Finance flash: the TOP-10 articles of week 22, 2018


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. The Right Way to Respond to Negative Feedback
Feedback, as they say, is a gift. Research bears this out, suggesting that it’s a key driver of performance and leadership effectiveness. Negative feedback in particular can be valuable because it allows us to monitor our performance and alerts us to important changes we need to make. And indeed, leaders who ask for critical feedback are seen as more effective by superiors, employees, and peers, while those who seek primarily positive feedback are rated lower in effectiveness.

2. When Customers Are — and Aren’t — OK with Personalized Prices
Let’s be clear: price differentiation is not a new phenomenon. We encounter it regularly and, as consumers, often profit from it. Market-goers can sometimes get bargain prices on fruit and vegetables if they come at the end of the day as the stallholders are packing up.  Frequent customers get discounts through loyalty programs.  And there’s no objection to these kinds of price discrimination. Despite that, people do have issues with the general idea of price differentiation. We exposed a representative sample of consumers to different types of differentiated pricing in a large-scale experiment and found that they did not like the idea in principle regardless of whether or not they benefited from the initiative.

3. Three Things the Best Leaders Do to Improve Performance Reviews
The thinking and policies regarding performance reviews have experienced a shift within organizations. HR researcher Josh Bersin estimated as many as 70 percent of multinational companies are moving away from the outdated annual review approach to performance management. In the last five years, corporations including GE, Adobe, Microsoft, and Dell have axed annual performance reviews.

4. Rachel Reeves tells FDs to look beyond Big Four
Rachel Reeves, chair of the Business, Energy and Industrial Strategy (BEIS) Committee, has demanded finance directors help bring about the appointment of a wider set of auditors. Following the joint Work and Pensions and BEIS committees’ report on the collapse of Carillion which called for a competition review of the audit market, Labour’s Reeves told Financial Director: “Not all major companies need to go to the Big Four. I would encourage them to use smaller companies in the interests of supporting SMEs, and supporting a competitive market.”

5. Successfully transitioning to new leadership roles
Leadership changes are more common and important than ever. But most companies don’t get it right. Every leadership transition creates uncertainty. Will the new leader uncover and seize opportunities and assemble the right team? Will the changes be sustainable? Will a worthy successor be developed? These questions boil down to one: Will the leader be successful?

6. What 20 Years of Jeff Bezos's Shareholder Letters Can Teach You About Becoming a Top Performer
The year is 1997 and Amazon is going public. At the time of this event, many investors and people viewed the company as a joke. Another big event at that time was the first of what has now been 20 annual letters from Jeff Bezos. While these letters mostly garner attention from people due to highly impressive financial numbers, such as the recent letter disclosing 100 million paid Prime members globally and various leadership principles, there's much more wisdom and many success principles in these letters. I spent time over the past weekend reading all 20 of these letters and here are three of the most valuable lessons that you can use to become a top performer.

7. How finance can use digital transformation to inform business strategy
When one thinks of finance professionals, the traditional images that come to mind are often related to the numerous day-to-day tasks they undertake to keep the books in order. With their attention concentrated on critical financial tasks, it has been difficult for finance professionals to play a leading role in driving their firms’ business strategy — despite the fact that, as those best positioned to understand and analyze their firms’ financial data, they might also be the best able to improve these strategies.

8. China’s fast climb up the value chain
The Chinese are now the world’s most avid online purchasers of goods and services, which they are likely to pay for with a mobile device. The deepening digital ethos reflects a broader consumerization of the Chinese economy. These trends are creating fertile grounds for digital start-ups while also transforming traditional industries such as specialty chemicals as they supply materials for advanced industries and higher-margin consumer goods. Global companies in China should ensure that they’re not competing for yesterday’s markets.

9. Can Corporate Culture Bridge the Talent Gap?
This article is about human resources, but to the extent CFOs care about corporate culture and employees — and they should care about those things very much — I’m hoping it’s of interest to them. I’ve been in the HR field for three decades. A long time ago, we were called personnel managers. Then we became human resources managers. More recently, many of us were human capital managers. The latter title was, I think, a well-intentioned attempt to position the function as more strategic, but it never felt right to me. It communicates the importance of people as an asset while simultaneously dehumanizing them.

10. Why Firms Should Conduct Randomized Controlled Trials
Making mistakes and learning from them is par for the course for companies. But years of bad decisions could lead to the downfall of conglomerates. In the case of General Electric, a major engine of America’s economy for more than a century, the firm shook investor confidence when it announced last year that it would have to slash its stock dividend in half – only the second time it had to cut its dividend since the Great Depression. By the end of last year, General Electric shed more than US$100 billion in market value since November 2016, undone by a long history of overpriced acquisitions, opaque accounting and its overly complex business model.

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