Now that the furor over Brexit has simmered down and some of the excitement has worn off, it’s interesting to note the chatter about the root cause of the decision. One of the theories put forward most loudly is that those in favor of leaving the EU were heavily represented by workers in the industrial regions of Great Britain and those who voted to stay were mostly comprised of workers in the financial centers of London. The “stay” faction thrives on access to free trade and globalization while the “leave” group feels they have been harmed due to globalization.
All the uproar of Brexit puts me in mind of another struggle over a very similar issue in Great Britain that occurred over two hundred years ago (albeit with a very different outcome). The parallels are quite interesting…
Back in early 19th century, a “battle” broke out between textile workers and the proponents of technology that essentially eliminated these workers’ profession. Thanks to the Industrial Revolution, these laborers didn’t have any more work.
The Industrial Revolution’s push to implement new technologies that would lead to the obsolescence of these manual jobs created a region-wide rebellion. Northwestern England faced military force from the rest of England who agreed with industrialization.
This rebellion of the working class laborers gained a folk hero in the form of Ned Ludd. Ludd allegedly destroyed 2 stocking frames in a fit of rage in the late 1700s, and was nicknamed “the machine destroyer.”
A Luddite, in short, is someone who denies the emergence of technology and refuses to adapt. The term Luddite fell into use in the 1800s as part of the rising tide of discontent among the English working class. Initially, this term referred to individuals who, like Ned Ludd, were known to smash machines in an attempt to forestall the advance of technology. Eventually, all who opposed the Industrial Revolution were called Luddites.
This description (Luddite) shares two sides: those who reject technology and those who adapt and utilize technology to their advantage. Since the early 1800s, many have not used this term widely until the 20th century. The modern Luddite is more likely to be called a “technophobe.”
Neo-Luddism is a relatively recent philosophy that opposes many different forms of technology. You can see elements of Neo-Luddism today in movements such as Brexit.
The EU referendum had two parties: Brexit (Anti-EU labor parties) and Pro-EU Labor parties. Those for Brexit were generally located in the same northwestern region where the term Luddite was born. Globalization has hurt that region. The advancement of technology is seen as something bad, whereas London (a financial hub) optimizes technology to their benefit.
Neo-Luddism isn’t only a British phenomenon. Ever heard of the Rust Belt? It’s the region between New York and the Midwest where steel manufacturing and other forms of manufacturing were once the dominant industry. Because of the decline in industrial demand, the once lively industrial hub is now rusted. Many of the companies in that area failed to combat off-shoring or outsourcing. They did they because they neglected to adapt to better technologies.
The philosophy of Neo-Luddism can have major financial implications. Regions that were once thriving are now hubs for decay and crime. These formerly great cities struggle to break free of this “Financial Luddism” and reinvent themselves.
What is a financial Luddite? If you’ve read any of our posts, you’ve heard us say (sometimes shout) that the role of a Controller or accountant is becoming automated. These roles must adapt to new technologies or they will soon go the way of the weaver in the Industrial Revolution.
In a study published by Accenture in 2014, they found that 43% of C-suite executives believed their sales team adopted new or better technologies. Only 20% of the same group believed that their financial teams were doing the same.
Why is it that? Over the past 25 years consulting with CFOs, I’ve noticed that financial people tend to be late adopters. They are the people that are now just getting a smart phone. Whereas salesmen got their iPhone 1 early 2007 when it was first launched. While a regular flip phone fulfills its role as a mobile device, the industry now demands that you have a fully functioning computer that can fit in the palm of your hand.
Dr. Christian Campagna, managing director of Accenture Strategy, said that “there is also an emerging role for the CFO in driving and assessing digital technology investments.” Technology and all things digital have become the backbone upon which we operate. For example, look back 10-20 years. The Internet was not particularly prevalent. Now, if you don’t have your smart device to Google a question, you feel lost in the wilderness. Well, maybe that’s a little dramatic. You get the gist. Technology is an asset that should not only embraced, but optimized.
Technology is not stealing jobs. Rather technology is creating new roles. The advancement of technology still requires people. We haven’t quite reached the iRobot stage where artificial intelligence takes over our role completely…
Begin to transform your thought process from:
“Technology is the worst and is useless“
“Technology is my best friend and is able to help me perform my job better.”
This transition from thinking like a Luddite to a wingman is imperative to achieve success. CEOs have clearly stated that they want their CFOs or financial leaders to be a wingman. Typically, a CEO has a sales background and are more of the early-adopter personality. A wingman needs to emerge from the Luddite age and turn into someone who adopts new technology. Learn from the Luddites – you can’t fight the march of progress so, lead, follow, or get out of the way.
Dr. Campagna put it best,
[quote]”The finance function has played a vital role in helping companies to overcome the challenges of the past few years, and the Chief Financial Officer (CFO) is now the Chief Executive Officer’s (CEO) go-to partner for driving operational transformation and strategic execution. CFOs have helped companies to impose the discipline over costs, cash and capital that has been necessary for survival, and advised business leaders on how to allocate scarce resources against a highly challenging backdrop. Such influence is even clearer among high-performance businesses. Thus the CFO can be the architect of business value, providing the means, the tools and the acumen to design for and deliver valuable business outcomes.”[/quote]
[box]Strategic CFO Lab Member Extra
Access your Projections Execution Plan in SCFO Lab. The step-by-step plan to get ahead of your cash flow.
Click here to access your Execution Plan. Not a Lab Member?