Finance Transformation: Change Management and Overcoming Resistance

Ken Thomas, Managing Director Business Performance Improvement
Kathie Topel, Director Business Performance Improvement

As more companies tackle transformation, finance organizations, as scorekeepers, need to make sure they stay ahead of the change curve. The use of data and technology is often the first way finance looks to add strategic value to the company, but the key to success may actually lie in how effective finance leaders are at selling the change to the people doing that work.

To be clear, we’re not talking about incremental change, such as the automation of manual processes. Rather, we’re talking about transformative changes requiring a fundamental shift in the way people work, who they work with, and how they think about their work and the contributed value. In finance, such changes might include the replacement of high-volume, repetitive tasks with more strategic, data-driven decision-making, risk management and predictive analysis.

Take balance sheet reconciliations, for example. True transformation might include the use of automation to prioritize risks in specific material accounts and improve data quality, flow, benchmarking and visualization. In such an environment, a key enabler of change is the learning and development required to ensure that people are not only developing the skills they need to perform the new processes but are also empowered with the mindset to embrace the new working philosophy.

In this sense, change management is people management, and as such, it is likely to be met with a certain amount of resistance – it’s just human nature. This resistance can be overcome, but it requires careful planning.

Effective people management in any transformation must look beyond the moment and toward a defined ideal future state. With the future state defined, the transformation plan needs to include three critical people elements:

  • Communication. Proper communication is a complex and nuanced process requiring sequenced, timely and thoughtful execution, not only to communicate the change itself, but also the purpose and timing of that change and how it will affect each individual.
  • Learning and development. Most large companies have a learning and development operation. Whenever we work with an organization on change management, we partner with these existing resources to develop materials and training curricula to bridge gaps in skill sets.
  • Right metrics. Whether the goal is achieving a lower unit cost, a lower headcount, or a shorter order-to-cash cycle, it is important to define what constitutes success from a human resources perspective. These metrics need to be established up front. It is often instructive to benchmark against peers.

Many companies have a change management infrastructure and change management templates available, whether that is defined as a project management office, a change management office, or is known by some other designation. In addition, it is not uncommon to retain outside consultants specializing in business performance improvement (BPI) to coordinate large projects. BPI specialists can be especially helpful when it comes to defining roles in a change enablement team.

Key roles in a change enablement team include:

  • Change agent – This person handles the largest share of responsibility, including answering the question of why transformation is needed; overseeing the work of the change champions, communications coordinator and training coordinator; and reviewing the metrics provided by the metrics monitor to ensure that the transformation is on track to achieve the desired future state.
  • Change champions – While many roles in a transformation can be outsourced, change champions must come from within the organization. These are not necessarily the project leaders but, rather, strong individuals and influencers who work with people on the front lines to implement and institutionalize change.
  • Communications coordinator – Communication is critical to managing the human element of any transformation. The communications coordinator needs to be adept at articulating process and organizational changes, the reasons for those changes, roles and responsibilities, timelines and training schedules. More than simply conveying information, it is the role of the communications coordinator to instill in the affected employees the desire and commitment to embrace change.
  • Training coordinator – A training coordinator is responsible for bridging skills gaps by developing learning tools and ensuring that employees are capable of doing the work required, in the ways required by the transformation.
  • Metrics monitor – Once metrics have been identified (in the beginning of the project), it is important to assign someone to collect relevant data and report on outcomes. These measurements (including benchmarks) need to be measured throughout the project to track the progress of change adoption.

For companies that are just now setting their transformation structures in place, the good news is that these structures are portable. While our focus here is on the finance department, the same basic principles apply across the organization. Transformation can take a lot of forms – from complex core financial system modernizations to the deployment of robotic process automation to improve business performance and improve analytics, controls and reporting. The people-focused principles outlined here can help drive the transformation in all of these areas.

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1 comment

  • What about when the project leader is where your resistence lies? I’ve seen too many cases where the “Change Champion” is a passionate individual who is charged with “influencing without authority” and in every case, the change effort fails. This is one of the principles I believe Kotter gets right in “Leading Change” – he says the guiding coalition (or Change Champions in today’s venacular) needs to have “enough power to lead change”. I believe we need to stop expecting people with influence to change how we work when our leaders aren’t creating the urgency for change themselves.