Axel Smits

The through-line

Everything Smits says circles back to a single diagnosis: five megatrends that have been visible for decades, climate, technological disruption, demographics, geopolitical fragmentation and social unrest, have stopped arriving one at a time and now converge and interact at once, forcing finance leaders to work them in parallel rather than in sequence [1]. "We zitten eigenlijk op een kruispunt waarbij dat het hoog tijd is om iets te doen rond klimaatverandering, rond technologie, de geopolitieke spanningen, maar ook de vergrijzingskost" [1].

The second half of the diagnosis is what makes the first half hard to act on. Society has drifted toward instant gratification, politicians tweeting from inside negotiations, no space left for thorough analysis, and the erosion of long-term thinking is the thing he names as his biggest concern, because everything worth doing takes more time [1]. Climate is the clearest case of the pathology: "Climate change, daarmee moet je bezig zijn. Niet voor jezelf, maar voor je kinderen en je kleinkinderen. En net daarom doen we het niet. Dus dat is voor mij de belichaming van het korte termijn denken" [1].

On technology adoption and the myth of the first mover

He is unsentimental about being early. "Wat technologie betreft is het niet altijd verstandig van first mover te zijn, hè. Kijk naar Apple, heel succesvol, maar is eigenlijk niets first mover geweest" [1]. Being a first follower is often the better position. The genuine danger sits at the other end: waiting until a technology is mature, because the acquisition is the fast part and the absorption is the slow part. "Om die technologie te kopen, dat duurt niet lang. Maar om die embedd te krijgen, om die gebruik te krijgen, om alle voordelen ervan te gebruiken, dat vraagt wel tijd" [1]. That is why the investment that matters is change management, migration and the long view rather than the licence itself [1], and why he tells organisations to tolerate error in the early years: "Maak vooral wel fouten of neem het risico om fouten te maken de eerste jaren. Daar kan je alleen maar van leren en je gaat er sterker uitkomen nadien" [1].

Digitalization also rearranges where work physically sits. Labour-intensive activities went to low-wage countries; if the labour-heavy portion of a task is digitized, the cost base falls far enough that the activity can be brought back to Belgium [1]. The risk side of the same technology is already concrete for CFOs: "De CFO krijgt een telefoon van zijn CEO die vraagt om 25 miljoen over te schrijven naar een bepaalde rekening en nadien blijkt dat het niet de CEO is die aan de leiding" [1].

On overregulation and chaos

He frames the regulatory environment as a field of tension with a bad option at each pole. "Er is een spanningsveld denk ik tussen overregulering en chaos. Wat er nu in de Verenigde Staten gebeurt, dat neigt toch een klein beetje naar chaos" [1]. Europe has overshot in the other direction, and he lists the exhibits: CSRD paperwork, a 2035 combustion engine ban that hands an advantage to Chinese producers, and a piece of legislation that regulates an industry the continent does not have, which he puts with deliberate dryness: "Ook de AI act die we hebben in Europa. Ja, we hebben geen AI, maar we hebben wel een AI act" [1]. The consequence he draws is that overregulation drives investors away [1].

The complication is that he does not believe much changes without regulation. Corporate change is rarely spontaneous; it is triggered by legislation and implementation deadlines, as GDPR was in 2018 and as fleet electrification has been by tax policy [1]. That makes a late start on ESG reporting human and predictable rather than a failure of will [1].

On making non-financial reporting worth something

Sustainability reporting only becomes a strategic advantage rather than an administrative add-on when three conditions hold together: regulatory simplification through Omnibus, automated data capture where most companies are still collecting manually, and alignment of what gets reported with what the company genuinely does to become sustainable [1]. Absent the third, the exercise stays a burden bolted onto the side of the business [1].

On demographics, migration and where talent comes from

With a Belgian birth rate of roughly 1.2 to 1.3 children, migration is not optional if the labour market is to hold [1]. His condition is that it be coupled with integration, education and training rather than reduced to cherry-picking the already highly educated, on the argument that talent is everywhere if you are willing to invest in schooling [1]. The ageing cost sits alongside climate, technology and geopolitical tension on the same crossroads [1].

On what young finance people will and will not accept

The bargain where a junior absorbs a few years of dull work before reaching the interesting material has expired [1]. The response he prescribes is practical: automate the boring basic tasks and compress the training cycle so juniors arrive at substantive work faster [1]. He pairs that with a caution against treating the workforce as one profile, since some people want repetition and stability while others want creativity, and both are legitimate [1].

Takeaways

• Treat the five megatrends as a parallel problem, not a queue; their simultaneity is what is new and what makes them dangerous [1].
• Do not chase first-mover status in technology, but do not wait for maturity either; buying is quick, embedding and driving adoption takes years, so budget for change management and migration [1].
• Expect and permit mistakes in the first years of a technology programme, on the grounds that the learning compounds [1].
• Sustainability reporting becomes an advantage only when simplification, automated data capture and genuine alignment with the business arrive together; otherwise it stays an add-on burden [1].
• Assume change will be triggered by legislation and deadlines rather than initiative, as with GDPR and fleet electrification, and plan the deadline-driven work accordingly [1].
• Verify unusual payment instructions personally; the impersonated CEO demanding a 25 million transfer is a live CFO scenario [1].
• Couple migration with integration, education and training rather than selecting only for existing qualifications, since "talent is everywhere" if you invest in schooling [1].
• Automate junior grunt work and shorten the path to interesting assignments; young finance talent will no longer trade years of dull work for later reward [1].