Finance flash: the TOP-10 articles of week 19, 2017


Do you want to keep up to date with the latest developments in finance, but you are short of time? Don’t worry. CFO South Africa weekly collects 10 of the most important articles from international media for your convenience.

1. Malcolm Gladwell Says This Is the 1 Stunning Thing People Get Wrong...
Absurdly Driven looks at the world of business with a skeptical eye and a firmly rooted tongue in cheek. Wouldn't it be terrible if you've been reading the wrong self-help books and following the wrong business gurus? They sound like they know what they're talking about, don't they? But what if it's all nonsense? Indeed, Malcolm Gladwell, a fascinating purveyor of patterns that may or may not hold the secret to eternal life, believes that there's one conventional business guru wisdom that's actually holding you back.

2. Another Reason Piketty, Saez And Zucman Are Wrong - The Welfare State
For some time now I've been arguing that our usual estimations of wealth inequality are wrong, so much so that they're entirely wrong. The figures that are derived from the various studies end up looking only at transferable wealth. So, financial assets owned, housing, private pensions, minus debt, and that's how "wealthy" someone is. This is entirely wrong for two reasons, one being human capital the second being the existence of the welfare state.

3. Warren Buffett says AI will lead to fewer jobs, warning future coul...
Nearly two decades ago, a 10-year-old shareholder stood in front of a microphone here and asked Warren Buffett how the Internet would reshape companies. It was 2000. Buffett, the chairman and CEO of Berkshire Hathaway, said fairly little. He saw a threat in the Internet, but said he was unsure how it would ultimately affect his investments. On Saturday, that same shareholder, Thomas Kamei, now a 27-year-old investor based in New York, submitted an updated version of his question at Berkshire's annual meeting. This time, Kamei focused on artificial intelligence, a technology that threatens to upend the economy just as the Internet did years before. What did Buffett make of it?

4. Crafting a killer value proposition statement
Think of an organisation that has a stellar reputation for elegantly solving customer problems. Now think of one that struggles to solve customer problems. The former tends to grow and satisfy markets. The latter usually doesn't survive long. One major difference between the two is often the strength of their value propositions. A value proposition is a statement about the value that your product, service, or innovation provides to a target customer. The concept has existed since the dawn of commerce, but the term value proposition really came into vogue in the late 1980s. Properly adopted, the value proposition can be a great catalyst for customer-focused innovation.

5. What does the agile finance function look like?
An agile organisation is fit, alert, flexible, and nimble. It is efficient, profitable, liquid, and resilient. It is aware of how the business generates value, alert to threats in the marketplace, and looking out for opportunities. It is able to develop strategies and implement them promptly. It is nimble in performance management, able to build and test ideas swiftly, and scale up quickly if they work or try something else if they fail, constantly re-allocating resources to where returns or prospects are best.

6. What's the Definition of an Outsourced CFO?
Have you ever thought about leaving your high-pressure finance job to hang out your own shingle and work as a contract CFO for small, entrepreneurial companies? Not that such work isn't pressurized. The point is that if you think you might like that change of scenery, there is greater opportunity to make the switch now than ever.

7. Obsess Over Your Customers, Not Your Rivals
The starting point of most competitive analysis is a question: Who is your competition? That's because most companies view their competition as another brand, product, or service. But smart leaders and organizations go broader. The question is not who your competition is but what it is. And the answer is this: Your competition is any and every obstacle your customers encounter along their journeys to solving the human, high-level problems your company exists to solve.

8. A case study in combating bias
Following several disappointing investments, the German electric utility RWE overhauled its decision-making processes. Learn how from the CFO who spearheaded the effort.
The Quarterly: Tell us a bit about the circumstances that motivated RWE's management to undertake a broad debiasing operation...

9. Are you ready to decide?
Before doing so, executives should ask themselves two sets of questions. Good managers—even great ones—can make spectacularly bad choices. Some of them result from bad luck or poor timing, but a large body of research suggests that many are caused by cognitive and behavioral biases. While techniques to "debias" decision making do exist, it's often difficult for executives, whose own biases may be part of the problem, to know when they are worth applying.

10. Globalization's ongoing challenge
The short-term nature?of election cycles coupled with tough tariffs and foreign subsidy programs are just some of the factors that have led to the globalization quandary, particularly in emerging markets. In this interview with McKinsey's Rik Kirkland, global economist and author Dambisa Moyo discusses the current state of globalization and what can be done to better deliver on its promises.

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