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Strategy Adra by Trintech

What the Instant Gratification Economy Means For the Office of Finance

Sponsored by Adra by Trintech

As millennials begin to become a major factor in today’s marketplace, it is imperative that financial leaders change their paradigms and implement an adaptive strategy. This strategy will help you to retain skilled workers and improve work-life balance.

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Patience has long been considered a virtue, but today it seems more like an afterthought. We demand immediate responses to our instant messages. Our phones have Apps that simplify our lives and heighten our sense of immediate gratification. We record TV shows so we can skip commercials when we watch them later. Brick and mortar retailers are struggling to remain relevant in this new economy. 

As humans, we are hard-wired to want immediate payoffs. Continuous advancements in technology have made instant gratification more intense. Some of the first businesses to respond to the need for immediacy were startups such as Uber, GrubHub and InstaCart. These companies are now each worth billions of dollars. The impact of this economy is not limited to just B2C companies, it’s reach has extended to B2B companies with less than favorable results. This “gratification” manifests itself  in the obsession with short-term profits at the expense of creating long-term value. Investments in research and development, technology, equipment and worker training often get sacrificed to meet today’s financial goals. Over the longer term, these sacrifices can have disastrous impacts to the bottom line. How a company balances the needs of immediate gratification vs long term strategy can be a strong indicator of sustainable results.  As a financial leader, have you considered how this paradigm shift is impacting your team? 

The Power of Delayed Gratification

In an interview published in Inc. Magazine, Craig Smith, who at the time was president of HomeAdvisor, a digital marketplace for home services, talked about the importance of having a long-term vision. He said it took 17 years for the company to grow to $500 million, large enough to acquire their main competitor, Angie’s List. The keys were bringing on board quality contractors and having a long-term view of marketing. “If you build a core base of loyal fans who really love your business and your product, you won’t have to grind to get through every quarter,” Smith said. In his very first letter to shareholders in 1997, Jeff Bezos laid out his approach to business and running Amazon. He summed up his philosophy in a six-word headline: “It’s All About the Long Term.” At the time, Amazon had just 256 employees and annual revenues of less than $16 million.

What This Means For You

With baby boomers retiring from work in bigger and bigger numbers, the millennial generation — born in the 1980s and 1990s — are now the biggest cohort in the workforce. Given their experience and familiarity with technology, millennials expect (dare I say demand) a wired and connected world. Eighty percent of them sleep with their phones next to their beds, according to the Pew Research  Center. Millennials are used to instant communications, so more traditional workplace tools like email seem archaic and slow. Pew also found that they work best with frequent and immediate feedback, prefer to work in teams and value transparency. Millennials are not interested in working 60 hours per week. Their paradigms are much different than their baby boomer’s predecessors. A “connected” world for them means the ability to stay in touch with friends virtually and in social settings. There are a host of social media tools and apps that enable them to stay connected throughout the day, but having the time to get together with friends after work is just as important. Like no other generation, millennials talk, share, and support. The point here is even if your finance team is investing in the most up-to-date systems and tools to streamline workflows and processes, it may not be enough. The paradigm has shifted working 60+ hours per week is no longer an acceptable norm, for this generation. 

Adapt To Survive

The office of finance needs new and innovative thinking, together with a willingness to explore new technologies and ways of working. Cloud-based software tools and collaboration applications are available to provide far better insight and improve performance. New technology requires a shift in culture and attitude, but the long-term payoff is there. “Long-term thinking levers our existing abilities and lets us do new things we couldn’t otherwise contemplate. It supports the failure and iteration required for invention, and it frees us to pioneer in unexplored spaces.” Moreover, there are 3 important results of this adaptation strategy:

  1. Higher retention of skilled employees
  2. Improved alignment with company goals
  3. Improved BI and analytics capabilities

To learn more about how the office of finance is evolving, register for the Finance 2.0, The New Norm for CFOs webinar.