What CFOs should consider when overseeing change
When change is announced there is invariably resistance
By Marcus Boyle, partner and finance transformation leader, Deloitte UK | CFO UK | Published 15:01, 19 July 12
Today’s chief financial officers are increasingly required to partner the chief executive to drive transformations in their organisations. A recent survey we carried out found that on average CFOs aspire to spend about 60 percent of their time as a catalyst for change.
We have run over 100 CFO transition programmes for newly appointed CFOs to help them work out their corporate and personal priorities as they move into their new role. During these sessions we have discovered many CFOs who aspire to making their finance function better at the ‘catalyst’ function often have a department that is ill equipped to go beyond the numbers, and effectively drive organisation-wide change.
So why is there a resistance to change? Here are some practical tools CFOs can use to diagnose and navigate change efforts more effectively.
Triggers of resistance
Whenever a change initiative is announced, there is invariably resistance from organisations, which typically falls into one of three categories.
First, there’s often a belief that change will result in more work with little benefit. This is an understandable reaction in individuals, particularly when they don’t understand or haven’t had it set out for them how the new world will look.
The most common occurrence is when a group level finance director or controller asks for new information from a division or business unit FD without accounting for the extra work demanded of that unit.
For CFOs to diagnose potential resistance from added work, they need to commit to assess how any new processes will impact the workload of different stakeholders.
Next, staff often think change will result in a new role but with less perceived job satisfaction.Transformed work roles sometimes lead to less job satisfaction or a change in worker status, which could trigger resistance.
For example, many CFOs look to create savings in finance by implementing a shared service centre. While moving staff from multiple locations to a centralised shared-services centre will undoubtedly cut costs through efficiencies, it might also give decreased job satisfaction and therefore increase the turnover of staff, which ultimately undermines the cost saving benefits. To manage change, CFOs should consider the impacts of work changes on individuals and their morale.
And lastly, the third rail of resistance arises from change that may impact power relationships in an organisation. For example, when the group level CFO seeks greater transparency into the business units and their operations, it may reveal information that dramatically alters the power between the centre and business units.
This information may reveal the shortcomings of the business unit CEO and undermine their power and influence in the overall group. This goes to the heat of where power in an organisation sits. Is it at the centre, at the division or in the business unit? Making changes to the hierarchy or a perception that it is changing may have consequences that need to be understood prior to making the alteration.
The most challenging change we see for CFOs is cultural change – diagnosing and altering the underlying pattern of beliefs and ways of working in the organisation.
Changing culture requires change at the belief level, which is often substantially more difficult than process or information systems change. While CEOs have the authority to drive cultural change across a company, CFOs have to be supportive of a chief’s company-wide culture change efforts. So, any change to culture in the finance department needs to be consistent with the overall organisation. Sometimes, this can be limiting for the CFO.
Still, CFOs can help diagnose dysfunctional cultural attributes and challenge underlying beliefs to help drive culture change. There are a series of practical steps CFOs can take to do this.
Share:Facebook Twitter Google Plus Stumble Upon Reddit Share This Email this article
A typical “hold” period of nine to 18 months can generate increased sale valuemore ..
At least 15 IPOs with over €250m proceeds are planned before the end of the summer, PwC saysmore ..
Oil and gas company says it wants to get closer to “high growth” LNG marketsmore ..
Backed by Coinbase, the move is part of a digital-first strategymore ..
Alex Hope, MD of Double Negative, explains what the autumn statement really means for UK VFXmore ..
Regulators recognise the value of storytellingmore ..