Part 21 in the Dynamic Planning Series
To borrow from a recent CFO.com article, “FP&A: Let the Fun Begin,” technology should eliminate grunt work and boost the value of financial planning and analysis. With many corporate processes, technology is driving fundamental changes. In almost every industry, today’s souped-up business environment drives a concomitant need for heightened strategic input.
These thoughts were recently echoed during an airing of the long-running “Coffee Break with Game-Changers” program on the VoiceAmerica Talk Radio Network. The particular topic was “Finance Leadership: Ready to Be a Tech-Savvy CFO?”
I bring up these two examples from the mainstream media to illustrate that finance transformation isn’t some “ivory tower” concept being debated by aged and wise dons; it is intrinsic to the global business world today. At its most basic level, it is Darwinism in one of its truest forms. To quote H.G. Wells, “Adapt or perish, now as ever, is nature’s inexorable imperative.”
How organizations adapt
Success at finance transformation demands more than the best strategic and tactical plans. It requires an intimate understanding of the human side as well, and what must change to deliver the desired results. To begin with, the organization must address the human side of change systematically, as any transformation plan will create people issues. A fact-based approach demands data collection and analysis, planning, and implementation discipline as much as a redesign of strategy, systems, or processes. A formal approach to managing the transformation should be developed early but adapted often as change moves through the organization and directly affects job descriptions and organizational goals.
Change is inherently unsettling for people at all levels of an organization (have those copies of “Who Moved My Cheese?” close at hand). Organizations that work well together, that are aligned and committed to the transformation initiative, are best-positioned for success. As the transformation progresses, it affects different parts of the organization in different ways. The organization must be prepared to work across silos in order to be successful.
Individuals are inherently rational and will question to what extent the transformation is needed, whether the company is headed in the right direction, and whether they want to personally commit to it. Company leadership is responsible for addressing these challenges. Leadership needs to address reality and articulate a compelling narrative while also providing a roadmap to guide behavior and decision-making.
Leadership must over-perform and be the enthusiasts that create critical mass for change. This requires more than mere buy-in or passive acceptance; it demands that leadership take ownership and responsibility for making things happen. Ownership is often best created by involving staff in identifying issues and crafting solutions.
Well-planned, consistent communications that go both ways
The best-laid plans are only as good as the organization’s ability to understand, adapt, and act on them. Too often, those leading the financial transformation make the mistake of believing that employees understand the issues, feel the need, and see the new direction as clearly as they do. The most successful transformation initiatives reinforce core messages through the delivery of timely and regular updates. Communication needs to be both outbound and inbound. It should be targeted to provide staff the right information at the right time and to solicit their input and feedback. Organizational change often requires over-communication through multiple, redundant channels. However, communication must be well-timed, coordinated, and consistent.
We will address these issues and more at the many FP&A roundtables and conferences we are hosting in 2018.