In business, as in life, the only real constant is change – attempting to distill the best practices to managing change and navigating it into a list of tips for today's CFOs (or any C-suite executive) can feel impossible. After all, so much of truly effective change leadership is a dynamic sense of how to best balance intuition against provably sound strategy, and there are many moving parts. That's especially true in the finance department, where all shifts are most acutely felt.
We thought we'd give it our best effort, though, for two reasons. The first is that there's no getting around the fact that change must be managed, because it's always happening (and always affecting organizations and individuals alike). The second is that, in any business, no role is more defined – or impacted – by transformational demands than the CFO.
Steering The Finance Team In Times of Transformation: Tips For Today's CFOs
Change doesn't need to inspire dread. It can certainly be a challenge, particularly as it begins to affect the finance function of a company and the accounting teams that oversee the processes that balance the books, but insurmountable – we think not.
Resisting or attempting to ignore change instead of adapting to it and recognizing it for the potential growth opportunity will – at best – lead to stagnation or a status quo that limps along. At worst, functions and communication can start to break down and overall performance can grind to a halt. CFOs who embrace change, whether it's the normal patterns and evolutions associated with technological tools or an all-out crisis will experience these kinds of transformations as a crucible. A resilient, nimble organization with better finance agility is forged within it.
Identify Your Biggest Pain Points As A CFO Change Leader
The first step to effective change leadership within the finance department is to identify the places where friction is likely. These are the challenges that are the most pervasive and tend to recur. Any CFO preparing to lead through an evolving environment should recognize them and anticipate the hurdles they will throw up in the face of progress
• Scalability and Hiring
Even in relatively normal and even keeled times, hiring is a headache for CFOs and other finance leaders. Scaling, which is in itself a critical moment of transformational growth, hiring becomes even more important and – potentially – even harder to do.
- Cost Containment
As steward of their organization’s financial assets, strategic decisions around cost-containment fall to the CFO, who must find ways to save costs by minimizing expenditures without completely inhibiting growth initiatives.
- Shaky Implementation
Anything that's poorly implemented can lead to disaster, but that's especially true of the growing pool of technology options. Whether it's a massive ERP migration, new software or automation, the potential for shaky implementation is always there, ready to throw a wrench in the works.
- Institutional Knowledge
Information siloes and interdepartmental gatekeeping spells trouble for any CFO – and eventually the organization as a whole. It's certainly an obstacle to well-managed change, and can even lead to other pain points, like shaky implementation and internal resistance.
- External Uncertainty
None of what a CFO does occurs in a vacuum. Economic forces, including everything from the typical ebbs and flows of the market all the way up to widespread economic uncertainty can make strategizing difficult when you can't predict the outcome.
- Internal Resistance
We are a species that can barely handle an update that changes the layout of our pictures or the location of a button on our favorite social media apps. Selling people on a major organizational change can be an uphill battle. CFO efficacy will always depend on the soft skills that solicit emotional buy-in from within the organization.
Top Tips For Today's CFOs Who Must Turn Challenges Into Opportunities
A leader differentiates themselves when they have the ability to receive challenges like the ones listed above and already have a strategy for leveraging them into asset opportunities. They're never reactive, and rarely caught off guard by predictable snags because they've cultivated a mindset of adaptable resiliency. Here are some tips for today's CFOs to turn that mindset into organizational culture.
- Forge Strategic Partnerships
There's a cliché that says the CEO and CFO will inevitably end up in a power struggle. But a CEO's responsibility to guide a business toward a vision does not need to be at odds with the CFO's responsibility to budget adherence and financial planning. Effective communication skills that foster partnerships in the C-suite are the strongest tools a finance leader has. Sharpen them at the outset to create an atmosphere where strategic decisions are made in tandem, not parallel to one another.
- Cultivate a Growth Mindset
Protecting cash flow becomes the item of the day in times of change. Zooming out for a clear picture of the consequences of instinctive expenditure cuts can help channel cost-saving measures in a way that leaves room for growth instead of hobbling it.
- Remain Pragmatic
The adoption and subsequent implantation of new technologies takes time. The CFO knows better than anyone that any solution that bills itself as a quick fix or magic wand is likely to be more flash than substance. Remaining pragmatic, being discerning about and delegation will create a solid foundation for implementation projects you take on.
- Embrace Transparency
Sunlight is indeed a good disinfectant, and it does wonders for institutional knowledge, too. As frustrating as tribal knowledge, disparate processes and gatekeeping can be, they're also best handled during times of change. It's the perfect opportunity to reframe the "this is just how it's done" mindset into a universalized knowledgebase that anyone can access when they need to.
- Model Confident Adaptability
Change comes for economic uncertainty, too. The market is as likely to change from down to up, as any CFO that oversaw the survival of their organization through The Great Recession can tell you. A CFO who plans for the worst but hopes for the best will be a steadying force from within.
- Invest in People
When you invest in people, the dividends tend to be an engaged team that works with you and not against you. When your decision-making reflects an authentic commitment to the people you hire, they'll recognize that decision-making as effective and worth trusting. Hiring top talent, protecting them from burnout and fostering internal development from the beginning will mean diminished resistance in times of change.
If You Want To Stand Out as a CFO, Know When To Ask For Help
A collaborative strategy is often the CFOs most overlooked and underused option. We expect CFOs to be comprehensive, which can often feel like a mandate to do it all and then some. In many cases, that isn't just a tall order, it's an impossible one.
Outsourcing is delegation at scale. With a reputable, committed partner, CFOs can bring measurable results that contain costs in the short-term and foster growth in the long-term. It can free up resources to be reinvested in the CEO's vision for the company and the efficiency it unlocks is anathema to the institutional knowledge that holds companies back.
In times of change, one of the smartest adjustments you can make is one that allows a laser-focus on your organizations core competencies. It's a simple pivot that results in a rather elegant solution, freeing leadership from value-neutral tasks that allow for little more than treading water.
Personiv has been this partner to organizations of every size and across a wide variety of industries for over 35 years. In that time, we've seen, weathered and tapped into the potential of changing markets and technologies. Our people-powered solutions can save up to 75 percent of costs, allowing organizations to prepare for and make the most of transforming environments. Our nimble, scalable solutions begin with teams as small as one. We hire only the top skilled accounting professionals in sought-after offshore locations and put them to work for you – and only you.
Contact us today to learn more about what sets us apart and how an outsourced finance and accounting solution with us gives organizations a competitive edge in changing times.