The CFO’s relatively new position as a close partner to the CEO, Bert to the CEO’s Ernie, places them right at the heart of organizational decision making. Furthermore, their knowledge of the figures and view of the company as a whole means that they are now one of the primary drivers of change. Scott Brennan, Global Managing Director of Accenture's Finance & Enterprise Performance unit, notes that: ‘About a third of the CFOs we talked to are playing a leading role in building a rationale for business transformation.’
Despite the volume of content produced around change management, the success of major corporate change programs remains essentially unchanged, having remained at roughly 30% for a number of years. In order to make sure that this number rises, CFOs must know how best they can use their position to drive change in their organizations.
When discussing the impact that CFOs can have on change management and business transformation, it is important to first of all distinguish between the two, as many executives still fail to do so. ‘Change management’ is the implementation of finite initiatives, which may or may not apply to the whole organization. The focus here is on executing a well-defined shift in the way things work. Business transformation, meanwhile, is when businesses embark on wholesale change programs, focusing on a portfolio of initiatives which are interdependent or intersecting. Transformation aims to reinvent the organization and discover a new or revised business model based on a vision for the future.
The first step for the CFO in implementing change is finding the problems that are holding the business back from reaching its full potential, diagnosing why these are occurring, and evaluating the scale of change that’s required to solve them. The CFO is also well positioned to evaluate the success of potential changes and transformations, both in estimating the ROI before they are embarked on, and for measuring it as the changes are put in place.
The main priority to ensure changes go smoothly is ensuring that the right people, skills, and technology are in place to make the changes. All of these have to be carefully budgeted for, and the CFO needs to work closely with leaders in HR and IT. Wholesale changes also often require that the company culture change to suit them. The sources of resistance that could slow change must be identified, and appropriate strategies to mitigate such resistance established. In terms of getting staff on board, CFOs can provide the fact base for outcomes that helps CEOs and the leadership construct narratives that disaffirms beliefs that the old way was right, and emphasizes the value of the change. They can consider the value of offering financial incentives to compensate for the extra work that may be required, and also reward staff simply for behaving in a way that supports the new changes. This may mean adjusting Key Performance Indicators to get rid of any that were driving old behaviors, in favor of those that enforce the new ones that are desired.
The success rate of major corporate change programs is still not good enough. This means that CFOs are failing to do the job now expected of them as business partners, and some need to get out of the old mindset that they are only responsible for accounting tasks and making sure the numbers make sense.