E xc e r p t e d fro m
Reinventing the CFO:
How Financial Managers Can Transform Their Roles and Add Greater Value
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This chapter was originally published as chapter 7 of Reinventing the CFO:
How Financial Managers Can Transform Their Roles and Add Greater Value, copyright 2006 Jeremy Hope.
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The CFO as
Changing something implies not just learning something new but unlearning something that is already there and possibly in the way. What most learning theories and models overlook are the dynamics of unlearning, of overcoming resistance to change. They assume that if you can just get a clear enough vision of a positive future, this is motivation enough to get new learning started.
—Edgar Schein, The Corporate Culture Survival Guide
transforming the ﬁnance operation and performance management practices is invariably the responsibility of the ﬁnance team led by the CFO.
Though there are many books on the art of change management as well as consultants peddling panaceas, it is not an easy path to follow. Parachuting best practices from one organization into another is not easy, nor is it usually effective. How effective change is implemented varies from one organization to the next.
HE ROLE OF
2 reinventing the cfo
For instance, some want a consultant’s report to rubber stamp in the boardroom while others prefer to go it alone and learn as they go. The context for change also varies signiﬁcantly. For example, there are more constraints in the public than private sectors, and private companies can usually move faster than public companies
(with fewer stakeholders to convince).
The change management formula we discussed brieﬂy in the introduction serves as a reliable guide to the prospects of success.
It makes the point that successful change is the outcome of three factors: D ǂ V ǂ F > R (where D = dissatisfaction, V = vision, F = first steps, and R = resistance to change) and that all the ﬁrst three variables must be in evidence in sufﬁcient strength to overcome the resistance to change.
This chapter will look at this transformation journey through the prism of actual practice. It will draw on the experiences of a number of organizations, including the World Bank, Tomkins,
American Express, Unilever, and others. It also sets out some milestones to look out for. It will suggest that the CFO needs to:
• Make a compelling case for change
• Set some directional goals and get started
• Gain the support of key people
• Involve operating people in the change process
• Avoid more complexity
• Show some early wins
• Be patient but maintain the momentum
Make a Compelling Case for Change
The case for transforming ﬁnance begins within the ﬁnance operation itself and extends to its business partners. Let’s start with ﬁnance. How many of your team have worked overtime in the
The CFO as Champion of Change 3
past three months? How many