Unleashing the Power of the Digital Finance Function

"The worst thing that can happen in any transformation is the suspicion that something's going on behind closed doors.”

The pressure is on for CFOs to unlock the potential of digital transformation in today’s modern age. 

But what’s in the way of progress, and how to hone the best strategy for overcoming barriers to transformation in finance?

Cédric Assaouloff, Lead Digital and Innovation R&D Pharma at Roche, Bernd Stangl, then CFO at Alcatel, and Mike Rose, Transformation Specialist in Data Sharing and Digital Transformation at FLIP Digital give their expert takes on identifying key blockers, and what’s needed to drive continuous digital disruption for the future of finance.

The making of a digital transformation mindset

When thinking about digital transformation, what comes to mind first?

If your answer is tech you might be starting in the wrong place, according to Rose: 

“People think of technology first because it's measurable. But actually quite a lot of transformation is about getting people to think differently and approach things differently. And that's much harder to measure. (...) We say culture first, people first, and it's actually trusting that is the right way to go even though you may not be able to measure it as easily as spend.”

Mistrust of digital transformation in finance is perhaps the biggest barrier to success according to Stangl: 

“I would say in my career of more than twenty years, I've never seen any tool that isn’t able to make the transformation. The problem isn’t the tools, it’s the mindset of the people.”

It seems people strategy is transformation strategy, and the primary focus must be on tackling the mental barriers to change.

If the last few years have taught us anything, it’s that sometimes it takes a crisis to challenge an “if it ain’t broke don’t fix it” mentality according to Stangl, who cites the Covid-19 pandemic as a prime case in point of a painful period in time that accelerated digital transformation in finance: 

“There needs to be an element of pain, an element of crisis, and maybe an element of frustration on an individual level in order to allow you to move into transformation.”

CFOs know all too well it’s no pain no gain when it comes to spearheading a new future in finance, but is crisis the only catalyst for change? 

“If there isn't a crisis, you have to convince people that transformation is still necessary,” says Rose. “Part of that convincing is that it has to come from all angles. You can't have just one team or one individual saying we need to change, it has to be a belief throughout an organisation.”

Assaouloff agrees, and says it’s as much about creating the right circumstances for enthusiastic finance transformation, as it is about challenging an attitude of reluctant acceptance: 

“I like to call out mindset, but also an embracing of the new culture (...) It's really important to create an environment which fosters cross functional and divisional collaboration and exchanging in terms of best practice, building awareness of the mindset we want to drive towards.”

It’s an approach that encourages transparency and open dialogue which is essential for getting employees on-side, says Rose: 

“Over communication is better than under communication. The worst thing that can happen in any transformation is the suspicion that something's going on behind closed doors.”

Turning doubters into digital transformation believers

So what can CFOs do to demonstrate good finance business partnering and turn detractors of digital transformation into advocates? For Assaouloff, show don’t tell is central to his approach:

“As a leader, my mission is about people and making sure no one is left behind (...) “I'm a strong believer in showing the value of what digital can bring to people and that's what I practise a lot. It takes a lot of energy, failure, and time, but the more you do so the more you’ll start to bring everyone on that journey.”

Demonstrating the value of digital is key to telling the story of transformation you want your business to get behind. Stengal refers to the example of repositioning forecasts at Alcatel from yearly to rolling forecasts for spring, summer, autumn and winter, in order to communicate key takeaways in tandem with the rate of technological change. 

Rose highlights this as an example of  small changes that can have a big impact when it comes to keeping people engaged in the finance transformation process: 

“A yearly forecast is going to be wrong within minutes. The point about the regular rolling forecasts, I think, is really important. Identify small changes that people can agree with and buy into and start to role model the transformation.”

Mapping the journey and showcasing small wins is essential to bring to life a longer-burn transformation, says Assaouloff :

“Start small, dream big, but don't go too big too soon and fail. Take small steps, and show value - that’s how you keep moving.”

Reframing failure in the role of CFO

One thing is clear: CFOs can’t drive digital finance transformation alone. 

Nowhere is this felt more keenly than when your peers at the top are resistant to your vision for change, says Stangl:

“Speaking as a CFO, if your CEO doesn’t have the same mindset, you really have to ask yourself if that's the right place for you. You cannot fight against the organisation and against your boss on this.”

Alongside an openness to agile transformation, Stangl believes your boss and leadership team must share an acceptance that the road to finance transformation might get rocky. Given the nature of finance functions to be subject to the scrutiny of audits and regulations, this might feel like unfamiliar territory, but Stangl reframes failure as a positive: 

“If the people around you can accept the course of failure, then you're in the right place. But when there are failures, don’t change the strategy, change the execution of the strategy.”

Rose agrees that a flexible approach to meeting agreed outcomes is the best way to ride out the ups and downs: “we need to adapt KPIs to measure the right things and not push us away from being able to accept failure.”

With the technology of transformation ready to propel digital finance functions to new heights, what’s left is the need to cement a culture of transformation to match, says Rose:

“There's no end point to the transformation implementation really, you might have a long tail in terms of investment. But if we're investing in transformation, we need to be investing in changing the culture permanently.”

Stangl leaves us with words of wisdom to live by for CFOs looking to lead the digital finance transformation charge:

“Be honest, be close to your people, and embrace the world of change.”

Author

Christopher Argent, Founder, GENCFO
GENCFO Team

Chris is the founder and MD of GenerationCFO.com and creator of the Digital Finance Function Model and a contributor to many articles on our platform. Chris focuses on the shift toward digital transformation in accounting and finance, shows you what good looks like, then helps to get you there!

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