When your finance department reengineers its processes, it is important that employees are prepared for the changespoorly planned financial transformation programs hurt employee morale and production. To be successful, the CPAs in charge of quality improvements, such as controllers, must manage the human side of finance transformation constructively by gaining the support for change from both lower-level staff and upper management. This article explains how CPAs who sell the benefits of change will gain the employee support you need to implement more efficient finance and accounting methods.
Your role as project or team leader must encompass that of salesperson and spokesperson. Just because you have decided that your finance functions are outdated and need to be changed does not mean that others will immediately agree. Most employees will need your help to understand the benefits of process improvements. Finance transformation must be sold, not mandated.
It is best to begin by consolidating support among staffers who are not afraid of change and who believe that business as usual is no longer satisfactory. Dont waste your energy on naysayers. Your primary target should be an audience most apt to pass the message to others throughout your company.
KNOW YOUR AUDIENCE
The most successful change masters quickly learn to customize the message for greatest impact. To do this effectively, you must first understand the concerns and expectations of all your audiences, and you must devise a unique strategy for each. As you tailor your messages, adopt the following three-pronged approach:
- Be prepared to inform senior management of both the benefits and the costs of change. Specify cost reductions, return on investment and the impact on cash flow. Also, outline a few tempting quick fix improvement opportunities, such as instituting a procurement card and streamlining travel and expense policies. Rest your case on sound research and reasonable estimates of what can be achieved.
- Help middle managers focus on results. Show them how better processes enable higher production, cost savings and an enhanced role in the business.
- Quell the fears about job security and heightened performance expectations. Most employees are frustrated about the amount of paperwork they have, redundant management controls and other low-value tasks. Explain that these are the very problems your change program will eliminate, and discuss how more simplified processes free up time that can be dedicated to higher-value work such as proactive decision making and planning rather than historical reporting.
|Be prepared to spend 40% of your time selling change; the rest of your time should be spent on creating a vision of the new finance function and implementing change.|
PROVIDE INCENTIVES FOR CHANGE
For your finance transformation program to flourish, the whole organization must believe in change. You can help your employees understand the problems that exist by identifying the solutions.
Benchmarking is an essential first step in convincing employees that change is necessary. Benchmarking tells you where you stand in relation to other companies, regardless of industry, and objectively assesses the strengths and weaknesses of your organization. In addition, an unbiased, external measurement is invaluable for any company that wants to remove personal agendas, turf battles and finger-pointing from the change equation.
For companies that already have begun implementing process improvements, use a business case to reinforce or heighten top management demand and support for change. A business case should specify cost reductions, return on investment and changes to cash flow. It should make it easy for senior managers to approve your change program by identifying improvement opportunities and quantifying the benefits of change. At many companies, a properly conceived business case can tip the scales in favor of change. After all, not many CFOs will pass up the chance to save millions of dollars annually.
Build momentum throughout your company as employee commitment and support increase. Use benchmark results to hammer a stake in the ground for performance improvement and as a baseline from which to measure your progress on a monthly or weekly basis. Share results and good ideas, initiate cross-functional teams to foster companywide awareness of the benefits of change. Recognize successes and use mistakes as a chance to learn something new or to adjust your course of action.
Communicate frequently and at every stage of your change program, focusing on the benefits and mechanics of change. You can earn employees trust if you seek their input and act on what they contribute. This strengthens their sense of involvement and helps you identify threads of resistance. Employees may say that quality will drop, that the changes will cost too much or that their services are too unique to change. It is important to address all employee concerns equally and directly. For example, dont ignore or belittle employee anxiety about headcount reductionsdenial can feed the rumor mill. Try to help the employee translate his or her complaint into a suggestion for improvement.
Understand that change is difficult for nearly everyone. This is just one of the many reasons that sustainable change cannot be mandated and that communicationfrequent, open and two-wayis an absolutely essential ingredient in your change integration program.
Choose a communications style and delivery method to suit your corporate culture. Keep in mind that individuals absorb information in different ways: Some employees benefit most from informal meetings while others prefer memos, newsletters, management updates, e-mail or even video. Whatever your choices, you cannot communicate too often. Take the lead to ensure that your message is delivered accurately and appropriately, and emphasize the vision for your organizations future.
INVOLVE TOP MANAGEMENT
Many reengineering veterans would say that the most critical success factor in launching and sustaining a change program is top-management support. With it, you have a better chance of obtaining the right team members, the right amount of time and the appropriate funding. Take the initiative to present top management with a go or no go decision point at every major stage. This is the only way to keep your change program on track and moving forward. However, dont wait for management before you begin selling transformation, and dont expect senior management to sell the change program for you.
STAY FOCUSED AND FLEXIBLE
Remember to focus on what needs to change through each step of your transformation program. Dont get sidetracked from your goals. Write your goals down and refer to them as often as necessary. Be clear about where you are headed, but be willing to make mid-course corrections if necessary.
Selling is a time-consuming process that requires a lot of energy. Be prepared to spend up to 40% of your time on it. Use the other 60% to create a vision of the new finance function at your company and for implementing change.
When all is said and done, the effort that goes into selling change pays off. Remember that involving employees in the process is the best way to unlock the strengths of your human resources and ensure long-term success for your change program.
Christine A. Gattenio, CPA, is a vice-president of The Hackett Group, a management consulting firm in Hudson, Ohio, and directs its rapidly growing benchmarking business.
How to Handle the Naysayersby Greg Hackett
The formula is simple: 70% of people buy into good ideas, 10% never buy in and will fight you to the death and 20% hold the opinion of the last person they talked with. To accomplish a major change program you need 85% to 90% of the organization to accept the change. To do this, you have to keep those who hate your ideas away from those who love them, and you must spend a lot of time selling change.
Most people view a change program as a technical implementation. But programs dont fail for technical reasons, they fail for personal reasons. For example, there are individuals who do not like change, want something different or were not consulted for input early enough, and there are some people who are simply cranky sourpusses.
To implement change, you must confront the naysayers head on:
If you cant prove to someone that you are right, you must assume that you are wrong. You either are not taking into account something they find important, or are doing a lousy job of articulating your ideas. Also, constantly communicate with the 70% who have agreed with your change program. They will put pressure on the naysayers, as well, and prevent them from getting a larger following. While senior management may support you, they will not spend their political capital to sell the change program for you. Think of your chief responsibility as selling change, not implementing the technical aspects of the program.
Greg Hackett is the president of the Hackett Group.