Uncertainty isn't going away. And because of that, entrepreneur and consultant Pascal Finette says that organizations and leaders should think differently about how they view the current business environment.
Finette, a keynote speaker at the Future of Finance Summit in Austin, Texas, challenges leaders to think of uncertainty as an opportunity, not an obstacle. He asks: "How do you actually show up as a leader in a world of uncertainty and lead into, and then lead, in the unknown?"
Also, here's the late 2021 interview with Finette in which he talked about the accounting profession's "interesting inflection point."
What you'll learn from this episode:
- One measure of uncertainty that Finette follows.
- Why Finette compares a common business buzzword to tofu.
- Finette's advice for leaders having to deal with "doing more with less."
- More on the concept that constraints can lead to creative solutions.
- The importance of devoting time to thinking about the future of the business.
Play the episode below or read the edited transcript:
— To comment on this episode or to suggest an idea for another episode, contact Neil Amato at Neil.Amato@aicpa-cima.com.
Neil Amato: This is Neil Amato with the Journal of Accountancy podcast. Joining me at the Future of Finance Summit in Austin is a repeat guest. He was at the Future of Finance Summit in Nashville and joined me and now he's back. Pascal Finette, thank you very much for being on the podcast.
Pascal Finette: Neil, Thank you so much for having me. It's always a pleasure talking with you.
Amato: Thank you. The pleasure is mine. I appreciate that. One topic from your session with Jeffrey Rogers, leading into the unknown. Uncertainty is not going to end, but we have to learn how to relate to the uncertainty and work with it instead of fighting it. One, is that accurate of where things stand in the business world right now?
Finette: I would say absolutely. I think you feel it in your listeners, my clients, we feel it intuitively. It's also in the data. There's a beautiful piece of data which has been published for decades now by the Federal Reserve called the World Uncertainty Index, where they look at country and company reports and index on words and derivatives of the word uncertainty. What they found is that uncertainty is just rising. Again like we see it in the data. You look at the seven-year floating average trend and just goes up and up. It peaked at the beginning of the pandemic, came down a little bit, but it's rising again.
Again, we know it's here. It's been talked about quite a bit, and I believe as leaders in this world, we should, and this is my invitation for anyone is to really think about uncertainty, not just as something I need to manage something which is bad, but really see it as an opportunity because a lot of opportunities open the moment you look at uncertainty and really see it more as a chance for exploration and thinking about what can I do with that? Rather than just like, how do I prevent the doom and gloom of uncertainty.
Amato: Maybe this part of uncertainty and work as we look ahead to 2023 isn't such a big deal, considering all the outside events that are going on. But what do you think about the uncertainty over where the work should be done? Are we hybrid? Are we pulling everyone back in, or are we totally remote? That's still an uncertainty I think as we head into the new year.
Finette: Yeah, I think we haven't really figured it out. I think the one thing I observed during the pandemic, and I had this conversation with lots of leaders in the profession, is this notion that we saw that productivity in a remote work environment tends to go up. This has a lot to do with people having more time to focus.
Maybe, despite the fact that we get distracted when we're at home, but we're at home you're like this is not the proverbial coffee chatter going on and all that stuff. Productivity actually goes up, and it's measurably went up for a lot of companies. The challenges that creativity went measurably down because I don't have the coffee chatter anymore. I think the interesting question becomes, how do you get the best of both worlds? I believe we haven't really figured that out as society, as companies, so there is uncertainty about that.
Again, I believe there's a really interesting opportunity for us as leaders, as companies to really figure out what is the model which fits our culture and the needs of the business and our client's best. And most likely I think this will be some form of hybrid. We see companies experimenting with this where three days in the office, two days at home, all kinds of different models. Again, I think 2023 for many of us will be a year of experimentation with lots of agility, which is another topic we want to talk about.
Amato: Great lead-in and when we get there. Yes, we continue.
Finette: But with lots of agility, we move into this and experiment and learn.
Amato: That was going to be my next topic, that word, agile or agility. It is important that can also fall into the buzzword category and so I want you to retell your comparison of the word agile and tofu.
Finette: I am mostly vegetarian. My wife is a full-on vegetarian. If you've ever eaten vegetarian food particular in the Asian cuisine, is tofu. Tofu is this soy-based stuff. It's like a white curd. If you've ever eaten tofu, you know exactly what I mean when I say that.
Tofu really tastes like nothing and then you put sauce on, it tastes like the sauce. This whole notion around agility has a little bit taking on this notion of tofu. We use the word everywhere. It's like all these headlines and business consultants talking about it, but it really doesn't mean a lot anymore. I think it's important to suss out what's actually happening. What does it actually mean? Especially when you take it outside of its origin and the confinement of its origin, which is in software development where I think we understand it fairly well.
You've got tools and technologies such as Scrum as a process. But really the question is, how do I bring agility to the rest of my organization? This is where I think the tofu thing comes in, but because it's just overused, and I think we need to reset a little bit and we'll figure out what does it actually mean and how do we bring it into our organizations?
Amato: Now it's late 2022. When we spoke about a year ago, you probably weren't traveling as much to in-person events, clients, etc. Where I'm going with that is, any particular questions that you got from people or comments you heard, that gives you a sense of where these large corporates are just in their journey on transformation?
Finette: Yeah, I think there's a couple of things. Tom Hood in his closing remarks this morning mentioned these big six areas he found as part of this particular group. Things from war for talent, what are the skill sets we need for the future, the question we just talked about remote and hybrid work, etc. I think they are universally, we here them universally. It's not just confined to the finance function or this particular group of people. We hear them very consistently across industries, across geographies, even.
I think there's a secondary question, which is, if you zoom out from there a little bit more the question around leadership. How do you actually show up as a leader in a world of uncertainty and lead into, and then lead in, the unknown? I think that's a different take on it. It's a bit more like a 30,000 feet view take where I do believe that as leaders, we do need to show up differently. We probably need to deploy different management styles and organizational structures, etc., to really capitalize on making the most of the world we're living in.
Amato: It was in a different session that I heard a finance executive say that one of their challenges is doing more with fewer people, fewer staff. What do you say to that person if you're trying to get them to be better leaders, but they're too busy just in, "I'm just trying to get the work done. How can I manage and lead?" What do you say to them?
Finette: First of all, I want to acknowledge that that is a real thing, and it's a real problem. Absolutely no question. I also think that constraints have always led to creative solutions throughout humankind, any kind of organizational environmental system. Again, I think what we see as an outburst of that is probably higher levels of automation, robotic process automation, higher levels of using data and AI, etc. I think there's a lot of innovation which comes out of that, which is good.
That, of course, requires focus and the ability to invest into it. Just a whole different game. Then you have the leader who needs to show up. I think the important piece here is, I fundamentally believe as a leader, you need to carve out time to think about the future, and you need to do so in a very deliberate fashion. A dear friend of mine, a colleague of ours, Bill Pasmore. He teaches at Columbia Business School, wrote 25 books on innovation and disruption.
He has this thing he calls the 10-10-5 rule. Where he says that the top 10% of your leadership team should spend 10% of their time thinking five years out. I'm not sure if it's 10-10-5 or any other number, but I do think that this general notion that it is part of your job, that you spend time on the future and also acknowledging the fact that, yes, there's a day business to run. Yes, that's 90% of your business, but there is still the 10%, but you need to think about the future and really build the future.
Amato: This is going to be a concise conversation by design, and Tom Hood is literally beating down the door to get in to talk to me. I'll ask it's a short renewal of our acquaintance, but anything you'd like to add in closing?
Finette: Tom Hood reminded me of this today. When we closed out our session last year, I made this point to the participants that really the future is unwritten and that it is our obligation and our opportunity to write the future, create the future every single day. I think it's just a good reminder to us because it often and I feel this myself. When you're in the day to day in the trenches, it feels like it's the grind, and it's really important to lift our gaze and just understand that the future is the thing we create for ourselves, for our communities, for our companies, for our people. My invitation, as we're recording this in December 2022 and we're looking into the new year, really lift your gaze a little bit and think about what can I create? I think that's a good question to ask.
Amato: Pascal, thank you very much.
Finette: Neil, thank you so much for having me.