Digital First means People First.
“The next big thing isn’t Artificial Intelligence. It’s people.” said Xero’s co-founder, Gary Turner. Hmm, we’ve heard this before, “people are our biggest asset”, as so many CEOs say, but this type of people focus isn’t about selling your company’s human capital asset.
If the aim is to accelerate your digital capability, whether it is the automation of reporting and forecasting, automation of processes or other digital and data projects, we have to start with people, and specifically, behaviour change.
And we need to help individuals and look at how we must help them change their approach to learning and working if we are to see a sustainable change in behaviour and use of technology.
If I asked you do you want to make the digital change, do you want to stop the month-end fear, you are likely to say a big “yes”, if I asked you are you OK to change, there may be a hesitation. You may ask how, when do I have time, what do I need to do? And if I asked you to lead this change, most people would shudder at the task. So we need to break it down and have a plan.
So what next? Since the pandemic and a shift to remote working, we have seen a forced change to online communication tools and collaboration tools, but what do we do next to capture and accelerate the digital finance function? After we have worked out how to effective remote and distanced working we can start the shift.
With reference to the recent Mckinsey report, “From lines and silos to networks and teamwork” we have three things to do;
Traditional organisational hierarchies don’t work here
When the pandemic hit, did you defer the boss, or did you start making a change? Proactivity and teamwork is essential to accelerate the digital change, as the report states, “Operating with a defined mission, a sense of urgency, and only the necessary personnel at the table, people set aside the turf battles and moved quickly to solve problems, relying on expertise rather than rank.”
I suggest you create this dynamic by building a community of people that want to make a change, and that include a real mix of people which includes other business teams and your Generation Z employees.
Lock in practices that speed up decision making and execution
Crisis management isn’t sustainable. Sustainable change is about going together, make optimal changes and scaling what works. Breaking down learning into small chunks and moving decisively as people learn.
This could be using a visualisation tool for your general ledger reporting, then quickly moving to other business data, external data and then pushing your new cloud analytics to all stakeholders for them to play with too.
The trick is to put in a process that allows you to capture ideas and move them to act as fast as possible. Push the change forward, testing and learning as you go. And the benefits are clear, as the report states, “During and after the 2008 financial crisis, companies that were in the top fifth in performance were about 20 percentage points ahead of their peers. Eight years later, their lead had grown to 150 percentage points. The lesson: those who move earlier, faster, and more decisively do best.”
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Accelerate the transition to agility
So you have the people ready, and ideas and project decision are being made, but you need to execute quickly too. And this is where bring together classic finance functions and the digital finance function and its agile practices will pay dividends.
McKinsey defines Agility as, “the ability to reconfigure strategy, structure, processes, people, and technology quickly toward value-creating and value-protecting opportunities. Agile companies are more decentralized and depend less on top-down, command-and-control decision making.”
This allows for faster execution, but it does require a change at the top as well as the bottom and for leaders to enable agile teams to work freely. Learning what is possible and who to manage the new team is as important as the hard skills you are looking to recruit.
One example cited by McKinsey was a financial data company that saw its classic revenues were losing their value as COVID-19 deepened, so “it formed a small team to define company priorities and come up with new kinds of data, which it shared more often with its clients creating more revenue opportunities.”
The story illustrates the need for new ways of working and the need for empowerment and speed in the team, not at the top, even when the direction is unclear.
Change means changing
Finally, acceleration, agility and automation are just hype and theatre, if they aren’t grounded in the new ways of working, new learning, new talent.
Companies need to create or accelerate their digital finance function and their automation, analytics and app capabilities to provide the platform to build a wider digital transformation from.
And as important as mobilising these projects and the teams, leadership needs to allow them to ask the right questions to the business, to work differently and create a test and learn cycle that will deliver business value, not just a new tool (read further from McKinsey here).
The future of the finance function in simple terms is about two things; people change and technology adoption. Working out how to bring these two worlds together successfully is critical for our futures. As much as we see the software vendors hype and desire the change, it is people, like you, who will make the change, who will have the business problem they need to solve, who will learn and work collaboratively, then select, buy and use the tech, not the other way around.
So it is not about technology first, and if you don’t believe me, here is a tweet from the world’s prominent digital pioneer Elon Musk, “Excessive automation at Tesla was a mistake. To be precise, my mistake. Humans are underrated.”
Digital Finance Function, absolutely.
People first, always!
Miss Part 1? Read it here.
Authored by Christopher Argent, Founder of Generation CFO.
The finance professional’s community to network, work smarter and drive digital change. We provide insightful, platform-agnostic commentary and resources to help finance teams transform their businesses through the use of technology. Join to learn from your peers, validate decisions and achieve digital transformation. Founded by Christopher Argent in 2009 he wanted to help CFOs and the finance function modernise with digital tools and a digital mindset. With his 25 years as CFO and BI, EPM and Analytics Programmes, he is on a mission to make finance transformation common practice.