One of the top two leadership development challenges in the next two to five years is dealing with rapid organisational change. As finance chiefs seek to fuel innovation through data-led insight, superior analysis and effective collaboration, they are facing new heights of accountability and shareholder expectation. Navigating this complex, dynamic business environment requires a well informed and forward thinking approach to leadership and decision making.
Change leadership alongside change management
Change is a given and a top priority across all types of organisations, but according to the Centre for Creative Leadership, studies consistently show between 50 and 70 per cent of planned change efforts fail. It doesn't help organisational ambitions if critical change is (at best) just as likely to fail as it is to succeed.
Many organisations can manage the operational and structural side of change, but give little effort to the people side of change. To gain the desired results from a new direction, system, or initiative, organisations need the benefit of change leadership along with change management.
Change leadership is about the phases of change - and the emotions associated with those
phases - that people must navigate when change is constant. Change leadership requires CFOs, and the organisation as a whole, to address beliefs and mindsets and to develop the practices and behaviours that help people adapt to change.
In contrast to change management - which is an outside-in process with a focus on putting in place the right structures, systems and processes - change leadership is the inside-out element of meeting the change challenge. It's about enlisting people in change and keeping them committed throughout, in the face of uncertainties, fears, and distractions.
Finance learning to lead change
The new CFO must be the agitator of financial performance - not simply the custodian of the bottom line, but an active change agent and leader of top line growth, able to challenge and coach executives throughout the business. CFOs are being asked to step up to this broader role because companies are facing unprecedented expectations from shareholders on growth and financial performance - just as their global operations become more dispersed, and strategy execution becomes more complex. So, while deep financial expertise will remain a non-negotiable, finance leaders must also be adept at mastering complexity, nurturing curiosity and unleashing innovation - in themselves, their teams and the business as a whole.
This means that CFOs must cultivate a broader appreciation of business issues and sharper antennae on what's happening in the world around them. In addition to seeking roles in operations and other functions, one way to do this is to devote regular time to speaking to leaders and innovators from outside their industry or region (check out our Finance Summits below). And, in an era when technology is disrupting business models and creating dramatic new business opportunities, CFOs should also make sure they have leading-edge technologies in place that provide flexibility in enterprise performance management and business analytics, to foresee, plan and model anticipated change and scenarios.
In line with driving change leadership, the CFO will also need to be a great people leader, adept at engaging, challenging and motivating global teams and diverse business units. He or she will need to be skilled in identifying resistance to change and workloads using financial metrics to model new behaviours, highlight new trends, pinpoint new opportunities and ask difficult questions - all while adopting the role of coach and partner to other executives' performance. It is this capability that will position the CFO not just as the CEO's "eyes and ears", but also as their right hand.
Finance leaders can gain better results from strategic and operational change when they:
- Recognise the imperative to both lead change and manage change.
- Broaden their horizons beyond being the financial steward of process efficiency and controls to multi-functional expertise and a trusted advisor influencing enterprise strategy.
- Ensure they are supported by hardy decision making systems to provide real-time business advice with robust monitoring, planning, modeling, forecasting and analytics that can be adapted quickly.
- Communicate and invest in key managers to develop the mindsets, skill sets and tool sets to be effective leaders of change and guide others through emotional upheaval.
