1 The role of Accountants and Finance Professionals

1 The role of Accountants and Finance Professionals in operational, general and strategic management NAVIGATING THE VUCA BUSINESS ENVIRONMENT CREATING SUSTAINABLE VALUE FOR ALL STAKEHOLDERS O. Mavengere 0242 758 464 omavengere@zetdc. co. zw

VUCA? ? ? 2

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Definitions of the types of Management Operational Management General Management Operational management is the administration of business practices to create the highest level of efficiency possible within an organization. It is concerned with converting materials and labor into goods and services as efficiently as possible to maximize the profit of an organization. Operations management teams attempt to balance costs with revenue to achieve the highest net operating profit possible. General Management is the Executive or Senior role within a company, overseeing most or all of a firm’s functions. Contrary to functional managers, general managers have a broad, overall responsibility for profit or loss in a company or strategic business unit and they manage across all or at least multiple functions for example finance – marketing functions. Strategic Management Strategic management involves the formulation and implementation of the major goals and initiatives taken by an organization's top management on behalf of owners, based on consideration of resources and an assessment of the internal and external environments in which the organization operates. [ 4

The role of Accountants and Finance Professionals Assist with corporate strategy, provide advice and help businesses to reduce costs, improve their top line and mitigate risks. Governing the organization (such as, approving annual budgets and accounting to the stakeholders for the company’s performance). Appointing the chief executive; and determining management’s compensation. Having oversight over all matters relating to the company’s financial health. This includes creating and driving the strategic direction of the business to analyzing, creating and communicating financial information. 5

The role of Accountants and Finance Professionals (cont. ) As internal auditors, professional accountants provide independent assurance to management that the organization’s risk management, governance and internal control processes are operating effectively. In the public sector, professional accountants in government shape fiscal policies that had far-reaching impacts on the lives of many. Accountants and Finance Professionals in academia are tasked with the important role of imparting the knowledge, skills and ethical underpinnings of the profession to the next generation. 6

Evolving Role in an Evolving Environment Like other professions, professional accountants are increasingly challenged to demonstrate their relevance in the capital market and their ability to evolve and face new challenges. Their ability to continue to fulfill these roles in the face of constant environmental changes is vital to their continued relevance. Professional accounting bodies also need to pay attention to their members in business and provide them with the support they need in order to succeed in their roles in an unstable environment. Achieving success on all these fronts will drive continued recognition by society of the value of professional accountants in business. This shapes the continued success of the accountancy profession as a whole. 7

8 The VUCA environment is a jungle The Finance Professional must navigate through a tough and complex business world. The role now has to be played with more skill and tact. Quick and effective decisions have to be made on a daily basis.

Many finance personnel and senior business leaders are accountable to their investors for the profits and losses that they incur while they are at the helm of business operations. They do not leave business decisions to chance and require a great deal of information regarding the financial performance of their companies. 9

VUCA leadership 10

11 There are serious disruptions in the normal business processes and environment

Disruptions in the normal business processes AI Local uncertainties Social media esp. Twitter and Whats. App Global recession “America first” Clean energy Commodity prices 12

Artificial versus natural intelligence Artificial intelligence (AI) is a term used to describe intelligence demonstrated by machines. AI programs may mimic or simulate cognitive behaviors or traits associated with human intelligence such as reasoning, problem solving and learning. With time, the role of Finance professionals is being transformed and also interrupted by AI. Robots and machines are rapidly evolving from being able to perform the more mundane, repetitive tasks to being able to solve more complex problems. It is now critical for every professional to consider the implications and opportunities that come with AI. 13

Artificial intelligence Artificial versus natural intelligence Are we going to be rendered useless? ? ? http: //www. slate. com/articles/technology/future_tense/2017/11/what_rights_does_a_robot_get_with_citizenship. html http: //www. digitalspy. com/tech/feature/a 806261/9 -robots-ready-to-take-your-job-from-driverless-taxis-to-robot-prostitutes/ 14

Artificial intelligence Artificial versus natural intelligence. . . Thrive in the dynamic world of evolving technology AI opens up and breeds new industries and opportunities for the workforce, a good example of an arising opportunity is venturing into Digital Engineering. Harness the art of creating, capturing and integrating data using a digital skillset. . Through progressive applications, the art of digital engineering enables designers to explore possibilities and develop innovative solutions in a virtual environment. Sharpen your natural intelligence at every step. Human intelligence is what shapes the emergence and adoption of artificial intelligence. It is needed for designing and utilizing AI technology. 15

Local uncertainties Bond/RTGS/USD Panic in the market Hoarding and fear Other 16

Social media Twitter Facebook You. Tube Whats. App groups https: //gadgets. ndtv. com/apps/news/whatsapp-forwarded-message-feature-android-beta-2 -18 -67 -how-to-use-1818063 17

Globalisation Global recession “America first” Clean energy and going green 18

19 Finance cannot continue in the current traditional way of thinking.

The shift in role of Accountants and Finance Professionals Historically, accountants occupied the position of “bean-counters, ” which essentially focused on what happened in the past, not on what the future of the business holds. Now accountants have to look into the future and also take the role of their organization’s advisor. An advisor with accounting or finance credentials can improve ineffective operational systems that cut company margins. Even if you show quarter-overquarter growth for a few years, you might be “settling” by failing to recognize waste in the design of company procedures. An accountant can add value to a business in a variety of ways. An accountant is an excellent fit to fill in the financial blanks in everything from quarterly tax filings to cost projections for the upcoming quarter. An accountant can look at the company’s progress from a financial perspective – perhaps the only individual who is counting up avoidable expenses to improve ROI. 20

The shift in the role of Accountants and Finance Professionals In a fast paced world where stiff competition and change are the norms the Accountant and finance person needs to create a competitive edge at a personal level as well as for the organization which they are serving. The Accountant now needs to be more proactive. It is now necessary to take a leading role. . . To think of the bigger picture when analyzing a company’s financials, communicate more effectively instead of being reserved, delegate more and be the competent team player. 21

The shift in the role of Accountants and Finance Professionals The traditional role of the Finance Professional/ Accountant; Accounting for what has been done Historical Risk averse Taught to account and not to invent / dream Highly regulated process Good strategists are not accountants but they need the accountant Greatest potential to be the organization's strategist Break out of accounting but use the accounting knowledge 22

The shift in the role of Accountants and Finance Professionals The Accountant’s and Finance personnel’s role has changed from the simple traditional role of simple Stewardship, Preservation and Tight finance operation. The contemporary role now demands a; Resource mobilizer Catalyst, precipitating change and transformation for them self and the organization as a whole. Accounting for Organizational effectiveness Formulation and Implementation Strategist 23

The shift in the role of Accountants and Finance Professionals The key to success in this ever- evolving Finance role is to practice Analytical thinking based on history to gain an understanding of how things work Scenario planning - dismantling the historical formula. Think about how could things work, inferring history into future. Drawing the vision (the future) to now and rebuilding or recreating the formula – clowning. Development thinking - Bringing analytical results as input into strategy development. 24

The shift in the role of Accountants and Finance Professionals Execution thinking – this involves the implementation of formulated strategies. Creating movement, traction and momentum. Momentum maintenance - Continuous shared belief regardless of the perceived risks. It is about being relentless. Risk and hazard management is also a part of momentum maintenance. Strategic management is not routine management. Its exploration Its successful risk management. Regular honest reviews / evaluations need to be done periodically to stay in the right lane. 25

The shift in the role of Accountants and Finance Professionals Understand the purpose and philosophy of the business Participate in the conversations and debates about the future of the business positively. Provide financial interpretation Contribute functionally to strategy development. Join with colleagues on the wheel. Demonstrate leadership potential. Leadership is about leading people 26

The shift in the role of Accountants and Finance Professionals Leading people – the major component is Influencing people. Developing and sharing the vision, creating understanding, keeping the people with you. Define the goals and objectives. Create an effective team. Developing and executing – evaluate the strategy as a team. Evaluating – dismantling and reformatting the team, taking responsibility for success or failure of the team. Account to the board responsibly. 27

Surviving and thriving in a VUCA world Stay conversant with all aspects of the business – people, processes, products, price and market. Capitalize on every slightest opportunity you identify. Perform beyond your defined role. There is an increasing demand for more talent, more innovation from organizations and the whole business world. Practice effective team work. Our society is becoming more interdependent than ever. Collaborate, at individual, departmental and at company level. Embrace transformation – agility is the key to success in a VUCA environment. Realize the positive effects of change and make quick decisions. It is necessary to challenge traditional ways at times. 28

29 Success has no boundaries, we can go beyond our current vision • Agility and Resilience are key to thriving in the world where change is the only constant.

30 Examples…

Lenovo 31

Lenovo 32 Lenovo-Company Profile Lenovo Group Limited is a leading Chinese multinational technology company with its headquarters at Beijing, China, and Morrisville, North Carolina, United States. Lenovo operates in more than 60 countries and sells its products in 160 countries , it was founded in Beijing in 1984. It sells personal computers, tablet computers, smartphones, workstations, servers, electronic storage devices, IT management software and smart televisions. In 2012 Lenovo was the world's second-largest personal computer vendor by unit sales.

Lenovo Founding and early history Lenovo was founded with a group of ten engineers in Beijing , it was officially founded on 1 November 1984. Their first effort to import televisions, failed. They rebuilt their business in a year by conducting quality checks on computers thus Lenovo started making circuit board that would allow IBM-compatible personal computers to process Chinese characters. This venture was a success. What is your philosophy for failure? ? ? 33

Lenovo Success does not come on a silver platter. You might not get it right the first time. You need to be able to pick yourself up after the first, second and hundredth failure. Failure is not personal, in fact it is inevitable in the VUCA world. Take lessons from every letdown and quickly move on. The growth attitude is a going attitude. Keep moving, make the necessary adjustments and stride on after disappointments. 34

Lenovo tried and failed to market a digital watch as their marketing abilities was not effective. Thus Lenovo's early difficulties were due to the fact that its staff had little business experience. They mainly comprised of scientists and did not know the market. In 1990, Lenovo started manufacturing and market computers by its own brand name 35

Lenovo the second largest PC maker has took up VUCA model for its formation and evolution as a company. natural disasters, political turmoil, the global financial crisis and hypercompetition were the VUCA times witnessed by Lenovo to grow into a US$30 billion company with over 27, 000 employees. The company has walked a long journey of success and challenges. They have managed to brave the storms of an ever changing business world through adaptability. They have done mergers and acquisitions with companies such as BMI, NEC and Digibras. All these have been part of their survival and thriving strategy. The success of Lenovo has come through the adoption of an excellent culture. They have made it a point to protect their areas of strength whilst attacking their challenges and competition. 36

Qoute You need to keep trying. . . The day you give up is the day you die mentally. 37

The day of lamentation They did not do anything wrong but they somehow lost. 38

The day of lamentation Nokia’s downfall Nokia may remind most of us of the first and most prominent mobile phones we ever encountered. The company was established in 1865 by mining engineer Fredrik Idestam at the Tammerkoski Rapids in south-western Finland. Nokia launched the world's first international cellular system dubbed Nordic Mobile Telephone network, which linked Sweden, Denmark, Norway, and Finland. This was followed by the launch of the company’s as well as world’s first car-phone dubbed Mobira Senator, which weighed in at around 10 kg. 39

The day of lamentation Nokia’s downfall It was in the year 2001, when Nokia’s profits first crumbled after becoming the top phone maker in the world. This was primarily due to a slowdown in mobile phone market. That downfall turned out to be short-lived, but three years later, in 2004, the company again reported that it’s market share is sliding, despite still leading with the solid 35%. Another hiccup came in 2007, when the company had to recall a whopping 46 million faulty cell-phone batteries. What’s even worse was that the batteries which were manufactured between 2005 and 2006 appeared in a wide range of Nokia phones, which meant that a large part of the company’s device portfolio was affected. In 2008, the same year when the Android version 1. 0 was launched - Nokia’s Q 3 profits nosedived 30%, while sales decreased 3. 1%. On the other hand, i. Phone sales sky-rocketed by around 330% during the same period. 40

The day of lamentation Nokia’s downfall Elop became famous for a speech that he delivered to Nokia employees in early 2011, wherein he compared the company’s market position to a man standing on a "burning platform. " Quite evidently, the company’s situation was going from bad to worse. Despite decent sales, the new Windows Phone devices couldn’t do much for Nokia in Q 1, 2012, when the company suffered an operating loss of a whopping € 1. 3 billion. This was followed by another round of job cuts, affecting around 10, 000 employees this time. The company’s unwillingness to embrace drastic change when it was required the most was probably the biggest reason that brought the mobile giant down. The company took way too long to embrace the smartphone revolution and when it finally did it made way too many errors in its strategy. 41

The day of lamentation Escape the trouble of such a day “The whole world has changed in profound ways, ” quotes Thomas Friedman. Financial turbulence has increased in intensity and persists longer than in the past. organizations and professionals today must shift their business models and their leadership skills to become “adaptive firms. ” Adaptive firms can adjust and learn better, faster, and more economically than their peers, giving them an “adaptive advantage. ” Make continuous shifts in people, process, technology, and structure. This requires flexibility and quickness in decision making. ” Stay fit for the struggle of change, may your day of lamentation never come! 42

Conclusion • We are facing a time of ongoing change and challenge. In order to survive the battle of the fittest the Accountant or Finance Professional must strive to remain relevant and competitive. • Uncertainty brings tremendous opportunity to thrive for the resilient and agile individual and organization. • Those of us who take control of our skills development and invest time in learning how to learn, will ultimately be the finance leaders of the future. . . Choose to belong to this group today! 43

44 The end Thank You