40. How the economic climate is impacting CFOs – Ian Stewart, Chief Economist at Deloitte

40. How the economic climate is impacting CFOs – Ian Stewart, Chief Economist at Deloitte

Hannah Munro: 0:48 

So, hello, everybody, and welcome to this episode of CFO 4.0. With me today is Ian Stewart, chief economist at Deloitte and leader of the CFO's quarterly survey. So, welcome, Ian. It's fantastic to have you on the show. 

Ian Stewart: 1:03 

Oh, well, thank you for having me, Hannah. 

Hannah Munro: 1:06 

Well, I'm very excited because obviously you started, we're just chatting before the show, and you happened to mention that obviously you started, or you were involved in the starting and launch of the CFO survey. So, and that was quite a few years ago, whether you want to admit to it on the podcast, it's up to you. But tell us a bit about, you know, what started it and what you've learned over the last few years. 

Ian Stewart: 1:29 

Yeah, well, yeah. Yeah, it reminds me of just how old I am, actually, when you asked me about how long this thing's been going. So, just by way of background, I previously worked at a US investment bank. I was the chief economist for Merrill Lynch in Europe. And when I came to Deloitte, which was in 2006, just before the financial crisis, one of the things that I've felt about the way that we understood the economy was that we did not have a clear understanding of how chief financial officers, the people who actually controlled the finances of the largest companies in the UK, how their thinking was evolving. I've been working in economics for about 20 years prior to this, and the UK is full of surveys. There are lots and lots of surveys. But nobody had thought to ask CFOs about their preferences. And I thought this was a very big gap from an economist's point of view in understanding of the economy. But I also felt that it would be kind of valuable to CFOs themselves to have a sense of how their peers were thinking about the world. And I teamed up with somebody called Margaret Ewing, who was a very senior partner at Deloitte at the time on our exec. And Margaret was doing a lot of work with CFOs. And I came to her with the idea of setting up a survey. And we set up, I think, in early 2007. And, yeah, I don't know if the timing was fortuitous or not, but it was just before the financial crisis. So, if you're running a survey, you want to have a lot of amplitude in the results. You want the results to go up and down. And, my goodness, they went down in a very big way, you can imagine, in 2008. Yeah, so, I mean, that's really the background. I mean, what we've found is that it's, of great interest to CFOs themselves, to policymakers, people at the Bank of England and the Treasury, and to economists and people who are trying to understand what is going on in the corporate sector. 

Hannah Munro: 3:55 

And it's the quarterly survey, isn't it? So, it's run a couple of times a year. And you were just saying that you're currently collecting the results for the next one. So, when's the next one due out? 

Ian Stewart: 4:05 

Yeah, the next one is due out on the 12th of July. Yeah, quarterly survey, so, four a year. I mean, my goodness. So, that means that we are on something like we're heading to the 50th survey. And, you know, the thing about surveys is that the more data you've got, this is from an economist point of view, the more data you've got, the more value you get. And the value of a survey is also dependent, I mean, pretty much wholly dependent on the quality of your panel, your sample. So, what you want is a large and representative sample. And you want... a particular person to fill in the survey. I mean, it was interesting. Most surveys tend to be filled in by pretty much anyone who's around. We actually, this is filled in by CFOs themselves or actually their nominees. So, we set great store by this. And I think it, you know, it is, I mean, I think the Bank of England has taken a great deal of interest in this survey because I think through the financial crisis and through all the volatility we've seen over the last decade or so, in the course of the pandemic, the views of financial officers are absolutely crucial in determining the behaviour of companies. So, yeah, I'm really interested to see this next survey in early July. The last one about three months ago, utterly shot out the lights. I mean, we were expecting a strong survey. It was the strongest survey on record, reflecting all these vaccine rollout and a kind of improving backdrop. It'll be interesting to see whether in July we get yet a still higher reading because the economy's strengthened appreciably since we last did the survey. 

Hannah Munro: 6:06 

And just to put this into context for our listeners then, when you say a strong survey, as in there's a positive feel to those that are filling out the survey in terms of where they think the economy is going, or what do you, or the actual strength of the quality of the information that you're gathering? 

Ian Stewart: 6:20 

Okay, so, the quality of the information I would say is high because we will typically survey around about 100, 110 CFOs. Now, these are the CFOs of the largest UK-based companies. And so, actually, they're not just listed companies. There are private equity companies. There are very large subsidiaries of foreign companies. But actually, the listed companies typically account for around about 20% of the entire equity market. So, these are very, very big businesses. So, yeah, the quality of the sample is high. When I say a strong survey, what I mean is in terms of sentiment. So, how do you feel about the financial position of your business? Can to three months ago. But I also mean to ask a question on risk appetite. Is now a good time to take risk? And I think if you're a CFO or a CEO, arguably the biggest question you face is how do you feel about taking risk? We then ask about what your balance sheet are strategies. Are you doing things that are defensive? by cutting costs and building up cash, reducing debt, or you're doing things which are expansionary like doing M&A, CapEx, introducing new products. So, the idea is that we're looking at how the external environment, economic, financial conditions, how markets are growing, and how that is feeding into the decisions that CFOs are making about how they run the balance sheet and the finances of the business. 

Hannah Munro: 8:01 

So, from what you're saying there, obviously, there was quite a strong and positive sentiment coming out of the last survey. And obviously, there's been quite a few industries that have been affected. Think about hospitalities, etc. Are you still seeing that sentiment there? Or is there still a challenge in those particular industries? 

Ian Stewart: 8:20 

Well, actually, we do not break down our survey results by sector for reasons of confidentiality. But I think what you can see, if you look at the UK economy, you divide it into three categories. There are the sectors which had a very modest downturn and are now where output is low. back to or higher than where it was before the pandemic. And so, that is things like information, communications, technology, the financial sector, real estate, areas like water supply, electricity. So, those have been resilient. You've then got sectors which took a really big hit during the downturn and have recovered very strongly. And that's things like construction, manufacturing. And then, as you say, Hannah, there are the sectors like arts and entertainment, recreation, hospitality, leisure, which had a big fall and have not fully recovered. So, they've still got a lot of ground to make up. So, I think you're absolutely right that as economists, we tend to deal in high-level characterizations of the economy. So, actually, we are shortly going to upgrade our GDP forecast for the UK, which is big stuff. We think the UK economy is going to grow by over 7% this year, which would be one of the strongest readings in a very, very long time. But that is consistent with some sectors and clearly some companies doing relatively poorly, some absolutely shooting out the lights. And I think people talk about K-shaped recoveries by a recovery which combines distress in some sectors and very strong growth in others. And actually, most recoveries are K-shaped, and this one will be no different. 

Hannah Munro: 10:15 

And you were talking about sort of balance sheet strategies and what you're seeing in terms of how CFOs are looking to approach, certainly from the last survey, the next couple of months. What did you see from that perspective? What were the outcomes of the survey? 

Ian Stewart: 10:30 

Yeah, well, I mean, basically what we found over the last 12 years, and I don't think this is a massive revelation, but it's what you see is that when sentiment falls, as it did in the financial crisis and with the pandemic. And my goodness, it absolutely evaporated on both occasions. The way in which CFOs want to run their businesses' finances changed, and they focus on ways of protecting the business against uncertainty, volatility, and weak demand. And so, the focus is on if you can't grow your business your revenues and you don't want to expand because you don't anticipate demand, then how do you control costs? Are there levers you can pull to cut costs? Can you increase the amount of cash on your balance sheet, which is effectively a way of protecting yourself against uncertainty? So, you're building up a cushion of cash. And do you look at the financing of your business to try to reduce financing costs? Do you restructure your finances? And this is exactly what happened in the financial crisis. And we saw exactly the same thing in the pandemic, this shift to being really battening down hatches, reducing risk, protecting the business. And clearly last year, when the lockdown hit, this was an existential crisis for very many businesses. And, you know, this is, you know, I'm just an economist, but, you know, we've just lived through the biggest economic downturn in recorded history, which goes back 300 years. So, you know, CFOs were absolutely on the sharp end of that. And as the economy has started to recover with the vaccine rollout, though the sentiment has improved, and the way in which companies and CFOs want to run their balance sheets has shifted, and it shifted dramatically. towards growth and expanding capacity and building the business. Before we spoke, I was just looking at some of the data but suddenly cost control has dropped right down the list of priorities. Investment has gone up the list of priorities. M&A has risen up the list of priorities. And growing the business has risen up the list of priorities. So, I guess the picture that we have, which I think will be even stronger possibly when we produce our next survey is of a corporate sector which is gearing up for very strong growth and you know for me what makes this survey fascinating is that I am constantly sort of comparing what we're seeing in the macro economy with financial markets with what CFOs are doing and what CFOs are doing is very consistent with what we're thinking about growth. So, as I say, we think in the UK in the second and third quarters of this year, the UK economy may grow by, well, as much as it would normally grow in about four years. So, you get four years growth packed into six months. And one of the things about that is CFOs are getting worried about inflation. Because you can imagine all of this demand, lots of pent-up demand from consumers is hitting the economy and supply is reduced and prices are starting to rise. So, that's one of the things I'm going to be really focused on in the next survey is how do CFOs see the outlook for inflation? 

Hannah Munro: 14:20 

Because there's certain sectors, isn't there, that's already really experienced that construction, I think, is one of them in terms of building materials and that supply piece as well. So, I think that's starting to show itself in the current environment as well, isn't it? 

Ian Stewart: 14:36 

It most definitely is, yeah. I mean, I think what we've got is two things going on. One is just supplying bottlenecks. So, you know, frankly, six months ago, it looked like, you know, things were very, very bleak and nobody was investing. You know, some businesses were closing down. And all of a sudden demand has gone from, you know, the floor to up here. And there just isn't the production. So, if you look at... semiconductors, which are the kind of building blocks of so, many modern consumer products, including cars. There's a chronic global shortage of semiconductors. And that means that a lot of car auto manufacturers are having to idle factories because they can't produce cars because they haven't got the semiconductors. And you're absolutely right. Construction has been absolutely on the sharp end of this. That is... in large part because commodity prices have risen very sharply. So, in the States, the timber price has risen about fourfold. If you look at copper prices, if you look at the price of freight, these things have absolutely exploded. So, that's feeding through into areas like construction. It's having a big effect in manufacturing. But we're seeing it sort of spilling over into other sectors. I'm talking to somebody who runs a big restaurant chain in London who is telling me that their food prices have risen somehow 30% since the start of the year. And the question then becomes, well, you're running a business and you're facing higher input costs. Do you raise your prices, or do you try to, you know, do you take a margin squeeze, or do you try to cut costs in your business? So, this is a really... important question if you're running the Bank of England, because their job is to control inflation and keep it at 2%. And if CFOs collectively are responding to these higher costs by raising prices, then that will have an effect on inflation and the Bank of England's ability to control inflation. And actually, we've worked very closely over the years with the bank on the survey they helped They gave us a lot of advice on setting it up. I mean, it's our survey, so, they're not in any way responsible for it. But we do include some questions in the survey, which the Bank of England have asked us to ask. And one of the things they ask us to ask every quarter is what the CFOs think the outlook for inflation is, because they want to know what chief financial officers think. think is going to happen to inflation. My guess is that CFOs will think inflation is going up quite a bit over the next year or so, 

Hannah Munro: 17:28 

Absolutely. And so, in this particular survey that's coming up that you're doing at the moment, what other areas are you focusing on in terms of questions? And what are you looking for answers to in the next one? 

Ian Stewart: 17:42 

Yeah, well, it's a really good question. I mean, I'd say, well, a number of things. One is we seeing a fading of Brexit effects? Now, were it not for the pandemic, we would have spent the last six months talking about nothing but Brexit. But as it is, we've had bigger fish to fry. But what we've seen with our survey since the referendum in 2016 is that CFOs have been very concerned about Brexit. It's been their number one worry. So, we asked them what they're most worried about. Brexit's been absolutely the top of that list. until April of last year when it was supplanted by the pandemic. And what we saw in our survey earlier this year is that with the UK having actually left the EU, Brexit has dropped right down the worry list. So, they're worrying more about other things like inflation, you know, like the risk of another wave of the pandemic and so, on. And the other thing is that we've seen that CFOs a year ago were telling us that they were holding back on investment and hiring because of Brexit. And in the latest survey, that kind of dampening effect from Brexit reduced a lot. So, it'll be interesting to see whether that continues. That's an area that's Another area for us is whether, as the pandemic eases, we've got the Delta variant, which we all know is increasing very rapidly. The planned easing of lockdown on the 21st of June has been postponed by at least a month. We are interested, eager to see whether CFOs, whether this has made CFOs a little bit more cautious about investment, a little bit more cautious about the return to work. So, we want to understand that. We're also asking a new question. So, very rarely do we introduce new questions because there are only so, many questions you could possibly dare ask people who are as busy as this. But we have introduced a new one, which relates to climate. because we feel that climate has become something which has long since escaped ESG. That label has become a sort of board-level concern and something which is having, in many businesses, having quite a big effect on the way in which finances in the business are being run. So, we're asking about climate. But yeah, I mean, I have to say as an economist, we get quite excited. I probably shouldn't admit this, should I? We get quite excited seeing these numbers because for us, this is like being able to look inside the workings of the economy and see the people who are responsible for an awful lot of hiring and the investment, an awful lot of the growth that this economy produces, to understand what they are thinking. 

Hannah Munro: 20:54 

Yeah, absolutely. It must be like looking inside Schrodinger's box and actually understanding where these decisions are. 

Ian Stewart: 21:01 

coming from. Genuinely, it really is quite thrilling. I mean, you know, I don't talk to my friends about this too much, actually. They probably think it's slightly odd. But it is, if you're an economist and you want to understand how the economy works, the person who asks, in many respects, are CFOs. So,, yeah, this, I mean, we say it every quarter, but this will be an especially, I think, important survey because we want to judge whether this, what looks like a very, very strong recovery, whether it's going to get, you know, whether it's going to gain momentum. You know, my guess is it is, but we're looking for confirmation from this survey. 

Hannah Munro: 21:48 

Awesome. So, when you're, you know, you're sort of, in terms of, we look back at sort of last quarter's survey, and you were talking about sort of the challenges. So, we mentioned, obviously, inflation becoming, potentially becoming more. What other sort of challenges are CFOs currently facing or say they're facing? What's in sort of the top five or six pieces that, you know, that it's on their minds at the moment? 

Ian Stewart: 22:14 

Well, I mean, the dominant concern, of course, is around the pandemic and the managing the transition away from the pandemic there is continued concern about geopolitics and the kind of I think for several years there's been a lot of concern about the kind of global environment and a world which seems less predictable and less stable partly because of politics. And in some respects, I think one might argue that Brexit and Donald Trump's election were symptomatic of that rather less predictable world that we've had to get used to. So, that's been, you know, that sounds like an incredibly high-level thing. But if you're running a business, it can have all sorts of effects on, you know, your own business. I think there is a kind of long-term concern about productivity. So, how do you raise productivity or the efficiency of business? So, how can we make businesses and economies grow faster than they have in the past? And there's also, I mean, we talked about inflation, but I think there is, you know, what we've seen in the last 12 years is governments printing an awful lot of money through quantitative easing. We've seen very low interest rates. And that means that asset prices, so, the price of houses, of equities, of commodities, of government bonds, have risen a lot. And there's concern about a kind of bubble, that we may end up with a bubble in some of these markets. You know, when bubbles burst, there is a lot of, well, we saw this, obviously, in the financial crisis, we also saw it in the dot-com period. So, I think the, you know, CFOs, I think, I mean, even in the short time, relatively short time I've been at Toyota, I think the role of CFO in the UK has changed. And it's become, the CFO tends to be the person on boards and in the leadership. who do an awful lot of thinking about the way in which the external events affect their business. So, we saw when Brexit unexpectedly got the referendum results, within companies, it tended to be the CFO who had to take the lead and build teams to look at it. And similarly, during the financial crisis, CFOs were absolutely, because they were guardians, they are the guardians of companies' balance sheets in a liquidity crisis, credit crunch. They're on the front line. And it's been the same with the pandemic. So, you know, what we find in our conversations with CFOs is that often we're talking about, you know, things way beyond the immediate business because they are really interested in understanding Is there going to be a UK-US trade deal? Because it matters to their business. They're interested in understanding how governments will deal with the problem of huge levels of debt, because if it involves higher taxation, they're the person who are going to have to deal with it. So, there's an interesting kind of connection, I think, between what we as economists do and the role that CFOs increasingly have assumed within organizations. 

Hannah Munro: 26:14 

There's an interesting piece there, isn't there, about because obviously the CFO role seems to be growing in, you know, in terms of what they're covering. You know, very often they're taking responsibility, obviously, for risk management, for obviously finance, you expect that. But that sounds more if they're taking such a bigger role, they're not just obviously the market strategy and the internal productivity and development piece, but also the wider, you know, the wider landscape outside of their existing markets and how that could impact. And has that always sat within the CFO? role in your experience or is it becoming more centralised within that. 

Ian Stewart: 26:47 

role? I think it's becoming I think it's become more prominent and I think that the traditional role of the CFO is obviously focused on steward of the company's finances I think they now the role increasingly encompasses things as you say like risk management a kind of understanding of the external environment, macroeconomic, political, financial, and actually often representing the business to the outside world. So, in a lot of the discussions we have with boards, it's interesting that the CFO is the person who has often got the most challenging, the most questions for us as economists. And I think a lot of boards, when something big comes along, like the Euro crisis, there's a kind of an assumption that, yeah, we turn to the CFO, they'll tell us what it means for us. And so, I think you know, the idea of a CFO focusing just on the finances, I think that's now quite a... I mean, yeah, I mean, they are focused on the finances, but actually it's the effect of all sorts of external events and, of course, most importantly, the operation of the business on the finances. So, I think it has a lot in common with strategy and... you know, areas like risk management, macroeconomics. So, it's a very broad role in some respect. I mean, I hesitate to say this, but in some respects, I think you often see it is the CFO who ends up as becoming the chief executive. We know an awful lot of CFOs who make that transition. So, in a lot of organizations, I think they tend to be sort of de facto the number two in the business. 

Hannah Munro: 29:01 

It's interesting you say that because there is a growing trend of CFOs shifting into that CEO role from latest data I've seen. And certainly, it's interesting. There's some comments around it saying that it's actually due to the current crisis. And obviously, during crises, that person is seen as a safe pair of hands. But I think it's really interesting your comment about whether there's a wider piece about the level of responsibility they're currently being given and whether that's having an impact, or whether they're seen as more suitable for that CEO role as well. 

Ian Stewart: 29:31 

Yeah, I think so, And I think if you– I mean, clearly the CFO and CEO are highly complementary and tend to work closely together. But I think in many respects, CFOs are doing things which in the past would probably have been more the focus of the CEO on their own or in concert with other people, perhaps not on the board. So, I think it's probably become a– I think it has become a broader and probably more challenging mandate and therefore a kind of pathway to the top of businesses. 

Hannah Munro: 30:17 

Absolutely. And I guess with that, you were talking about how you're, you know, it's the CFO you're normally that's asking more questions about the wider outlook. Is that, do you think as a proportion of what they're looking at, if you sort of chunk it down into what are the considerations they're making, do you think that's taking up a larger amount of the time or is it just that you're seeing more questions coming through? I... 

Ian Stewart: 30:43 

I'll tell you what, I think CFOs have got the same problem that economists have got, which is that we, prior to the financial crisis, go back 12 years, prior to the financial crisis, we were living in a world which appeared to be, well, it was, in many respects, more stable and predictable than for very many decades. And we were in a world of strong growth, low interest rates, independent central banks, where a kind of model of how we run countries and economies appeared to be gaining ground. The Soviet Union collapsed. China entered the global trading system and joined the World Trade Organization. It looked as though Western liberal model was triumphant and that was generating an incredibly benign, predictable world. You know, that meant that, I mean, I'll tell you, as an economist at Merrill Lynch, I would sometimes come across clients at that time who would say, I don't want to talk about economics because it's so, predictable that we just don't need to have this conversation. That wasn't good for me. But there's not much volatility. That changed. Volatility came back in a really big way. And I don't think anyone would say the post-financial crisis world has been predictable or easy to navigate. And that's not just a problem for economists; it's a problem for lots of people. But I think within organisations, CFOs have had to process that volatility and deal with a set of challenges. You know, Britain leaving the European Union. I mean, America electing Donald Trump, a pandemic, a deep financial crisis, a euro crisis, which at one stage seemed likely to take some members of the euro area out of the single currency. I mean, these were seen as sort of textbook issues. They're things that we weren't going to have to deal with. And I think it's been CFOs who've been on the front line of this. And I think that volatility and unpredictability has fed into the challenges facing businesses. And I think often it's been CFOs who have had to deal with it. 

Hannah Munro: 33:48 

And it's interesting you are talking about, so, in quick succession, we've had some really challenging events with, you know, not just in the UK economy, but in the world economy. Do you think it's made CFOs, and I guess businesses in general more aware of the things that you never thought could happen can? And do you think it's changed where they focus their efforts generally and, you know, how they manage risk as well? 

Ian Stewart: 34:12 

I think it has, yes. I think that... So, the world, the old world, the pre-pandemic, sorry, the pre-financial crisis world, it was characterized as the great moderation. So, this is a term that was used by economists, and it meant a sort of stable world, which was relatively easy to navigate. And in that kind of world, I think if you were running a business, you could spend most of your time thinking about your business. And in the last 12 years, you've had to have a handle on all sorts of, the implication for your business of increasing protectionism globally, of huge moves in commodity prices, of things like deflation. And so, I think it has, boards are talking more about these issues. I can't tell you the number of times I go talk to boards about exactly these issues. And I think that would not have been happening 15, 20 years ago because that was just less relevant. And I think that you can see in the behaviour of companies that across the West today, businesses are running much higher levels of cash. And I mean, that's partly because of the tech sector, but not wholly technically. to do with the tech sector. But I think one of the reasons that companies have tended to run higher levels of cash is just because they're dealing with a more uncertain world. And cash is a kind of buffer against that uncertainty. So, you know, I think also, and there's a lot of evidence from this, all this from the Great Depression, that, you know, leaders, business leaders who experience big shocks, it changes the way they think about running their business. It means that they have an awareness that things that people have not been through such shocks, they don't believe they are possible. And no CFO now is going to start the year when they're looking at the risk register without having the risk of a pandemic featuring within that. It's gone from being a distant possibility to something which is very real. So, I think it has really profound implications for risk management, for how businesses are run, and for how you think about how you build a safe business, a resilient business, to deal with what, in macroeconomic terms, is a more volatile world. 

Hannah Munro: 37:03 

It would be really interesting to be able to pull out those risk registers from maybe two years ago to understand how many actually had pandemics on the list. And I bet you those that didn't, I've definitely added them in. 

Ian Stewart: 37:19 

Well, yeah, you know what, Hannah, I mean, look, I put my hand up. I mean, at the beginning of every year, we look at, we think about risks, and we were not saying in January of 2020, oh, you know, pandemic. We all knew that a pandemic, there was a risk of a pandemic in the same way that there was, you know, there'd be a risk of, you know, terrible natural disasters. But they were seen as being relatively, you know, they're very high impact, low probability events. And, you know, I mean, I tell the My team, I say to them, much younger than me, I say, I have to say, this has been a very unpredictable macro, in economic terms, a difficult environment. But actually, for learning about how economies operate and for understanding the world, this has been an astonishing experience. And I think it will... I think it will have a lasting effect on how we think about risk. And I don't necessarily think, I don't think it should mean that companies and individuals are permanently risk averse, but it just means that I think we have to have a more kind of complete understanding of risk. And I think it also demonstrates the value of contingency planning and being able to react and move quickly. 

Hannah Munro: 38:59 

so, for those CFOs listening because we talked a lot about how that CFO role has changed and perhaps from an education perspective that's not necessary so, obviously people are learning on the job but you know we're all learning how to deal with the pandemic let's be perfectly honest so, when you're speaking to CFOs how do are they talking about how they're developing and what they're watching, what sources they're using to work through some of these kinds of questions? And have you noticed a shift or a change in what people are doing or how they're almost keeping an eye on things as we go through, not just this pandemic, but over the last sort of year and this risk and volatility? 

Ian Stewart: 39:40 

Yeah. Well, you know, I mean, I'm a huge consumer of data and information. It's my job. And I would observe that the arrival or the end of the Great Moderation, this kind of era of unpredictability, has coincided with a revolution in terms of the dissemination of information through the Internet and the availability of information. So, if you want to follow any subject, it is... I mean, I'm not kidding you. Compared to when I started at Merrill Leach, it is 100 times easier. Data are available immediately. And actually, data sets are available. There are a plethora of sources which are available for free. You can get on Twitter, and you can find out what some of the leading economists are saying about the latest inflation numbers at one minute past seven on Wednesday, as I was. So, I think there's a kind of abundance of information and data. I think the problem is filtering it. I mean, CFOs don't have, you know, they're not economists. This is something they've got to be across without spending their time doing it. And finding sources and people who are worth following. I mean, there are obvious things like the Financial Times or The Economist. There are also some incredible blogs and data sources. I mean, one which I will mention, because I think it is a noble venture, is something called Our World in Data, which is run from Oxford University. And it is the most astonishing collection of data on pretty much any subject you can think of. But there's a huge amount of data there on the pandemic and we have followed it avidly. You know, central bank, Websites have got amazing data on them. I mean, I would modestly say that I write a weekly note, which goes to about 30,000 clients. Just a very short email, maybe... 800 words called the Monday Briefing. And what we're trying to do is thinking about people whose job it is not to think about economics, who actually do real jobs like running businesses. What is it they need to know? And can we cut through all the noise to say something about, I mean, this week we're writing about the future of capital spending and technology, and could the pandemic be a trigger for a revival in productivity? And so, you know, we do that. It goes out every Monday. But there are a lot of people doing this. So, I think the thing is you've got to find the right things to follow for you. And I would recognize also that this is a very small part of, but an important part of what CFOs need to be able to do. 

Hannah Munro: 42:55 

It's interesting, isn't it? Like how, how on top, we talk about obviously the role shifting and growing, but actually that concept of how you keep on top of everything that's changing when things are changing at such a rapid rate. And that's something, you know, when I'm speaking to people that talk about how decision-making timeframes are shifting and how quickly they need to access information. And there's an interesting conundrum at the moment is how much time can you actually dedicate to, like you say, sifting through the data and sifting through the latest information at this time. 

Ian Stewart: 43:28 

I think the other thing, Hannah, is and actually just on that, we haven't talked about this as sort of future officers, the other thing that I find incredibly useful is talking to my colleagues who are not economists, I've got a team who are economists, but my colleagues who are not economists, finding out what is happening in the healthcare and pharmaceutical sector or in consumer business or in the public sector. So, A lot of the ideas that we have come from conversations we have, and they're kind of serendipity. Somebody will mention something. And obviously, CFOs are plugged into an incredibly wide network. So, I think a lot of their intelligence will be directly derived rather than through secondary sources. But I mean, that's more of a challenge in a world of remote working. 

Hannah Munro: 44:25 

Yes. And it would be interesting to understand once we come out of this, where that CFO, how CFOs see their role changing in terms of remote working as well. And whether, like you say, you know, those, those water cooler conversations with the head of commercial or head of product, et cetera, whether, whether they actually, they miss, they've missed that over the duration of the pandemic and what impact that could have in terms of, you know, remote working for senior execs as well. 

Ian Stewart: 44:55 

I, think so, and actually, there's also another huge question, which is just what does remote working mean for the success of the business and for the efficiency of the business? And I think the CFO will end up, you know, being, you know, I mean, it's relatively straightforward to say how much money could be saved by closing an office. But the long-term effect on of remote working in organizations which have not done it at scale I think is a really interesting question and it clearly we are in you know this is new territory I mean there's no there's no clear model but in I think the pandemic has left us with lots of conundrums and questions and this question of how to make work for organisations and individuals is one of the really big ones. 

Hannah Munro: 45:52 

Yeah. And I think one of the, I guess from a data perspective, the challenge is also how do you measure it? Because there's so, many different models, even within the concept of remote working, you know, part, you know, flexi working versus obviously full remotes based on locations, you know, whether they've got multi country offices, et cetera. So, that's, for me, that's where I feel it gets really complex is that it's not just about, you know, are you working remotely and does that have an impact on the success of the business? It's also about the type of remote working And I guess depending on function as well, it opens up so, many questions. 

Ian Stewart: 46:26 

Yes. Yeah, absolutely. And how crucial I think for most organizations, the face-to-face interaction, relationships, developing talent, the generating of ideas is. And, you know, as an economist, you know, theoretically, I could do my job sitting in Shanghai or, you know, but actually the networks I have in London are really, really important. And, you know, I'm very interested in this whole area of how you get some sort of blended type of working, which actually does work. Because to me, the question is, if something could be done in Tunbridge Wells rather than an office in London, then why couldn't it be done on the other side of the world? So, I think it's really, this is a question economists have wrestled with for a long time, understanding about the nature of work and all the different aspects of a job and where they can be done. 

Hannah Munro: 47:35 

Absolutely. Well, I'll certainly be following what you guys are doing around that because it does, it sounds fascinating. Also, I guess what would be amazing to understand is the impact that that then has on the economies and the future of cities. And again, you know, it just goes out from there, doesn't it really? So, but I want to say massive thank you, Ian, for coming, you know, for coming on the show. So, our listeners, if they're anything like me, will be wanting to know how we can find out more about the work that you and your team are doing and obviously about the regular blog that you mentioned. So, what's the best way to sort of learn more about the work that you guys are doing and what should they be following? 

Ian Stewart: 48:12 

Oh, well, I mean, it's very easy. Just Google Deloitte Monday Briefing. And if you're interested, you're very welcome to sign up for the subscription page. It's a short email and you can see some of these, you know, our recent ones. So, people are very, very welcome to sign up there. 

Hannah Munro: 48:35 

Brilliant. So, for those that are listening, I will, of course, pop that link in the show notes. So, if you're lucky to join, you can find it nice and easy. So, thank you so, much, Ian. It's been an absolute pleasure having you on the show and very much looking forward to the next edition of the survey and seeing if your predictions are true for what you think is coming up. 

Ian Stewart: 48:59 

Well, thank you very much for having me, Hannah. It's lovely to find somebody who's interested in the CFO survey and perhaps come back at some stage so, yeah thanks for having me. 

Hannah Munro: 49:09 

oh, it's been an absolute pleasure, and we'd love to have you back on once you get the results in and yeah, we can we'll chat through what you found but yeah thank you so, much.