According to this article, HRD & CMO will be silently fading into the background while CFO is bound to be more indispensable despite putting up with steerage level of tight "financial leadership" and lingering in noncomfort zone. (EJ)
The year of the CFO
Economist, Nov 19th 2008
From The World in 2009 print edition
By Lucy Kellaway
Corporate life won't be funny
PREPARE for the year of the finance director. In 2009 the world will find out just how bad corporate balance sheets really are, and companies—most of which escaped the early effects of the credit crunch—will start to find it trickier to raise money. Add to that the upward push in costs and downward slide in demand, and the chief financial officer (CFO) will be called upon to shore up the P&L too.
The implications of his ascendancy will be felt far beyond the figures and will last much longer than it takes to make them look healthy again. There will be a shift in the balance of power in the boardroom, which will affect how companies are managed, what it feels like to work in them, the culture of business and even its language.
For the past decade the prevailing wind in boardrooms has been gentle. Emotional intelligence and innovation have been what counted, and what leaders professed to value. But those ideas are all but finished. No one will talk of EQ ("emotional intelligence quotient") any more. It will be EVA ("economic value added") instead. Thinking outside the box (an over-rated activity at the best of times) will not be celebrated. Ticking boxes will be.
As financial skills are valued more highly, CFOs will make it to the corner office in greater numbers than before. Recession, credit crunch and the increasingly complex nature of global companies will all play directly into the bean counter's hands. Nominations committees will throw their trust behind the guy who has protected the creditworthiness of a company in hard times and won the trust of the market; they will pick him for the top slot rather than poaching an expensive star CEO from outside. This will be bad news for headhunters (who will vainly try to make good the shortfall by meddling in internal succession instead), but also bad news for CEOs' bank balances as top salaries will halt their ever-upward march.
Leadership style at the top will change. Big personalities have been out of fashion at the top for some years; in 2009 they will be more out than ever. However, egalitarianism and empowerment will also be on the way out; management by fiat is going to make a stealthy return.
In the boardrooms, the firm slap of leadership will be felt. "Execution" will no longer be a management fad, it will be a part of daily life. We will hear less of "vision" and much more of "value".
Goodbye "talent", hello "staff"
The biggest loser in the struggle for power will be the human resources director. In the past five years HR has been enjoying the greatest power it has ever had. The "war for talent", which companies have fought tooth and nail, will be over in 2008, neither lost nor won: there will be a ceasefire brought on by lack of funds and exhaustion of the troops. An old truth will be whispered by the brave: most workers are not terribly talented and most of them don't need to be, as most jobs don't require it. In 2009 a more elitist shift will occur: companies will worry about the performance of those at the top of the pyramid, while everyone else will be managed like a commodity. "Talent" will be a word we wave goodbye to. In 2009 the word "staff" will make a comeback, as will "headcount".
In this new world the HR director might just cling on to his title, but his job will be downgraded to personnel and in particular to payroll.
The marketing director will also lose out. He has already been kicked once by the decline of advertising and kicked again as the power of the internet has made his traditional tools useless. In 2009 his budgets will fall further, as will his status. As for the corporate-social-responsibility supremo, he will be told to take a gap year indefinitely.
The firm financial leadership will be welcome in that it will help companies survive, yet being a corporate foot-soldier in 2009 is not going to be enjoyable. Moaning will be on the rise as inexorably as expenses will be on the decline.
There will be less foreign travel, which will make work more efficient but duller. And there will be no more free champagne in first class—it will be steerage only. Expense-account lunches and subsidised health clubs will be slashed, and stationery cupboards will be thinly stocked.
One blessed thing will be cut: weekend offsite meetings in luxury hotels. Instead, if managers feel the need to bond at all it will be done more quickly over a cup of tea from the vending machine. There will be no more laughter workshops led by an outsourced facilitator—but then in the new world of 2009 there is not going to be a lot to laugh about.
Lucy Kellaway is a columnist at the Financial Times and author of "The Answers: All the Office Questions You Never Dared to Ask"
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