Tag: CFO

How AI is enabling CFOs and CHROs to work smarter together in an economically uncertain period

Breaking data silos to drive strategy enables HR and finance departments to work in concert – and by removing administrative tasks, and empowering employees with self-service solutions, AI makes their working lives more fun.

November 22, 2023, marked 60 years since Lee Harvey Oswald assassinated John F Kennedy. The 35th president of the United States knew plenty about handling pressure in uncertain times. JFK commanded patrol torpedo boats during World War II, was at the helm during the Cuban Missile Crisis and signed the first nuclear weapons treaty a month before his premature death.

What would the youngest-serving US president have made of modern-day pressures, not least the advancement of AI in the post-pandemic world? Kennedy’s observation that “the Chinese use two brush strokes to write the word ‘crisis’” is perhaps apposite. “One brush stroke stands for danger; the other for opportunity,” he explained. “In a crisis, be aware of the danger – but recognise the opportunity.”

CFOs and CHROs would be wise to heed JFK’s words and recognise the opportunity presented by AI. Admittedly, they have had it more challenging than most since the start of the COVID-19 crisis and during the ongoing cost-of-living crisis. And, considering CFOs and CHROs have seen their list of responsibilities multiply in recent years, they may not have the time or inclination to engage with a technology that, as many predict, will cut human jobs and possibly slaughter humanity, according to some doom-mongering experts.

However, embracing AI enables those operating in these spaces to handle their workload better, focus deeper on identifying and nurturing talent – which is why most HR professionals enter the industry – and manage finances, the chief concern of CFOs.

Further, with more data at their fingertips, both can play more critical roles strategically, working closely together and with other members of the C-suite.

Holistic approach

“The best HR teams impact right across the operations and strategy of organisations and are looking outside them to anticipate the coming challenges and opportunities too,” says Lesley Richards, Head of the Chartered Institute of Personnel and Development (CIPD) in Wales. “It is absolutely right to say that a more holistic approach is necessary. In fact, it’s really hard to create excellence in this type of work without all of the critical elements being well aligned.”

Notably, ‘Will AI fix work?’, a report published in May by Microsoft – which has invested billions of pounds in OpenAI, creator of ChatGPT and DALL-E – suggested it will be the HR professionals, working in concert with finance teams, that can best understand and use AI who will communicate better with workers and improve the overall employee experience. 

As the axiom goes, a happy worker is a productive worker, so it is worth CFOs working closer with CHROs. Increasingly, data-powered AI is the golden thread that binds together their work, enabling smarter decisions around employee recruitment, retention, performance and career development.

While 49 percent of around 30,000 respondents to Microsoft’s global survey reported they were worried that AI would consume their jobs, considerably more (70 percent) wanted to delegate as much work as possible to AI to lessen their loads. “Human-AI collaboration will be the next transformational work pattern,” stated the report.

Clare Barclay, Microsoft UK’s Chief Executive, expanded this theme when she took to the stage at London Tech Week in June. “This wave of AI innovation sweeping the world right now is going to impact the world for generations to come,” she enthused. “It will be the most significant inflection point in our lifetime.”

Avoiding digital debt

The uptake of generative AI, in particular, has been extraordinary. Barclay pointed out that the internet took seven years to reach 100 million users. It took ChatGPT just two months to hit the same number (a record that has since been surpassed by Threads, Meta’s latest social media platform that looks and feels like the channel formerly known as Twitter). 

“This type of adoption has not been seen before and really will disrupt all industries and how they traditionally operate,” continued Barclay. “It will also significantly impact the world of work and how people work.” She cited a PwC study that calculated AI would boost the UK’s GDP by over 10 percent by the end of the decade, equating to an additional £232 billion.

To take advantage of AI, though, finance and HR teams must look up, urged Barclay. Referencing more Microsoft research, she warned that 64 percent of workers didn’t have enough time or energy to complete their daily jobs. “They’re challenged and overwhelmed with the pace of work, burnout and a lack of productivity. We call this deluge of information ‘digital debt’, sapping energy, slowing down the ability to think clearly and severely impacting thinking for innovation.”

AI can assist. “There’s been a lot of discussion about job losses and the impact of AI, but the research showed that leaders around the globe are the least interested in using AI to cut jobs,” said Barclay. “Instead, they believe, and value how, it will help employees to be more productive and focus on more meaningful work, as well as having wellbeing benefits – obviously one of the overheads of this digital debt.”

In short, AI provides finance and HR teams with digital assistants, or ‘copilots’, as Microsoft calls them. “These copilots will help workers manage this digital deluge, prioritise the most important tasks, create compelling content and improve their creativity significantly,” added Barclay. “Ultimately, this is about using this technology to help employees navigate what matters most to them.”

AI as copilot

If used correctly, AI in its various forms will ease the workload for HR and finance teams, says Paris-based Helen Poitevin, Distinguished VP Analyst, HCM at Gartner. “In future, as AI can provide hyper-personalised recommendations and insights around employees, HR professionals will be able to better support staff in creating career development plans, streamlining documentation and improving the onboarding process, among other things.”

Daniel Pell, UKI Country Manager for Workday, says HR departments are already establishing more ‘self-service’ tools for employees that reduce their administration workload. Increasingly, companies empower staff to book holidays via a smartphone application or intranet portal – no need to plead with HR for time off.

Yet, more crucially, learning is not keeping up with the pace of work. According to Work Economic Forum projections, 60 percent of the workforce requires upskilling by 2027, but less than half have access to the necessary training.

Again, AI can help CHROs and, in turn, CFOs. “Using AI to identify and predict skills for prospective and current employees enables more effective job matching and career development,” says Pell. By acting on recommendations surfaced by AI, HR professionals can proactively approach staff that have been in the same role for three years, for instance, to offer an appealing internal move. This engagement extends the employee’s lifecycle within an organisation.

Showing a small amount of recognition can go a long way, too. LinkedIn research found that saying ‘thank you’ to employees four times a year raised their retention rate to 96 percent. With AI, HR teams can prompt managers to celebrate their team members’ contributions.

Additionally, frequent pulse surveys allow HR teams to monitor the morale and sentiments of individuals, providing them with the data needed to make necessary improvements or interventions before a situation is irreparable and costly.

Given Gallup’s most recent ‘State of the global workplace’ report found that 2022’s 23 percent employee engagement was a record high, there is significant room for improvement in this area. But by using AI to boost this figure, CHROs and CFOs working in tandem will become the beating heart of company strategy in the digital age.

This article was first published in Workday’s SmarterCFO magazine in autumn 2023

Tech, humanity and humour: meet the new CFO

When Govia Thameslink Railway suffered a 95 per cent drop in footfall, chief financial officer Ian McLaren drove recovery by being open to innovation and investing in staff

Drag queens, diversity and inclusion, and data-driven decisions are unlikely to be among the first words you would associate with a typical chief financial officer (CFO). However, Govia Thameslink Railway’s Ian McLaren is far from a stereotypical CFO, although he argues no such thing exists in 2021.

As the 52-year-old cycling enthusiast, who took up his position at GTR in December 2017, can attest, the tumultuous events of the past year have elevated the role of CFOs and significantly expanded their list of responsibilities, across the board. “When I started at GTR, my remit was a lot simpler and I was focusing on a narrow scope of my skillset, whereas now I’m using a much broader range,” he says.

“Today, it’s more about the human side of things, thinking about very practical stuff: keeping almost 8,000 colleagues safe while being able to carry out their duties, alongside supporting the varying ambitions of stakeholders and looking for opportunities to create value.”

The inference is the train has left the station for those who still believe a CFO’s primary journey is counting the beans. Business continuity has been paramount through the coronavirus crisis and those in McLaren’s position, at their respective organisations, have become more central to steering strategy.

Considering GTR, which handles 250 locations and some of the busiest train stations in London, went from “moving over a million people” in and out of the capital on a normal day, pre-pandemic, to footfall crashing by 95 per cent when the first lockdown was enforced in late-March, it has been a mighty challenge to get the business back on track. 

Broader range of skills required

Connecting with, and looking after, customers and staff alike has enabled McLaren to navigate a quicker route to recovery. “As an organisation, we are looking to build back better, greener and faster,” he says, “and part of that is drawing on the ability to listen and adapt.”

Today, it’s more about the human side of things, keeping colleagues safe while supporting the varying ambitions of stakeholders and looking for opportunities to create value

A good handle on technology also augments modern CFOs and, most importantly, their employers. McLaren has this in spades; his curriculum vitae lists two-year stints as CFO and head of finance at Nomad Digital and Digital Barriers, respectively. Indeed, he has been in the driving seat for GTR’s digital transformation journey, which began in 2017, and it “came into its own” last year, allowing colleagues to “work with technology in an untethered way”.

Further, through utilising products provided by technology partner Microsoft, McLaren and his fellow GTR strategists can gain “real-time insights that have led to data-driven decisions”. He says: “These insights have meant our colleagues can optimise their time on the ground and it has empowered people to do the job we’ve required of them, which has been ever-changing.”

Dealing with the pandemic has taught us that our ability to change can move at lightning pace, so over the next five years we need to become very good at rethinking everything we think we know

Since the first lockdown, that agility and flexibility, following the data, has been vital for GTR’s service operation and particularly for hospital staff and those they aid. “We realised there are nearly 70 NHS trusts across our network, and first-responders and critical workers relied on the train service, so we adapted our timetable predominantly for them,” says McLaren. “We became more of an off-peak rather than a commuter service. The old rush-hour peak has disappeared and now travel patterns are more evenly spread throughout the day.”

Value-creation officers: open to innovation

A suite of new digital applications has minimised disrupted running of services. These include an app, introduced in May, that indicates to train drivers and station staff how recently a long-lasting virucide, designed to stick to surfaces and kill viruses, including COVID-19, for up to 30 days, has been applied. 

“It has given all our colleagues confidence about going into a clean workplace,” says McLaren. Another app allows GTR staff to access the latest Public Health England information about the pandemic and report sickness and absence from work, thereby limiting potential bottlenecks.

“Technology has helped us all throughout the pandemic and understanding technology is increasingly important for CFOs and others in executive positions,” he says. “I’m lucky because tech has been my background, but it’s essential to know the risks associated with technology and cybersecurity especially. I would encourage all organisations to think more like technology companies, but being technology-savvy certainly raises a CFO’s stock.

“Dealing with the pandemic has taught us that our ability to change can move at lightning pace, so over the next five years we need to become very good at rethinking everything we think we know.”
McLaren, who has thrice cycled from Land’s End to John o’ Groats, owns ten bikes of various vintages, the oldest being a 1935 “speed racer”, and regularly clocks up 200 miles a week, finds strategy brainwaves often hit him when pedalling.
The secret is being open to innovation and new ideas. “Some might think the finance director is there to say ‘no’ and it’s all about cost-cutting. But to me, it’s more about value creation; we are becoming value-creation officers,” he says, suggesting that adopting a “beginner’s mindset to everything” helps in the current CFO’s role.

Invest in employees

“If you consider yourself an expert then you are closed to many things,” he adds. “I try to approach things with novelty and understand the art of the possible.”
Ultimately, the success or failure of an organisation is down to its employees, argues McLaren. “You have to understand the business and, more importantly, what makes its people tick.” Hence, he is passionate about diversity and inclusion, and keen to invest in and join events that “demonstrate my more human, fun side”. 

For example, he and his daughter have recently enjoyed tuning in to virtual drag queen shows, featuring the amusingly monikered Annabelle Lecter, put on for GTR’s LGBT+ Network. “Spending a tiny amount on a diversity and inclusion event is nothing compared to the huge value it generates to us as a business,” says McLaren. 

“It’s intangible, but you know you are creating something quite special when you see the brilliant reactions from colleagues, which then resonates with their service to customers.”

The anatomy of the modern CFO

The chief financial officer’s role has evolved somewhat since Ian McLaren gained his accountancy qualification over three decades ago; finance credentials alone are no longer sufficient.

“Today, finance roles need to be augmented with many more skills,” says Govia Thameslink Railway’s CFO. He suggests, in addition to being good with numbers, the modern CFO must understand legal and broader governance issues, and be technology savvy, not least to manage cybersecurity risks and data. On top of being able to structure commercial deals, they ought to be excellent negotiators too. 

In terms of personality traits, the best CFOs are armed with “a good sense of humour, can understand and show humility, and have tenacity”, says McLaren. Further, given the business agility necessitated by the pace of change, they require a certain amount of creativity, plus an openness and a “growth mindset” that enables them “to question, listen and rethink” strategies and business models.

Being a courageous leader, who can communicate with and energise colleagues and those across the business, is increasingly valuable for a CFO. “Having good people skills is essential,” McLaren concludes. “This skill helps with negotiation and, if you can be authentic and intentional, it will inspire those around you.”

This article was originally published in Raconteur’s Future CFO report in March 2021