Change and the CFO: How to Drive Transformation

by Ajit Kambil, Deloitte LLP, 12 July 2012

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topics:
Management

tags:
change management finance transformation

Today’s CFOs are increasingly required to partner with CEOs to drive transformations in their organizations. Indeed, our North American CFO Signals survey finds, on average, that CFOs aspire to spend about 60% of their time as a catalyst for change and a strategist in their organizations.

Yet we find that many CFOs who aspire to the catalyst role are often ill equipped to go beyond the numbers and effectively drive organization-wide change that improves future company performance.

This article examines sources of resistance to change and provides some practical tools for CFOs to diagnose and navigate change efforts more effectively. In addition, we clarify how CFOs may effectively support and influence change in their organizations.

Triggers of resistance

Whenever a change initiative is announced, there is invariably resistance. It is change, after all. That resistance typically falls into one of the following three categories, each of which may be diffused by proper information, process and work design, and high-level sponsorship.

More work; no payoffs. A key type of change that invites resistance is one that creates new work without payoffs for those doing the work.

The most common manifestation is when a group level CFO or controller asks for new information from a division or business unit CFO without accounting for the extra work demanded of that unit. If the business unit CFO and CEO do not value the information requested, it is very likely the request will be resisted, slowed, or done in an ad hoc or untimely way.

Avoiding this form of resistance requires consideration for the extra effort required at the business unit level and perhaps reducing other demands on that unit to free up resources to gather and provide the information to the group level.

For CFOs to diagnose potential resistance from added work, they need to undertake a process-stakeholder analysis, which will diagnose how new processes impact the work effort of different stakeholders.

New roles; less satisfaction. Another trigger for resistance arises when work roles are transformed, leading to less satisfaction or a change in worker status.

For example, many CFOs look to create savings in finance by implementing a shared-services solution. While moving key staff from multiple locations to a centralized shared-services center may immediately appear to reduce costs, the real outcome could be reduced client satisfaction and increased turnover – undermining the cost saving benefits.

When jobs and the location of jobs are redefined through a shared services initiative, the satisfaction of existing workers may be reduced. They may have less connection with their local clients and less of a sense of being appreciated and valued by the finance function. These changes may engender resistance to change or reductions in productivity, undermining change efforts.

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