which an extensive research was carried out and close to 20 major megatrends were highlighted with many megatrends which are yet to come up, eventually they shortlisted the top 6 : Globalization 2.0 Digitization Individualism & Value pluralism Environmental crisis Demographic changes Technological convergence 1. Globalization 2.0 A new world order is emerging; Economic power is shifting to Asia: With China becoming the largest economy, India becoming the close second, the US taking the third place and most importantly the tensions between a few major powers across the globe dissolving many changes can be anticipated in the coming years. A new global middle class is emerging. East is no longer just a sweatshop for the west. Leadership response: Discard single centralized strategy & fine tune to local dynamics: Strategies should be more globalized, though we will still have the global strategy & local presence kind of philosophy, the global strategy is going to become extremely important Embrace diversity – in markets, sourcing, talent & partnerships Stay compliant. Global and cross-border implications: No business can ignore global compliance and global requirements. 2. Digitization Technology is shifting the balance of power from organizations & concentrated hands to consumers and all stakeholders Consumers, employees and the digital youth have more power, flexibility, and transparency and consequently, higher expectations Leadership response: As organizations and leaders, we have to display a higher level of integrity, transparency, and digital competence. Automation and analytics will become an indispensable tool. Data will rule, with easy access to all. Winners will be those who can realize its potential more, and quicker. 3. Individualism and value pluralism In the era of Globalization 2.0 and Technology, people will discover a wider range of life and career. They will make decisions based on values too, and not only economics Lifestyle, recognition, and self-expression will take priority over pay and promotions. Leadership response: Learn to engage with diverse and highly individualized teams Learn to provide autonomy within boundaries Organizations and leaders will have to come closer to their consumers and employees. Integrate the digital youths who may not have the same respect for corporates conventions, with their ‘old counterparts’. 4. Environmental concerns Worsening climate change is a frightening reality. Critical natural resources – water, oil, minerals may all run out. Either due to fast depleting natural resources or due to higher cost to pay for new innovative replacements, the costs may explode Leadership response: Leaders will have to embed sustainable cultures. Organizations or individuals will not be able to remain isolated or unconcerned with the environment around them. Get involved. Restructure operations to move environment from CSR to your bottom line 5. Demographic changes Global population is not only growing but getting older (mostly in the West) Aging populace = shrinking workforce = lesser efficiency Developing economies will experience a ‘brain cycle’ with talent returning home ringing new skills and demands. Leadership response: Attract and develop talent which is globally skilled, culturally diverse, and individually demanding. Embrace technology – not to replace talent but to complement At the country and government level – ensure Demographic Dividend doesn’t become Demographic Disaster 6. Technological convergence Advanced technologies are joining forces to transform every aspect of life. Innovations in medicine, communication, robotics, energy, food production will all usher in unprecedented changes. Convergence of Nano, bio, information and cognitive technologies will generate new products and markets making most things of yesteryears obsolete. Leadership response: Stay abreast of these progress and spot killer opportunities. Let innovation foster more collaboration – between divisions, between companies, between markets, and even between nations Learn to live and work with uncertainty, and with products and solution, which you may not have even understood to begin with! TOSS for CFO I. Think: Assess and have a long-term and more holistic view. Think Strategic II. Observe: Internal and external dynamics, changes, trends, catalysts. Let Finance be a window and not a mirror III. Seek: To collaborate. To partner. To guide. IV. Speak: The strategic language. Make yourself heard – by being relevant, lucid and focussed on the core point.
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