Throughout the month of July we have delved into transformation in the finance function in relation to change management with the emphasis that in order to transform successfully, investing in effective change management is crucial.
The ACCA report, Transformation challenges in finance states: “Finance departments that invest in change management have an advantage, as the members of the ACCA’s Finance Transformation Advisory Board attest. Understanding how and when organisations at an enterprise-wide level effectively change, getting the right sponsorship, dealing effectively with stakeholders, deploying the right resources, keeping the transformation on the corporate ‘radar’, and positioning the right leader are all critical to delivery model transformation.”
Below is a summary of the key requirements for effective change:
A clear vision
Dictionary.com defines vision as “the act or power of anticipating that which will or may come to be.” In order to anticipate what will come to be, an organisation needs the vision to be driven by strategy and accompanied by a set of objectives. A clearly defined vision, when communicated as part of a change management programme, has the ability to mobilise stakeholders and bring them on board.
Senior management commitment
Whether transformation is driven by the CEO or the CFO, leadership must at the very least be seen to champion the change. As to the role of the CEO, Accenture’s Julie Spillane believes that whether the CEO needs to be visibly involved depends on how profound the change actually is, but she expects the CFO to act as the functional sponsor to create a ‘burning platform’ for finance transformation.
Communication is crucial. Individuals impacted by change within an organisation need to know what is changing, understand the reasons for the change, and most importantly, what they need to do to support the change.
Preparation is at the heart of change management. Essentially, preparation is about the plans that will create a working framework for transformation. These plans depend on the reasons for change and must incorporate an understanding of organisational culture in relation to change.
In essence, the resources required for effective change are subject to the scope of the change. According to the ACCA Transformation challenges in finance report, “So often, finance transformers moving to shared services or outsourcing models underestimate the effort required for change management. Having sufficient resources at each phase of transformation – from developing strategy to achieving ‘business as usual’ acceptance – is key.”
Change is often difficult. Because change is so challenging, most people want transformation to occur quickly so that they may continue “business as usual”. Though, the pace of change is dictated by a number of factors, a good dose of patience, coupled with adaptability, is essential.
The ACCA report sums up organisational redesign perfectly: “Often, finance leaders moving to shared services and outsourcing models forget that the totality of the finance function must be redesigned. Retained roles change significantly in the face of new models; it is imperative to ensure that staff are redeployed, understand their new roles and are retrained effectively.”
Maintaining middle management
Middle management is critical to the actual functioning of any finance function. In any process of change, middle management must be a crucial part of the change management process. In other words, training, communicating with, and utilising individuals as change agents.
Alignment between ambition and capability
“Know thyself” was a Delphic maxim written on the walls of palaces and temples in the ancient Greek world. It is an ancient truth that applies to modern organisations. A business must know what its capabilities are and create a vision for change that fits within those capabilities.
Work within the culture
Working within an organisation’s culture is important. Global organisations will have more culture variations to consider than local organisations, but even within local organisations there are cultural dynamics aligned to demographics. Understanding the culture of a business will dictate how to communicate and implement change effectively.