Throughout the month of July we have looked at all aspects of transformation within the finance function, based on the ACCA report Transformation challenges in finance. Notably, in every aspect of the report is that whatever transformation, is at hand, effective management of that change is imperative. In a preceding blog posts, “change management” has been mentioned as a practice thus it would be a worthy idea to delve into change management a bit more.
According to the Project Management Institute (PMI), “Change management is a comprehensive, cyclic and structured approach for transitioning individuals, groups and organisations from a current state to a future state with intended business benefits.” Yet, in their report, Enabling Change through Strategic Initiatives, they further elaborate, saying, “Projects and programs by their very nature create change. To successfully implement organisational strategy, companies need project and program managers with the skills to drive and navigate change, while ensuring that those changes are strategically aligned to business goals. The success or failure of a change initiative is not just about initiating, planning, monitoring, executing and evaluating the project that will drive the change. It also involves preparing your organisation for transformation, ensuring stakeholder buy-in, and engaging executive sponsors to champion and support the change before, during and after its implementation.”
There are two key points. Firstly, at its heart, change management is about tried and tested processes. Secondly, a key driver in effective change management is ensuring that leaders and managers have the necessary expertise to drive and navigate change.
According to the Prosci report, Best Practices in Change Management, the greatest contributing factors to change management success are:
1. Active and visible executive sponsorship
2. Structured change management approach
3. Dedicated change management resources and funding
4. Frequent and open communication about the change and the need for change
5. Employee engagement and participation
6. Engagement and integration with project management
7. Engagement with and support from middle management
Furthermore, according to the Prosci report, the obstacles to effective change management are namely:
1. Ineffective change management sponsorship
2. Resistance to change from employees
3. Insufficient change management resourcing
4. Division between project management and change management
5. Middle management resistance
The ACCA report, Transformation challenges in finance, states perfectly, “There is little ambiguity about the secret of effective finance function transformation. Whether leaders outsource or run their own captive shared service centres, move quickly or evolve the model over time, they agree on a single set of requirements for change.”
There is a wealth of knowledge available regarding change management however what it really seems to come down to knowing your organisation – its culture, strategy, the need for change and having the right leadership to drive that change.