Theme Explorer: On course in a new world
The world is not the same as it was ten years ago and will change even more over the years to come. New developments have upset the foundations on which we have relied for so many years; no longer are they the formulas for success. It is time to alter or change course. The CEO who determines the course and the destination of the company has much work on his hands, as does the CFO, who is challenged with achieving the goal with or without minor course corrections.
Developments with respect to social media, alternative working practices, shifting economic and political power, volatile capital markets, new technologies, the need for sustainability and shortages induce captain and navigating officer to plot adeptly in order to steer clear of obstacles and to stay the course towards the new world. Sometimes new routes must be explored if the ship threatens to run aground on a sandbank. Like explorers, we will seek out these new routes in the new world. A number of subtopics will be addressed during the voyage aboard the SS Rotterdam, such as:
GROWTH IN TIMES OF SCARCITY?
How can one safeguard the future of the company in times of zero growth? What does a zero-growth business model look like? How does a shortage of raw materials, talent and capital impact companies? How can companies arm themselves against the risks of volatile raw material prices and shortages? How does one assess the risks of shortage? From a risk point of view, the CFO will need to help determine the new course. That course must encompass more than simply a more efficient use of raw materials while, at the same time, preserving raw materials and safeguarding sustainable extraction. Shortage prompts innovation.
GEOPOLITICAL UPHEAVAL
Economic and political powers have shifted in recent years. No longer does the Western world control the global economy. America and Europe must concede ground to new, rapidly growing markets in Asia and South America. Companies must turn to the rapidly developing markets for growth. The old economies are losing economic ground, as well as their position in international politics, as the emerging new economic super powers demand an ever greater say and involvement in principal bodies like the IMF and OESO. How does this affect companies’ long-term strategies and how can they anticipate it?
SUSTAINABILITY AS A LICENCE TO OPERATE
Sustainability has gradually risen above the status of marketing instrument. Companies realise that a sustainable business model is a prerequisite for being able to operate in this day and age. Stakeholders demand a sustainable policy with respect to raw materials, people and capital.
QUEST FOR A NEW STEAM ENGINE
The steam engine laid the foundation for the industrial revolution and marked a turning point in the shipping industry. No longer was one dependent on the wind and tides; one could come and go as one pleased. We are on the eve of a new era and the question is what the steam engine of the twenty-first century will be. Which invention will be of such great consequence as to fundamentally change our world? And what new innovations will companies come up with? What will be the new iPad? This will be a difficult quest for many companies because the old world is disappearing without any clear view of the new world in sight. But they have to embark on a search because one thing is for certain: steam engines are a thing of the past.
THE NEW FOUNDATIONS OF THE CAPITAL MARKETS
The capital markets find themselves in stormy weather with little prospect of calmer waters. Companies must reckon with enduring volatility in the capital markets. Money is available - but only where money is made. CFOs will need to keep a sharp eye on the company’s financing and some must seek new ways of funding. The relationship between company and financier is more intense and bound to more conditions and compliance rules. Increasing criticism of rating agencies and diminished faith in banks and these assessors expose a more fundamental problem, that of the reduced confidence in capital markets. What is the new foundation?
THE ADVENT OF COMPANY 2.1
The most traditional company structure is hierarchical with full-time permanent employment. New companies prefer flexible employment. They have a shell of flexible employees around them, profiting both company and employee. This structure enables companies to act quickly. In addition, alternative work practices are becoming more and more popular, with technology enabling people to work where and when it suits them. How does this affect future labour relations? What does employee 2.1 look like?
NAVIGATING IN THE INFORMATION TSUNAMI
Social networks, Twitter, Wikileaks, blogs and other manifestations on the Internet flood us with information 24 hours a day, 7 days a week. There aren’t many secrets left in this world. So it is imperative for companies to consider this development in their strategy. Firstly, they must realise that everything they do nowadays is scrutinised and negative opinions are broadcast around the world in a fraction of a second. But, if used correctly, the Internet also provides opportunities for contacting stakeholders.
In the future, CFOs will have to deal not only with a gigantic flow of financial data, but also relevant information from the business. How does one turn all this data into useful information and how does one keep this data flow under control? What information do you as a CFO make public and what not? How transparent should you be?
THE UNDISCOVERED WORLD
We have set course and are off to the new world, but, as with all voyages of discovery, we must allow for the unknown. After all, we may still encounter the unexpected on many occasions before reaching our goal.