Home > Book Reviews > Discipline #7 – CFO as the Champion of Change

Discipline #7 – CFO as the Champion of Change

August 26th, 2009

            After covering the first six chapters of Jeremy Hope’s book, Reinventing the CFO, it’s time for the last chapter. As I previously mentioned, this is one of the books that you can continue referring back to for those subtle reminders since I believe his book somewhat transcends whatever “technical” changes may be happening on the Accounting and Finance front. In Hope’s final chapter he discusses the CFO as a Champion of Change.  This is probably the only point in the book where I tend to stray a bit from Hope’s view and believe the role of the CFO should extend further than what Hope suggests.

            Hope’s seventh chapter starts out “The role of transforming the finance operation…” and he then further discusses in detail the case for transforming finance. However, as we continue to see the role of the CFO expand and the CFO is expected to drive the financial results of the organization, it’s necessary for the CFO to be the Champion of Change, in partnership with a CEO or President, for the entire organization. Merely driving change in finance may result in improved reporting, clarity in results, or the establishment of standards, but change needs to be driven throughout the organization to achieve improved financial performance. This is also one of the most difficult challenges for the CFO since it will likely involve modifications, or sometimes entire shifts, in the company culture.

            Hope itemizes a list of suggested action items he believes will support the CFO in this mission:

§  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

            The other obvious point is the extent to which the CFO will drive change across the entire organization will depend on the size of the organization. You’re going to be much more hands on with a smaller entity, perhaps < $250 million, than in a larger, perhaps globally diverse operating entity. While I was involved in the planning, and directed significant changes during my time w/ MGE, those accomplishments were primarily focused within our North American operations. No doubt they were coordinated with our HQ in France, the efforts typically did not extend to our LAM or EMEA partners. Those changes, however, crossed over to R&D, Purchasing, Services, and deep within the Finance department. We made incredible changes over the 4-years and it meant maintaining effective communications with each one of those areas, having clear goals, communicating the progress of those goals, and knowing that we had completion windows that extended over Quarters, not weeks.

            For a smaller organization that has been set in its ways for many years, the change comes with more resistance and a slower rate. There needs to be a sensitivity to the change you are trying to implement and it’s likely that your need to communicate in such an environment may need to be more extensive. Many of my peers have commented in their blogs and twitter recently about the changing face of the CFO and this is one area that will demand that change. Change is the biggest challenge for the CFO, and without the proper approach and sensitivity, could result in a CFO starting their next search. You are the Champion of Change, but it’s your approach that will determine your success.

 

Thanks for reading . . . .

 

Jeffrey Ishmael

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