Finance transformation’s front-end alignment

Ask five finance leaders to jot down what their function’s transformation success looks like, and there’s a good chance you’ll receive five different versions. That’s less a knock on finance leaders than a sign of the pervasive need to define what “digital transformation” truly means for the finance group and each of its members.

Two types of misalignments commonly hamstring finance transformation journeys. The first arises when finance leaders fail to convey a consistent definition of transformation or a shared vision of its success. A second but equally pervasive form of misalignment stems from a three-way disconnect among the organisation’s strategic objectives, the vision and goals of finance transformation, and the individual behaviors throughout the finance group required to execute and sustain this change effort.

While automation is crucial to finance transformation, the scope of these activities extends well beyond implementing new technology systems and tools. Finance transformation should fundamentally reimagine how the function leverages skills, processes and technology to drive long-term value, improved internal and external customer experiences and ongoing performance improvements. Delivering on the potential value of new technology requires a significant investment in resources and careful attention to communications throughout the effort.

Savvy chief financial officers (CFOs) also recognise that transformation requires a change in culture – one that often fosters innovative solutions, fully optimised processes and new behaviors at every level of the function’s hierarchy.

Achieving that success starts with establishing a compelling finance transformation story via a combination of math (e.g., performance links and key performance indicators) and magic (e.g., narrative and behaviors). If your eyes glaze over at terms like “storytelling,” “behaviors” and “change management,” the requisite magic is far less mystical than you might expect. In fact, composing a successful transformation story deploys skills – rigor, conciseness and specificity – that reside squarely within finance leaders’ wheelhouse. Four actions can reduce the likelihood of transformation misalignment:

1. Set the strategic vision: Start by framing finance transformation as a set of concrete goals that support the organisation’s overarching strategic objectives. Finance leaders sometimes underestimate the importance of defining finance transformation in terms of the value and return on investment (“ROI”) it will generate for the company. Financial professionals are more likely to buy into the big picture when they understand how transformation fits with the overall business strategy and, equally important, what’s in it for them.
2. Link guiding principles to KPIs and individual behaviors: Developing a handful of guiding principles establishes guardrails for the project teams tasked with executing transformation initiatives. These directional markers clarify the effort’s purpose and objectives, which can help limit the turnover that often increases as finance transformation initiatives progress. “Leading with innovative processes,” “automating every chance we get,” and “standardising processes” represent effective guiding principles. If a focus on automation is a guiding principle, related KPIs (e.g., team member capacity) and individual behaviors (e.g., spending more time on consultative, strategic activities) should support that guiding principle.
3. Communicate clearly, concisely and consistently: Straightforward and succinct transformation definitions and objectives help ensure that finance leaders convey a consistent message. Effective communication is two-way in nature. Finance professionals at every level of the function should have easily accessible channels to raise questions and get answers about how transformation affects their roles and work. Finance leaders also should recognise how understanding and empathy can curb resistance. It’s beneficial to acknowledge that the transformation initiative is a big change, and team members may be uncomfortable for a bit.
4. Manage behaviors methodically: Effective behavior management plays a crucial role in reducing friction, limiting turnover and enhancing the value of finance transformation. Behavioral change is difficult to measure, so finance leaders should make it as tangible and real as possible through mechanisms like behavior maps. These straightforward lists, which should address specific finance roles, identify pre-transformation behaviors that are no longer needed and post-transformation behaviors that help drive value. Attrition often is an unavoidable side effect of large-scale transformations. Proactively planning how to fill select positions marks another practical change management action finance leaders should perform.

The results of Protiviti’s annual survey of global finance leaders and managers show that CFOs and other finance executives view the implementation of advanced automation with more urgency than do other finance managers and professionals. That makes it even more important for finance leaders to communicate to their teams that finance transformation is not a destination but rather a continuous journey – one that begins with finance leaders getting their stories straight.