There can also be a disconnect between the impact of change from the perspective of the CFO and the finance leadership team versus the impact on middle managers and the teams working beneath them. This is where honesty in communicating what may be changing is essential. Finance teams will feel more supported the more transparent CFOs can be about the changes and what they mean, the expectations of middle-management’s role, and the relative balance between the opportunities and the risks.
Key actions for CFOs:
- Build trust across the leadership team and workforce by engaging them in collaborative design sessions to capture ideas, test thinking and agree on priorities
- Assess the health of your teams through influencers (often within the layers of middle-management) and digitally enabled tools that can provide anonymized safe-places for capturing undiluted feedback about staff feelings and concerns.
- Be open to new ideas and concerns from all levels within the team, and actively and visibly respond to them accordingly. Demonstrate that you’ve heard what the finance team is saying, either by making changes or explaining why things need to remain as they are.
- Set realistic expectations by being honest about the journey ahead and clearly articulate both the opportunities and the challenges the transformation may bring.
4. Empower: delegate decision rights and deliberately focus on building a culture of safe experimentation
Transformation journeys are not linear and can be disrupted by events during their execution. In our research, leaders of successful transformations suggested that taking a step back or changing course and following another route wasn’t necessarily a bad thing. To smooth over those changes, leaders should set expectations from the outset that changes to plans were possible, as well as communicate the changes themselves as transparently and as early as reasonably possible.
Traditionally, finance functions perform technical work that require precision and working to regular monthly, quarterly and annual cadences. This drives a culture of no surprises. This can stifle some of the capabilities and behaviors that drive innovation. In our research, finance function staff were more inclined to believe that failed experimentation would negatively impact their careers (70% of finance workers versus 62% of workers in all functions). This difference was also replicated in the attitude of leaders in their willingness to fund innovation and new ideas (33% of finance leaders versus 41% of all leaders).
As transformation becomes a constant, CFOs must encourage creativity and innovation, so that their organizations are capable of adaptive change and learning. They need to create a safe environment, communicating that it’s okay to experiment, fail fast and learn without a negative career impact. However, it’s important to also set clear boundaries around the scope of experimentation and establish realistic expectations that experimentation and innovation aren’t open-ended. Embracing this type of disciplined freedom can create openings for new perspectives and unlock significant new insights at the expense of controlled failures.
Key actions for CFOs:
- Establish clear roles and responsibilities and delegate decision rights down from the finance leadership team. Be clear about where teams have the freedom to make decisions and where they don’t.
- Foster a culture of safe experimentation and create a “fail fast” mindset to capture and realize opportunities that a “no surprises” mindset may miss.
- Define “failing fast” so teams understand the leeway for agility while also meeting macro performance targets.
- Let go of the drive for perfection around problem solving and give teams sufficient autonomy to do their jobs, and sometimes not get it 100% right the first time.
5. Build: quickly show how the technology will help deliver the finance vision
Combining technology with the right skills is crucial in making the transformation real. Therefore, it is unsurprising that innovative technology is often at the forefront of the finance leadership’s transformation efforts. In fact, 38% of CFOs identified the pursuit of technology and digital innovation as a key motivator for initiating transformations. That said, only two in five senior finance leaders (43%), including CFOs, identified technology as among the top three biggest challenges to delivering successful transformations.
Surprisingly, even today many transformations deploy technology changes with an attitude that workers are simply expected to attend trainings, then adapt and adopt. Often there is little consideration of the end user during the design phase, or how to engage with them in a way that helps them understand the changes and provide productive feedback on further product enhancements.