CFOs are dealing with “unprecedented uncertainty”, says Pierre Heistein, business analyst, economics instructor and regular columnist for Business Report. Heistein will be one of the speakers at CFO South Africa’s 13 March event ‘Get Smart in 2014’ and he is keen to address ways to tackle that uncertainty. “I especially want to look at what type of people you need to deal with this. There needs to be a rethink about how labour is used.”
Using examples from his own life, the South African economy and business around the world, Heistein aims to highlight "the changing workforce that is moving in". He emphasizes that he doesn't mean the cost-saving and other benefits of letting employees work from home. "What I want to talk about is the flexibility your new employees need. Can they work remotely or on demand? The best accountant in the world might not be good enough for the finance vacancy you have, because it might not be an accountant that you need after a while."
Doing nothing is not an option, says Heistein. "You have to decide how your company responds when new competitors take you on and invent new models. This is crucial as we are confronted with the major challenge for 2014, which is uncertainty. Are we out of the recession or are we getting back into it? Is China on the way up or down? Is our currency going up or down? This requires a new type of worker. The skills needed these days are different."
Heistein has a background in economics. He studied at the University of Cape Town (UCT) and did his masters in quota management in the fishing industry. Besides his work as a columnist and course instructor in Applied Economics, he also compiles reports for a US-based management consulting firm, 10EQS, as well as doing work in Argentina. "I really enjoy the writing and the consulting is also very diverse, spread out over a lot of different countries and industries," says Heistein. "I also love teaching, whether it is young students or professionals who want to learn more about economics. At the same time I learn from them."
Heistein acknowledges economists haven't been very popular lately, after they utterly failed to predict the economic crisis that engulfed most of the world. "People don´t pay for uncertainty. Yet the interaction between information and factors that economists need to forecast future movements are often uncertain in their own right. I once wrote a very unpopular article, where I listed factors and admitted I didn't know where those would lead. People don't like that - there´s a fine line between cowardice and keeping one´s integrity. The economic crash has defied a lot of rules, because the rules were wrong. It has changed the type of economics we practice now. There is a movement towards emphasizing quality, unknowns and social aspects."
That fits right in with Heistein's view of economics as a 'social science'. "Essentially no economic principle is completely without human emotion behind it," he says. "In some countries an economic crash means the currency collapses, in others it gains value during a crash. There are endless examples where rationality does not apply, but human emotions do. That makes it interesting. There is no calculation about what the people on the reserve bank committee think about interest rates, for example, the people that make that decision are humans and are subject to qualitative influences."
Heistein goes as far as saying that "without seeing economics as a social science, you will never understand what is going on". In certain circles the importance of this is underestimated, he thinks. "The problem is money can be quantified and emotions can't. But there is a misconception that economy is about money, when in fact the essence of economy is getting the most output out of the least input. That starts by everybody trying to decide how to maximize the most basic of resources - time. In that sense we're all experts."
Meet Pierre during the CFO South Africa Event "Get Smart in 2014" March 13 at the beautiful Saxon Boutique Hotel and register here.
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