Good morning. Generative AI is set to transform business, but what does it mean for your people? Lynda Gratton, a human capital expert and professor of management practice at London Business School, wants C-suite leaders to keep that question in mind.
During an interesting MIT Sloan Management Review webinar yesterday, “What AI means for human capital,” Gratton discussed how generative AI, with its easily accessible nature and advanced automation, is providing an opportunity to redefine work.
“For me, as a psychologist, the issue is about the nature of work, which is to say, ‘Why do we work? And what do we get out of it?'” she explained. “If we lose sight of that question, then we just become entirely transactional.”
Gratton, also the founder of HSM Advisory, a London-based research advisory group, shared that based on what she’s hearing from clients around the world, there are three main areas where generative AI is affecting a firm’s “people strategy.”
For starters, there’s talent development, which includes recruitment and induction, and career management. “There’s lots of work now being done with chatbots and generative AI to help you understand yourself,” she said. Secondly, there’s productivity, which involves assessment, feedback, skills, training, and managing collaboration. But the area where she’s seeing the most activity is change management—or internal knowledge and external knowledge management.
“I’ve been studying companies now for 30 years, and one of the things that we felt really worried about is that we have so much knowledge in our organizations, but we don’t know where it is,” Gratton explained. “We don’t know how to find it. And it seems to me that this is an area that we’re really focusing on in terms of generative AI.”
For example, the British multinational law firm Allen & Overy LLP is experimenting with generative AI to access all the company’s cases and drafting contracts, she said. McKinsey & Company is using “Lilli” for internal knowledge management. “It’s a platform that provides a streamlined, impartial search and synthesis of the firm’s vast stores of knowledge to bring our best insights, quickly and efficiently, to clients,” according to the firm. Meanwhile, Morgan Stanley is using a generative AI solution to help with wealth management advice to clients, Gratton said.
“It would be a big mistake if we saw generative AI simply as a substitution technology,” she said. “If we want, as humans, to get the most from this amazing technology, we have got to see it as an augmentation process.”
Have a good weekend.
Sheryl Estrada
sheryl.estrada@fortune.com
Upcoming event: Fortune’s CFO Collaborative is an invitation-only group of CFOs from leading companies that meets virtually and in person for deep-dive discussions on what’s top of mind.
Next month, our topic will be “Determining the value proposition for GenAI.” In this intimate dinner discussion, scheduled for Feb. 28 in Houston and hosted in partnership with Workday and Deloitte, we’ll explore how companies can best capitalize on the AI Revolution and the operational and organizational changes required for businesses to incorporate GenAI.
Join me and Fortune senior editor-at-large Geoff Colvin for a discussion with Niccolo de Masi, chairman of The Futurum Group, a global technology advisory, and leading CFOs from Houston and beyond.
It’s an invite-only event, but CFOs can apply to attend here. If you’d like more information, please send an email to: CFOCollaborative@Fortune.com
Leaderboard
Some notable moves this week:
François-Xavier Roger was named CFO at Sanofi, effective April 1. He will succeed Jean-Baptiste Chasseloup de Chatillon. Roger will join from Nestle, where he has been the CFO for more than eight years. Before Nestlé, he was the CFO of Takeda Pharmaceuticals, based in Japan. He was also the CFO for Danone Asia, head of finance and treasury and tax for the Danone Group, and CFO of Millicom.
Anne Mehlman, EVP and CFO at Crocs, Inc. (Nasdaq: CROX), a casual footwear company, was promoted to EVP and president. Mehlman succeeds Michelle Poole, who has decided to retire. Poole will remain in her current role through early May and will serve as an advisor until early 2025. Mehlman will continue to serve as CFO as Crocs, Inc. conducts a search for her replacement. Mehlman re-joined the company as CFO in 2018, after leaving Crocs in 2016 to serve as CFO of Zappos.com.
Scarlett O’Sullivan was named CFO at Leaf Home, a technology-enabled direct-to-consumer provider of home improvement products and solutions. Before joining Leaf Home, O’Sullivan spent nearly eight years as CFO at Rent the Runway, helping to take the company public in 2021. Before that, O’Sullivan led technology IPOs as an investment banker and through venture capital investment experience at SoftBank.
Renee Gaeta was named CFO at Shockwave Medical, Inc. (Nasdaq: SWAV), effective Feb. 5, 2024. Gaeta succeeds Dan Puckett, CFO at Shockwave since 2016, who previously announced his decision to retire. Gaeta most recently served as CFO at Eko Health. Before that, she was CFO and a member of the executive team at Establishment Labs Holdings, Inc. where she played a key role in the company’s initial public offering.
Philip Moon was named CFO at Homebase, an HR and team management app. Moon previously worked with Morgan Stanley advising clients on mergers and acquisitions followed by investing roles at TPG and Empyrean Capital Partners. He was also previously strategic finance lead at Square, head of strategic finance at Eero, VP of strategic finance at Grove Collaborative, and most recently, head of finance at CloudTrucks.
Stacy McLaughlin was named CFO at Splash Beverage Group, Inc. (NYSE American: SBEV), a portfolio company of beverage brands, effective Jan. 24. Before joining Splash, McLaughlin was the CFO of Material Technologies Corp. She was also previously VP and CFO of Willdan Group, Inc. Before that, McLaughlin was from senior associate at Windes & McClaughry Accountancy Corporation, and senior audit associate at KPMG LLP.
Victor Hwei was named CFO at Oomnitza, a provider of enterprise technology management solutions. Most recently, Hwei served as the leader of the finance, strategy, and corporate development teams at Pantheon. Before that, he held multiple operational and financial leadership roles at New Relic. Hwei's experience also includes positions as an investment banker at Morgan Stanley and UBS.
Big deal
Morgan Stanley’s E-Trade released data from its monthly sector rotation study. The results are based on the trading platform’s customer notional net percentage buy/sell behavior for stocks that comprise the S&P 500 sectors.
After net-selling across the board in December, traders took a measured approach in January with net buying in six of the 11 sectors, according to Chris Larkin, managing director of trading and investing at E-Trade from Morgan Stanley. "It’s no surprise traders gravitated toward tech, but it was actually chips driving activity—with concentrated buying in NVDA and AMD—not the Magnificent Seven," Larkin said in a statement. Amid rising oil prices, traders were net buyers in energy. On the other hand, there was a steep sell-off in consumer staples, real estate, and health care. This means "traders are risk-on," Larkin said.
Going deeper
Here are a few Fortune weekend reads:
"Elon Musk hates Delaware now. Here’s why millions of businesses love it" by Alicia Adamczyk
"Group led by Carlyle’s David Rubenstein, a Baltimore native, agrees to buy the Orioles for more than $1.7 billion" by Luisa Beltran
"Review: In ‘Read Write Own,’ venture capitalist Chris Dixon makes a serious case for crypto in wake of FTX debacle" by Jeff John Roberts
"The 3 daily tricks Jay Shetty says will help you master a growth mindset and achieve your goals" by Alexa Mikhail
Overheard
“There are hundreds of billions of publicly shared images and tens of billions of public videos, which we estimate is greater than the common crawl data set."
—Meta CEO Mark Zuckerberg said during the company's earnings call on Thursday. That was a dig at Microsoft, OpenAI, and Google, which train their AI models on the public web data crawled by their search engines, Fortune reports.
This is the web version of CFO Daily, a newsletter on the trends and individuals shaping corporate finance. Sign up for free.