Yesterday we listed the first three key drivers of transformation success that CFOs must know according to EY. Today, we list the rest of them below.
As economic uncertainty continues, CFOs continue to be integral leaders in their organisations’ transformation for long-term competitiveness.
While there are gaps in organisations’ ability to execute successful transformation, the good news is that nearly half of the CFOs are aware of that, EY pointed out.
The other three key drivers of transformation success
Transformation success comes from putting people at the center, EY advised, adding that CFOs can more than double the chances of transformation success by consciously empowering their people.
The rest of the key drivers of transformation success are as follows.
Empower: delegate decision rights and deliberately focus on building a culture of safe experimentation
Transformation journeys are not linear and can be disrupted by events during their execution.
In EY’s research, leaders of successful transformations suggested that taking a step back or changing course and following another route wasn’t necessarily a bad thing.
To smooth over those changes, leaders should set expectations from the outset that changes to plans were possible, as well as communicate the changes themselves as transparently and as early as reasonably possible.
Traditionally, finance functions perform technical work that require precision and working to regular monthly, quarterly and annual cadences. While this drives a culture of no surprises, it can also stifle some of the capabilities and behaviors that drive innovation.
In EY’s research, finance function staff were more inclined to believe that failed experimentation would negatively impact their careers (70% of finance workers versus 62% of workers in all functions).
This difference was also replicated in the attitude of leaders in their willingness to fund innovation and new ideas (33% of finance leaders versus 41% of all leaders).
As transformation becomes a constant, CFOs must encourage creativity and innovation, so that their organizations are capable of adaptive change and learning.
They need to create a safe environment, communicating that it’s okay to experiment, fail fast and learn without a negative career impact.
However, it’s important to also set clear boundaries around the scope of experimentation and establish realistic expectations that experimentation and innovation aren’t open-ended.
Embracing this type of disciplined freedom can create openings for new perspectives and unlock significant new insights at the expense of controlled failures.
Build: quickly show how the technology will help deliver the finance vision
Combining technology with the right skills is crucial in making the transformation real.
Therefore, it is unsurprising that innovative technology is often at the forefront of the finance leadership’s transformation efforts.
In fact, 38% of CFOs identified the pursuit of technology and digital innovation as a key motivator for initiating transformations.
That said, only two in five senior finance leaders (43%), including CFOs, identified technology as among the top three biggest challenges to delivering successful transformations.
Surprisingly, even today many transformations deploy technology changes with an attitude that workers are simply expected to attend trainings, then adapt and adopt.
Often there is little consideration of the end user during the design phase, or how to engage with them in a way that helps them understand the changes and provide productive feedback on further product enhancements.
Taking an outside-in perspective of the technology design can help prevent extravagant groupthink among the project team in which creative sessions lead to overly complex requirements.
Engaging the users earlier can lead to simpler processes where essential data gets captured to drive better customer, supplier and employee experiences, rather than a model in which all possible data is captured and then an overly complicated system is designed to use it.
Finance leaders would also benefit from a product-based approach to technology design whereby users can test and provide feedback at various stages throughout development.
This will improve staff engagement by allowing them to influence the design.
It can also improve the ultimate success of the technology implementation as staff will have been able to experiment, learn and master the technology along the way.
Collaborate: design for collaboration and co-create new ways of working
Although nearly half (48%) of finance leaders believe that processes were designed to ensure good collaboration across the business during the transformation, only 31% of employees in the finance function agreed with this.
This gap is also significant when compared to other functions.
It points to the wider challenge that finance workers don’t feel that leaders are seeking or valuing their input during the transformation.
To increase the chances of transformation success, our research suggests that consciously creating the space for new ways of working is critical.
CFOs need to break down siloed and hierarchical ways of working, and adopt a cross-discipline approach that brings in fresh perspectives and enables everyone involved in the transformation to reimagine process, ownership and empowerment.