How CFOs can transform to Finance 4.0
Change is happening in Finance, and we have outlined both how the mindset should change and how to create time and energy for doing more value-adding work. However, knowing that change should happen and making the change happening are two very different things. Especially if you are a CFO and looking at your finance function and thinking how you can transform it to Finance 4.0.
We should recognize that creating a change like this is hard, however, there are ways to make it simple and thereby easier to execute. In this post, we will discuss the four dimensions that CFOs need to consider creating the change in their teams. In short, they are:
- Fostering conviction: I understand what is being asked of me and it should make sense.
- Role modeling: I see leaders and colleagues already enacting the change.
- Reinforcing format mechanisms: I am supported by the company with the right organizational structure, tools, etc.
- Developing talents and skills: I am given training and time to develop the new skills and to perform in the new ways.
If these four dimensions are in place, we can expect that our team members’ mindset and behaviors will start to change. It won’t happen in a day, but they will take micro steps in the right direction.
Working the four dimensions
Let us look closer at how to work with each of the four dimensions to help CFOs create a transformation plan to Finance 4.0.
Fostering conviction
There are two parts to this 1) create a vivid ambition that will excite the team and 2) communicate the ambition in a clear and compelling manner. The first bit the CFO should do together with her leadership team. She needs to get them onboard and aligned around the changes that should happen. Once aligned they can communicate as a team but it’s important that it’s not just one big bang communication. The ambition and change should be discussed continuously over a longer period.
Role modeling
In most organizations you will find people who are already working in the new ways you want the whole team to do. However, instead of simply praising these in a closed-room conversation you should elevate them in public and label them as role models. Not to glorify these people but to show other team members that the change is possible and here are people they can learn from.
Reinforcing with format mechanisms
It is likely that you will need to make organizational changes for the changes to take root. Also, you might need new tools and systems to support the new ways of working. These might not all be in place from day 1 but you need to have the plan in place when you first communicate about the changes. Otherwise, you will meet a lot of resistance to the change because people feel you are not giving them a fair chance to succeed.
Developing new talents and skills
It is hard for anyone to start doing new things. Old habits must be broken, and new ones formed. Often, we are not competent enough to perform well or perhaps we need to learn new skills from scratch. You can try to hire new people that fit the new profile, however, rarely is it possible to completely replace the team. Therefore, you should also create a training plan to go along with the change. In that way people will feel there is weight behind your words of change and feel supported in that change.
These are some simple steps to take to start the transformation to Finance 4.0.
Getting ready to start the transformation
Now you know WHAT needs to change and HOW to do it. All that is left is to call in your leadership team and get to work on the ambition. If you are already in the middle of the transformation perhaps you can validate your plans against the four dimensions of change. Do you have a plan for all four or have you moved to fast or superficial across one or more of them? Don’t go light on the change plan as it only means you will also see light results.
The final thing to be conscious of during your transformation is to plan for short term wins. When people start to act in new ways, and they are successful how are you going to celebrate? Short term wins build momentum but only if they are recognized. Otherwise, your team will quickly start to doubt if changing their ways of working is worth it.
Now it’s time to start changing and creating Finance 4.0. Are you ready?
