Name: CFO Collaborative Boston Dinner: What will the CFO role look like in 2024
Uploaded: 2023-11-21
Duration: 17 min 17 s
Description: Andrew McAfee, Principal Research Scientist, MIT; Inaugural Visiting Fellow, Technology and Society, Google

Andrew McAfee, Principal Research Scientist, MIT; Inaugural Visiting Fellow, Technology and Society, Google

CFO Collaborative Boston Dinner: What will the CFO role look like in 2024

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CFO Collaborative Boston Dinner: What will the CFO role look like in 2024?

Good evening, everyone. Thank you so much for coming. Welcome to Fortune CFO Collaborative. I'm Cheryl Estrada, senior writer at Fortune and Writer of the CFO Daily. And it's my pleasure to welcome you here tonight together with Alan Murray, CEO of Fortune Fortune CFO Collaborative has been building a community of Finance Chiefs to help you navigate the changing landscape. We've covered lots of ground in the past few years from the economic shock waves of the pandemic to digital transformation talent challenges, esg cybersecurity, the future of capital investment and many other major issues facing CFO S. Today, we are delighted to bring you tonight's dinner session with our founding partner Workday and our sponsor Deloitte. I think tonight is another critical one for, for CFO S across every sector. That that theme is what will the CFO role look like in 2024? We'll, we'll explore the evolving role and scope of the Chief Financial Officer in this era of automation, including generative A I CFO S are continually reimagining the scope of their responsibilities and even taking on additional C suite roles. Over the next couple of hours. We will hear from experts and finance leaders about what the future holds. Lastly. A brief reminder before we begin that the opening interview tonight is on the record. But when we dig into our dinner conversation later, that part will be off the record. So let's get started. It's my pleasure to hand things over to Fortune's Alan Murray together with Andrew mcafee, principal research scientist at MIT, an inaugural visiting fellow at Google's Technology and Society and author of the new book, The Geek Way. Each of you will be taking home that book with you tonight. Thank you. Thank you, Andy. Have a seat. This is a very long table and I, I don't know if anyone told you before you accepted this invitation that these are, these are working dinners. We will have a one table conversation tonight. So, so those of you at the far end, prepare your vocal chords you're gonna need and I wanna watch Alan manage one conversation over dinner with this crowd at a table. This big, I wish that there will be a quiz. And if you speak out of turn, you have to down a full glass of wine. That's what we call a perverse incentive in economics. So see, they're already misbehaving. Yeah, we're in some trouble. So I'm I'm really happy that you kicked us off this evening. I've read the Second Machine Age, which is a great book. I read more from less, which is a great book. I haven't read the geek way. It's a great, it's a great book. Don't continue the fact that's where we are and we're gonna talk about the geek way because I know you're promoting a book. But before we get to it, why else do you think I'm here because you love us? That's also true. You love being with us and because this is a great crowd, I mean, really, how, how often do you have the opportunity to be with a crowd of CFO S from great companies like this? I wake up, I wake up every morning looking for that opportunity. Um So look, uh uh I wanna start before we talk about the book, talking about Generative A I because you're a technologist and I'm not, but from afar, I've never seen anything like this for business. Correct? Uh It, it, it, it not only, I mean, I had never heard the words a year ago. Yeah. And today every CEO I talked to is trying to figure out what to do with it, how to adopt it. We've never, we've had technologies that have come on pretty fast, but usually in the consumer space, we've never seen anything explode in the business sector. Uh What, what does that tell you? How should the people around this table be thinking about generative A I and how quickly to move? Uh I, this is gonna be a boring conversation because I agree with everything you just said. No, that's good. That's a great start. We'll find something to disagree about this. This is um weirdly powerful, but maybe even more important. It's weirdly fast. This stuff is going to diffuse throughout the economy. It's going to separate winners from losers and it's going to turbocharge the winners faster than you. And I have been expecting based on the past 25 years of technology which have been pretty fast. Right. And the there are a few reasons why it's so fast. Most important one is that it deals with us on our terms that we finally have this other entity on the planet that understands this, that understands language and can deal with us without us having to master some new to be trained. No, like we do this and it it understands and responds. The other thing is that it's useful in every corner of the economy. Let me give you three super quick examples to show how many different sectors it's valuable in and how flexible it is. There is a great story in the times just a while back about how doctors are now using generative A I not to diagnose maybe that's a bad idea because of hallucination. But to capture the, the notes that the conversation during a patient meeting and summarize, summarize and transcribe them into transcribe, summarize and then upload into the electronic medical record system. Uh that takes about two hours a day before generative A I for the average doctor, it's now down to 15 minutes. That's, that's literally hours back in the day for a physician. And one doctor quoted in the article had a great phrase. She said she's not doing this while she's trying to have. She said you can focus on the patient. It lets me be fully got the patient. That's, that's number one. Number two, there was just a really good study public where they gave generative A I to half of a bunch of consultants at BC G and not the other half. And all they did was sit back and wait to see what happened. And this, these are highly skilled, highly educated, highly trained people. The gap in creativity and quality of anything that you care about across 18 tasks was big and it was very, very quick to appear. And then the final one, this is the weirdest one to me. Uh My co-author Eric has a colleague out in Stanford, a professor who had a doctoral, an international doctoral student and he said, hey, write up what you've been doing for the past few months or whatever. And the person gave him a page full of notes and because English was not the first language, the professor like didn't understand what the person was trying to say. So he uploaded into chat GP T and said, summarize this and got a clean English paragraph getting across the point this guy was trying to make. So, so this, this is weirdly flexible and powerful. Never. And, and no technology has exploded that fast into the enterprise. But you're talking to a table full of CFO S here. Part of their responsibility is for risk in the enterprise. And I keep having conversations with people who say, hey, wait a minute, is my data safe? Uh uh Is what, what about IP? Am I going to create something here? And then 10 years down the road discover that I've inadvertently stolen someone's IP. And as a journalist, I gotta say, the hallucinations thing is not small. It's really pretty scary. I mean, II I had it right. I said, somebody asked me for my bio, I said, write a bio for Alan Murray. It had me writing a book that didn't exist. Uh It's, it's crazy. So, and I've heard companies say as a result of that a little bit different than what you just said, which is, hey, you know what given these risks, I'm not sure I want to be first. I think maybe being a fast follower would work. OK? In this case. So what do you say to those people? Uh That's a recipe for long term decline. Wow. But this is, this is not a good move so far. It's not a category of technology. We're sitting on the sign is a great strategy. Every risk that you just articulated is real of those. I think hallucination is by far the biggest one, there are use cases where you don't use this stuff yet. You can only imagine. I, I have a research collaboration with Google so I can talk with, you know, a little bit of knowledge about them. You can only imagine how hard the tech giants are working on. All the problems that you hallucination. Fixable. I mean, Mark Andriessen was quoted somewhere saying, oh a hallucination is just another word for creativity as a journalist, you know, or a lawyer or people who are in industries where precision matters, it depends on, it depends on who you talk to. Every smart person I talk to who, whose opinion I respect on this says this is a real problem. It's very, very deeply rooted in the technology. So the fact that we're going to tweak gen A I and have it not, you can't just say don't halluc don't lose anymore. But what you can do is backstop it and put guardrails on it and combine it with other kinds of systems. There's a phase that we're going through right now called Rag A Retrieval Augmented Generative A I where it knows when to go query a database and get something back from it. These are not trivial technological challenges at all, but think of the incentives for getting them right? I just stick with this one more minute and then we'll get to the geek way. But uh Rag, right means you, you query a database, you get some document for the database. And then pull it from that document. I've seen reports that even then you can end up with hallucinations. Can these technologies are, they're, they're super powerful and they're weird. We do not understand them yet. This is not a reason not to. So why shouldn't people around this table say uh I think I'll wait until you work that problem out because then you are behind on the learning about them. Then you're behind on the experience curve, you're behind on the learning curve. You're not missing it. You're missing out on the committee benefits that come from the risks are they're real, but they, they are manageable. And I've noticed that that too many companies when something new comes along, look for a reason to say no, I think that's a bad strategy which is actually a perfect uh pivot to the geek way. What explain to the folks here what the geek way is. The geek way is a way to run a company that has sprung up over the course of the 20th century, largely traded in Silicon Valley because a bunch of geeks started running companies and they found themselves in these super turbulent, uncertain, highly competitive weird environments. And I think a lot of them realized that the industrial era playbook wasn't helping them run companies for this environment. So they did what geeks do. They dove in deep on a problem, they experimented, they iterated and they came up with a set of practices that as I look across them are weirdly consistent and they're better. And when you look at the head to head battles between the upstart geeks and the incumbents of the industrial era. And how many of those battles has the incumbent won or even held steady? Well, I think we now have some stories where the incumbent is doing. Ok. Uh um You know, the way Marriott got back its control of the customer that we all 10 years ago, we all thought that would be gone to Expedia or whoever it would be. And now more than 50% of their bookings come through their app. So there's, there's one I'm sure. OK. Hold on. Like if you're, if you're, if your glorious success story is bookings via an app, come on. All right. So you say this, but think about this, right? When Netflix announced its intention to start producing its own content and streaming it out the head of what was then called Time Warner said it's a little bit, he was asked about the threat. He said it's a little bit like is the Albanian army going to take over the world? I don't think so. What does somebody give me a good example of an incumbent company that has beat back the disruptor West coast? And he has a bit of a love affair with these West Coast guys. I don't know why you live here in Boston. I really, this is not, this is not hometown cooking, right? This is the other side of the country. Give me some other good examples of, of legacy companies that have uh beat back the competition. Anybody want to throw one out? We'll get to it. The s the silence is really interesting. Right. Damo. Have you looked at the real market value of the, of the incumbent automakers versus, versus one market values? No fair. That's not, that's what else would you look at the continued existence? Is, is a really, really low bar. This is awesome. We get to argue, what's your, you know, what, what, what about the banks? What about the big banks? I mean, yeah, we thought we thought they would or do you need a license from regulated industries? So the two big industries that, that have not been geeked out I think are health care and finance because of regulation. It's not, it's probably not a coincidence that there's the dentist regulatory thickness there. So you, you say in the book, there are four principles of this geek way you want to elaborate on those, the easiest somebody here wants to be a geek yet. It's better, better than sticking with the industrial era playbook, right? The So my four principles that I talk about are science, make decisions based on evidence and argue a huge amount about it. Ownership, push down authority to devolve authority to an uncomfortable level. Uh speed, iterate, don't plan and ownership uh and openness be willing to admit when you're wrong and pivot and, and you know, do and don't, don't be so defensive. I thought data evidence was, that was the first one. That's the first one that's science. Yeah. So uh uh speed is probably the easiest one to conceptualize it's the difference between planning out a project in advance versus just trying stuff and seeing what works. Let me, let me use the space exploration industry. The best exemplar of this iterative approach to learning and doing things is clearly spacex these days, the all of the legacy companies in the space industry should be shame faced with embarrassment about their performance since SpaceX occurred 21 years ago. Now, hold on, let me, let me hold on. Here's what SpaceX has done. It's the company that has built commercially viable reusable rockets. We didn't think that was possible. They've got 100 new launches so far. They're the only organization on the planet. The only one that could drop thousands of rugged portable high bound satellite internet terminals into Ukraine. When did it? And they are the only company that is my interview or your interview. You asked a great question. Now, you got to listen to the answer and they're the only American company qualified to take human beings to the space station. NASA is not qualified. NASA is not qualified to take human beings. Interestingly, and I think you say this in the book, they kind of did it by moving fast and breaking things. I mean, not with people in them, with people in them. Exactly. But that's the important part. You can, you can take this kind of fast, loose and out of control approach to making things that are mission critical. You don't have, you don't have to fail. It's a rocket. We can't play. No. SpaceX blows up all kinds of rockets. They have killed many, many fewer astronauts than NASA. Yeah. Yeah. Other great. This is why I get excited about the geeks. We like, I, I feel so let down by the incumbents in industry after industry, you can't come up with one good example of somebody. I mean, because a a lot of the incumbents are still there that we thought that is what we thought would be low bar, that is a really low bar. So Jeff Bezos has this great quote when somebody, he talks about Amazon as a day one company and someone said, Jeff, what does day two look like? And he goes, oh day two is stasis followed by irrelevance, followed by a long slow decline and only then death. And by the way that sometimes happens in Silicon Valley. Yes, I mean, we've seen some of that. You've seen a ton of it, right? But my, my point is a different one. I'm not saying that today's top tech companies are gonna be permanently successful. I think that's not accurate. The people who displace them are not gonna be following the playbook that we developed and I taught at business schools during this time. They are not gonna be following the playbook that we built up during the 20th century. They are not OK. So before, before I let you go and we turn to the table conversation, talk about what all of that means for the CFO because that's what we're talking about tonight. How the CFO role is changing because of technology and the speed of change. Uh The short answer is, I don't know. The, the longer answer is uh if you are in the, um if you're, if you're in the business of finding reasons to say no, uh that's not, that is becoming a less good business to be in. And I don't think that's the business that most CFO S are in anymore. It might have been the business they were in 10 or 15 years ago, but we'll have that as part of our conversation and I'd be interesting to get everyone's perspective on that. So I think risk tolerance needs to shift again. You can blow up rockets and build safe crew capsules. I think the tolerance and the, and the definition of risk needs to change the risk of not being agile and not reforming your, not changing your practices based on today's environment is a deep, deep risk. You have totally succeeded in our goal, which was to say something provocative to get the table conversation. So, thank you very much. Well, thank you all have a seat.