From scorekeeper to visionary
Everyone agrees, today’s deal-makers are once again focused on growth. And while growth strategies for both business and economies must surely take on a new look, given our recent economic realities, what we are left to ask is – by what will that new look be informed?
What are the conversations, and more importantly, what are the strategic activities that need to take place in order for us to see real growth over the next few years?
Finance Minister Pravin Gordhan, after his Davos visit at the beginning of the year, pointed out that ‘we’ve got to understand what it means to accommodate diversity, what it means to accommodate different ways of doing things, and yet find a framework globally within which there’s a level of compatibility and co-ordination about what we do. And that’s the fascinating challenge for the next decade.’
Minister Gordhan was of course referring to the challenges faced by the diversified activities of global economies. But the situation also lends itself to our own domestic economy and business realities when you consider the number of domestic issues that must certainly inform what he called the New Growth Path in his budget speech in late February.
He said at the time that the New Growth Path rests on four key drivers:
- public investment in infrastructure,
- targeting more labour-absorbing activities,
- rural development and regional integration, and
- promoting innovation through “green economy” initiatives.
These were by no means surprising drivers, as CFOs the globe over have identified for business, in particular, innovation as a key driver to growth. But what will essentially inform the success of these activities must surely take into account our local issues as they pertain to labour and population demographics, social issues as witnessed here on our continent and in the middle east, environmental issues as experienced around the globe; poverty and inequality, and a burgeoning youth market that’s largely either unemployed or unemployable.
What innovation talks to is: integrated growth, and a finance department that concerns itself more and more with long-term vision and strategy. The recent recession jolted our finance staff from a traditional scorekeeper role to business partner role, where finance as a business partner supports the business in achieving its business objectives. The traditional role doesn’t end as we most certainly cannot do without the stewardship role, in which the finance function has to safeguard shareholder interests and ensure good corporate governance.
But we’ve certainly been propelled into understanding that those that manage the purse strings must understand the long-term strategy of the company, and for Pravin Gordhan and team, the country.
What this entails practically is a far more integrated relationship between finance and business innovation as it relates to technology, people and infrastructure.
These are the conversations and relationships on which our finance staff must build, if we are to experience real growth over the next few years.