4 Steps To Help CFOs Define

from Finance Derivative Magazine Issue 2

Switching The Tax Evidence

4CFOs

While no one can with any degree of certainty predict how the pandemic will continue to affect our way of work, businesses now find themselves in the midst of the highly anticipated second wave. In preparation, business leaders have no doubt been looking at how they managed their company and its employees during the first wave, in an effort to limit the strain on their businesses a second time round.

At the beginning of this year, Grant Thornton conducted its annual CFO survey to better understand their priorities for the upcoming year. But due to the upheaval caused by the COVID-19 pandemic, the respondents were resurveyed in May. This offered additional insights into how priorities have changed as a result of the pandemic. CFOs’ time prior to the pandemic was traditionally divided across ‘strategist’, ‘change agent’, ‘producer’ and ‘guardian’ roles. However, according to the second survey conducted in May, CFOs’ main focus is now on their leadership roles as strategists and change agents, with less time spent on the day-to-day transactional responsibilities typically associated with ‘producer’ and ‘guardian’ roles.

This shift in the CFO role has been talked about for some time, but it seems the current crisis has forced CFOs to dedicate more time to strategic leadership, organisational transformation, and performance management.

Shifting focus and shaping the new normal

Since March, organisations have been busy adjusting to the twists and turns of the pandemic, with CFOs and their finance functions facing unique challenges as a result of distributed working environments. While the fallout is yet to be fully revealed, we do know that business leaders are settling into a ‘new normal’ that will need to be shaped by how they want their business to function in the future.

With the economic uncertainty caused by the pandemic, it is now more important than ever for the finance and accounting organisation to focus on planning, analytics, and advisory. It’s precisely these areas where digital finance transformation initiatives are often focused―applying automation to unlock accounting efficiency, which enables the organisation to be more strategic and use data to achieve clear visibility into both financial and operational performance.

But achieving the full value of automation to enable this structural change requires the organisation of tomorrow to not only change technology, but also challenge and reimagine hardened accounting processes. Success necessitates engaging every level of the organisation to embrace digitisation rather than fight it, reallocating where personnel spend their time, and developing a new talent mix from within the organisation.

With this in mind, here are 4 steps CFO’s should consider to drive this change and successfully shape their new normal:

1.Build ‘Team Change’ and put your new model into play

Work with a another senior leader, such as VP of Finance, Controller, or Chief Digital Officer, to craft a vision statement for the accounting and finance organisation, such as the goals for the organisation by the end of 2021 or 2022. Identify high-level gaps and obstacles between your current and future states and create a milestone-based roadmap.

Engage your most passionate team members to act as ‘champions’ and establish collaborative, cross-functional teams that include front-line accounting and finance team members to identify processes that are ripe for reinvention. Then identify ‘enablers’, who can help to ensure that personnel have the educational material they need and understand new processes. Enablers can also help to communicate the career development opportunities of learning new ways to work.

Additionally, make sure you have ‘scorekeepers’ who can measure progress using quantifiable metrics to gauge success period-over-period, with feedback to the broader team on adoption and results.

2.Proactively tackle the key obstacles

What are some of the critical obstacles you’ll likely face on the road to change? Common issues range from a poorly-defined vision that lacks buy-in to a reliance on tools that finance and accounting can’t own and manage themselves.

Take proactive steps to manage these obstacles before they become a problem. For example, if your overall digital vision is not clearly defined, hold integrative discussions within your organisation – bringing together representatives from all parts of the business – to come up with a joint digital vision.

3.Incentivize change. Empower ownership. Enable talent.

In addition to a clear vision, communication and enablement are some of the key tactics to get the frontline on board. Be sure to establish rewards and recognition, which can act as a powerful incentive. Some organisations, for example, establish rewards programs with recognition awarded based on measured results and improvement.

It’s also important to empower ownership by ensuring technology can be confidently owned and managed by end users. As part of this, you need to enable talent by ensuring easy access to skills development. Whether changing roles, changing technology, or changing processes, it’s vital that no talent is left behind.

4.Measure process performance & continuously improve

Establishing process KPIs provides a powerful way to gauge the level of success and provide a feedback loop on where the next change initiative should be focused. For teams, it’s a way to strive toward and transparently measure against established goals. Fortunately, modern financial close management and automation tools automatically collect KPIs and can often identify trends over time to show period-over-period improvements.

Whatever the preferred approach, it is clear that CFOs should act now to make sure their actions have a maximum impact in the new normal, not only to affect how they work in the future, but also the success of the business that they are in.