Can Finance Managers Lead Change?
by Stephanie Owen – Principal Consultant, Strategy2Life
Not long ago, a consulting client of mine – a seasoned, senior Finance Manager – confided in me that he’s anxious about having to lead his team through a major change that is being driven from the top. ”This change is the most important strategic initiative we’ve had in years. I have to prepare the team so that their performance levels are maintained during the change. Our guys have to help the rest of the business come to grips with the change too. There’s a lot at stake here - I can’t afford to drop the ball on this one. This ‘change management’ stuff is so hard for us finance guys – it’s so fluffy!”
Having worked with finance functions over most of the last 10 years, I know that he is far from alone in feeling daunted by the prospect of leading major organisational change. What is it about finance professionals that make it hard for us to “do” change management? And is there anything we can do to improve finance managers’ change leadership capability? I decided to explore this topic further. After all, the ability to lead change is becoming an increasingly important part of a finance professional’s skillset. A 2009 survey conducted by Aequalis Consulting and quoted in the CPA members’ journal In the Black (August 2009), suggests that soft skills are increasingly required of mid- to senior-level accountants. More importantly, successful change management is ultimately about maintaining the level of productivity and performance during a period of transition, or achieving business benefits planned at the start of an initiative - surely these are important concerns for any hard-headed finance person.
When I thought about why it is hard for finance managers to lead organisational change, 4 reasons came to mind -
1. Change is hard for most people, most of the time. There is an often-quoted statistic that 60% to 80% of corporate change initiatives fail. Anyone who has ever had to face significant lifestyle changes (eg losing weight, quitting smoking) knows that changing yourself is hard enough, let alone someone else. The need for change is often imposed by external parties – the CEO, regulators, the competitive environment – and so the change is not always welcomed. Even if the change is a positive one when seen with rational eyes, there is pain involved in transitioning to the unknown.
2. Finance professionals are used to being recognised as experts. If Finance changed the business case guidelines, or a funding policy, or the budgeting process – generally there is little choice for others but to fall in line. When Finance is leading changes that impact people more broadly and emotionally, there is more likelihood of resistance. I have even seen experienced finance managers mistaken silence or agreement for commitment – they have simply not had much experience recognising or dealing with resistance.
3. Change managers and the field of change management use language and concepts that finance professionals find hard to relate to. To most finance people accustomed to numbers, models, standards and rules, the language of psychology and HR (which underpin much of the change management field) seems vague and theoretical. Change management, as a management discipline, is still relatively young (compared to, say, accounting or project management), therefore its language, tools, and even the qualifications of its practitioners are still evolving. All this only serves to confuse finance people even more.
4. Finance professionals often focus too much on the cost side of change management activities. Let’s face it – someone has to watch the dollars in the organisation, and that’s usually the finance folk. Because reactions of people and groups are difficult to predict and impossible to control, the outcomes of change management can seem too intangible. It is not surprising, then, that change management activities are first to be cut when the budget squeeze is on.
If you are a finance manager, what can you do to improve your change leadership capability? After all, it could mean the difference between failure and the achievement of forecast business benefits. In today’s organisational climate, successful change leadership could even lead to the corner office. So, here are some suggestions:
1. Recognising the need for change management is half the battle. Learn to distinguish between a “routine” change which is uncontroversial, and a “radical” change. The latter is likely to cause strong emotional reactions, impact personal performance and productivity, and rank-and-file support for the initiative is typically crucial to its success.
2. Learn to accept change through developing resilience, and coach your staff to do the same. Not surprisingly, you would be more likely to lead a change successfully if you yourself agree with the proposed change or can at least accept it. Research has shown that employees’ attitude to change is most influenced by their immediate managers. The better you cope with change, therefore, the more likely those who report to you will cope well also. Improving resilience may be one way to improve your ability to accept change. I was inspired by a recent Harvard Business Review article on dealing with adversity through improving resilience ( “How to Bounce Back from Adversity”
by Joshua D. Margolis and Paul G. Stoltz, HBR Jan-Feb 2010). In some ways, unwelcome change is a form of adversity. The article suggests that you can develop the ability to look beyond the unwelcome elements of change, and instead focus on how best to position oneself and act today to make the most of the situation.
3. Prioritise the development of change management skills in yourself and your staff. At the risk of being obvious, learning from other leaders of change, whether they are within your organisation or external consultants, and getting the appropriate coaching or training, help you make sense of an unfamiliar discipline. The best people to help you on the journey will be those who are willing to travel beside you to help you learn, not just do it for you.
4. Use your influence to improve your organisation’s change management capabilities. Finance managers are often called upon to act as steering committee members (or chair), or are often involved in reviewing and approving business cases for change initiatives. If you can ensure that initiatives in your organisation incorporate the appropriate focus and attention on change management, then you will have improved your organisation’s overall change management capability and make it easier to introduce other changes – such as the ones you lead.
Change management is still relatively new as a management discipline. Its growing importance in recent years is a reflection of both the increasing pace and complexity of organisational change. Finance managers are increasingly called upon to lead change, which challenges finance professionals to acquire some unfamiliar skillsets and perspectives. Finance professionals who succeed as change leaders are likely to be rewarded with improved staff performance, achievement of planned benefits from change initiatives – and emergence as respected leaders in today’s organisations.
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