Transformation in business is rarely easy or straightforward. It is, however, often necessary for the survival or growth of a business and you will search far and wide to find a multinational today that is not undergoing Transformation in some way. According to McKinsey, the reported failure rate of large-scale change programmes has hovered around 70% over many years. So how do businesses actually complete the successful Transformations they set out to achieve?
As Peter Bendor-Samuel, CEO of Everest Group states, “Achieving a breakthrough performance is a complex process and involves more than technology changes. It requires that an organisation make vision changes, policy changes and process changes.”
Focusing on the role of Finance in Transformation, fdu has been involved in several Finance Transformation situations, with the Finance function always playing a critical part in the overall business Transformation success. There are three aspects which remain consistently crucial to the overall successful outcome:
1. Recognition of the imperative to change
The best predictor of a successful Transformation is the CEO’s and Board’s recognition that a new approach is vital. After taking a hard look at current processes, the decision that change is necessary precedes any significant and successful Transformation. Smaller, project-based Transformations can succeed without complete company buy-in, but large-scale Transformation programmes require the understanding of the need for change from the top down.
2. Full understanding of strategic purpose and direction
The starting point for any Finance Transformation is to agree upon what is right for the company, and therefore what the desired outcome of the Transformation will be. Understanding the long-term goals and the needs of the business, then setting change targets within Finance as elements of reaching those goals, underpins the path to Transformation. From this point the optimum operating model will become clear, ready for initial implementation.
3. Clear communications to maintain momentum
The Transformation process must be rigorously managed with clear and consistent communication, action and responsibility regarded as paramount. Clearly defined roles need to be assigned, and both internal and external audiences should be aware of the call to action and be informed of strategic aims as well as progress being made to counter potential passive aggressive behaviour or wider resistance to change. Without buy-in from all important stakeholders, progress is hampered, momentum is lost and Transformation can grind to a halt.
These three aspects remain the same, no matter what sector Transformation is taking place in. fdu has considerable experience in Transformation across various sectors, including:
- Supporting the Business Partnering elements of a Group level Finance team within a renowned global £20bn Pharmaceutical Manufacturing, Wholesale and Distribution company.
- Supporting a wave of talent change in the Finance team for a £2bn multi-site Leisure and Healthcare Brand.
- Supporting the change within the International Finance team of a $1bn multi-national Professional Services organisation.
- Supporting a global Canadian listed Consultancy with the first phases of change in Finance in the UK and EMEA region.
All Transformation is by its nature a huge undertaking. At fdu we have found that as difficult as the process might seem at times, getting the right people involved and placed in the positions that will effect change is a solid driver of success. We want you to be a part of the 30% that have enjoyed successful change programmes – don’t you?