The CFO 411: Sparking Creativity in Unlikely Places

Light bulb illuminated in row of dim ones

Why do some teams react to negative news with malaise while others are energized to get their creativity pumping? New research shows it may come down to how managers present the problem. In the business world, company execs are eyeing Cuba with creativity aplenty. Corporate leaders joined President Barack Obama on a historic visit this week to the once-off-limits island. And investors are now clamoring for more access to information that can fuel a business—but not be found on its books—like customer data and proprietary algorithms.

4 need-to-know headlines 

1. Research shows how to be a better bad-news bear

Only share good things with your finance team—or deliver the bad news and get branded a dream-crusher. If those feel like your only options, hear this: A new study shows that when leaders describe negative events and then immediately mention a potential solution or two, team members don’t fall down the usual negativity spiral that can leave them feeling powerless. In fact, the study showed that pairing the problem with a conversation about potential solutions actually increased the team’s problem solving and creativity. (via HBR.org)

 

2. Obama—and a crowd of business leaders—travel to Cuba

Obama was in Cuba for a three-day visit, and perhaps no one was paying attention more closely than companies eager to leverage the long-embargoed island for business opportunities. In fact, execs from Airbnb, PayPal, Priceline, Xerox, and Google parent Alphabet all joined the president on his historic visit. Yet major barriers remain to a startup surge in Cuba—most notably a lack of widespread wifi. (via Bloomberg.com)

 

3. Behold the era of hyper-profitability

From dog food to batteries, telecoms to credit cards, industries in the U.S. are becoming increasingly concentrated in just a handful of firms, according to a new analysis by the Economist. Thanks in part to $10 trillion in mergers over the past decade, two-thirds of the American economy’s 900-odd industries are more concentrated compared to data pulled from 1997. That means higher profits for the handful of firms who dominate these fields, but it can also mean higher barriers for companies just starting out. Unicorn startups, it seems, have beaten the odds in more ways than one: The rate of small-company creation is now at its lowest levels since the 1970s. (via the Economist.com)

 

4. China’s currency data grabs headlines

Earlier this week, U.S. news sources pointing to confidential sources reported that the IMF is urging China to disclose further currency data in order to help shed more light on the yuan’s exchange rate. Chinese-based reporters quickly refuted that claim, though analysts around the world seem to agree that a global economic recovery will be closely impacted by the surge or stagnation of China, the world’s second-largest economy. For now, at least, all eyes remain on the yuan. (via Bloomberg.com and EconomicTimes.com)

The stat: $8 trillion

That’s the total amount of intangible assets, like brand value, customer data, and proprietary algorithms, that may be adding value to U.S. companies, according to an economist at the Federal Reserve Bank of Philadelphia. Yet current accounting rules don’t require businesses to list these intangible assets on their books, a situation that’s increasingly frustrating curious investors. (via WSJ.com, login required)

Sound bite of the week

“At no time did I engage in any improper conduct that relates to any restatement of revenue.”
Howard Schiller, former CFO of Valeant Pharmaceuticals International Inc., in a statement released through his lawyers

The firm alleges that misstatements around its earnings can be traced back to the CFO’s “improper conduct.” But, Schiller is fighting back. Though he abruptly resigned as CFO last year, he’s refused to step down from Valeant’s board. (via FT.com, login required)

 

4 Top Stories + 1 Key Statistic + 1 Industry Quote = The CFO 411
The CFO 411 is our weekly news roundup that brings you top headlines, data points, and sound bites to keep you in the know. Follow our updates on LinkedIn for more finance must-reads.

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