In this edition:
- Change Leadership Skills: Having an inclusive annual planning process helps your company be more competitive. Plus: exclusive Annual Planning guide for paying members.
- Macroeconomics: The Fed raised rates another quarter point, as Eurozone economic indicators turn negative. The IMF releases its global outlook.
- Emerging Tech: AI-driven coding tools are taking off. Llama 2 gets snared by a open source controversy and we take Code Interpreter for a test drive (exclusive deep dive for paid members).
- Nature Notes: The American Ornithological Union just released the 2023 official North American Bird Species List - what's changed.
🧭 Smarter, more inclusive annual planning
The annual budget season (which many companies are entering) is an important time to demonstrate inclusivity and find the very best ideas that will take the company forward in the next fiscal year. This may mean changing some of the age-old habits and methods for budget season.
Annual budgeting processes have traditionally favored insiders. This traditional way of doing things can actually harm company culture and lessen competitive advantages.
That’s why it’s so important to understand the relevance of including the inputs of individuals and teams you might not have traditionally consulted when gathering budget requests.
In this section, I’m going to introduce the S3T Guide for Smarter More Inclusive Annual Planning, a framework, step-by-step process, and a calendar to help your team have the best annual planning season yet.
2 Key thought pattern changes you'll learn in the Guide
Inclusive annual planning is vital to the company’s culture:
- Annual budgeting processes have traditionally favored insiders - those with connections - which can make it a serious demoralizing factor in the company culture, but it doesn't have to be this way.
- Months of careful work to create a positive inclusive culture can be undone in a few weeks of careless budget planning.
- Leaders who demonstrate a pattern of saying the right sound bites, while following the money, breed a culture of cynicism and hypocrisy.
Inclusive annual planning is equally important for the company’s competitive advantage:
- Companies that practice an insular budget process are at risk of a dangerous form of groupthink, rolling the same old projects and themes into the next year, even as the obvious signals from the rest of the world scream for change.
- Critical insights about what a company should do next are scattered randomly through the company’s population. They won’t consistently come from one group or one part of the enterprise. Taking an inclusive approach increases your chances of finding those high-value insights when there is still a window of opportunity to act on them.
Macro: Developed economies shrink as emerging ones grow
🏛 The Federal Reserve raised interest rates another quarter point to 5.5%, its highest level in 20 years. The US economic picture continues to be mixed, with signs of resilience and strong GDP growth amid a gloomier global outlook (see below). Here is a helpful explainer from David Gura and Scott Horsley (NPR).
Also worth a read...the comments in this X - previously known as Twitter - thread:
🌏 Global Outlook
This week the International Monetary Fund released its latest quarterly World Economic Outlook - a survey of global economic developments by IMF staff economists. Key points:
- Global growth is projected to slow from 3.5% to 3.0% over 2023-2024
- Global inflation projections have been revised upward for 2024, with inflation expected to moderate at a slow pace.
- The report overview notes "widening divergences among economic sectors and regions", with only Southeast Asia and Africa experiencing growth thru 2024.
Europe’s economic indicators worsened in July with factor and service economy metrics falling more than expected. The indicators increased worries of a Euro-zone recession.
FedNow went live on July 20, enabling instant payments for the initial set of early adopter institutions (PDF), but bringing some potentially serious downsides for banks and insurers. 📉 What CFOs need to know about how FedNow will impact float and cash management.
👾 Emerging Tech: AI driven coding tools
Meta Llama 2 Controversy
Meta has just released Llama 2 hoping to differentiate it as an Open option (vs others AI-driven coding tools), but the Open Source Initiative has voiced concern that Llama 2 is not a true open source initiative because it does actually restrict how some outputs can be used.
If you are planning to experiment with Llama 2 here are a couple of positive actions you can take:
- See if your legal team has recommendations on how to evaluate the future use of something your team might create with Llama so you don’t run afoul of Meta’s limitations.
- Participate in this deeper dive collaboration to create a more clear definition of what Open Source means in the context of AI.
Test Drive: Code Interpreter for ML and Data Analysis
ChatGPT recently added Code Interpreter, a feature that allows you to upload datasets and then use Python scripts and libraries to analyze the data, create visualizations, and train models.
I tested Code Interpreter and share what I observed further below.
First, if you'd like to try it yourself, here are a few tips:
- Ask ChatGPT how to use Code Interpreter. Ask questions like "what can I do with Code Interpreter?" or "How do I invoke Code Interpreter?" The instructions were surprisingly helpful.
- Go to Kaggle to find a dataset (here's the one I used for the example below). You'll need to download the file to your computer and then upload it to Code Interpreter.
- To upload a dataset, press the Plus icon next to the "Send a message" prompt:
Here are notes and screenshots from my own test drive.