Six ways CFOs can increase the potential of transformation success

May 17, 2023

Adapting and transforming business activities during challenging times is vital. According to EY, progression and future success are more likely if CFOs can focus on six complex human-based factors. CFOs recognise from experience that successful transformation is challenging and requires their input. 

A recent study between EY and the University of Oxford Said Business School discovered that at least three-quarters of CFOs have experienced some form of transformation over the last five years, but many CFOs still fail to recognise that acceptance from other employees is critical in determining the progress of transformation. Research indicates that successful transformation leaders are more efficient at managing workplace stress and pressure, and by managing these six key factors, they increase the potential of transformation considerably. 

Key drivers of transformation success for CFOs

  1. Inspire: create a vision that is presented to all and represents a comprehensive explanation of ‘why’. Business leaders may not recognise the importance a vision can have in terms of inspiring others and creating a sense of purpose. The time and investment spent on delivering a vision can be lost. About half of the finance workforce affected by a successful transformation plan stated that didn’t clearly understand the leadership vision.

CFOs may not value the power of a shared purpose in inspiring teams. According to the study, CFOs must maintain the human aspect of transformation as a priority. Leaders need a good understanding of the future and its impact on individuals and groups. Generally, CFOs will consider program milestones and business goals rather than personal and individual targets. CFOs must invest in a plan that supports individual journeys to provide people with a sense of ownership, belonging and control of their positions.

2. Create an empathetic and authentic leadership plan that aligns with the finance vision. Successful transformation needs leaders to show courage and empathy, especially around workforce expectations and priorities. While clarity of the vision is important for gaining momentum, CFOs must demonstrate empathy, and show connections between the transformation vision and the benefits to the business and the workforce.

3. Purposely build an environment that supports the workforce and their roles. Successful transformation requires people to invest and commit to the journey. While leadership is vital, creating a transformation culture where everyone feels engaged in the journey is even more necessary. In the EY survey, 46% of finance leaders welcomed ideas from junior staff members, and only 31% of finance employees believes leaders listened to their ideas. CFOs must focus on the personal aspect of transformation and ensure people feel empowered and capable of voicing their opinions. With this in mind, CFOs must actively listen and respond to employee feedback.

4. Empower – delegate decisions and focus on delivering a culture of safety testing. Transformation journeys are not set in stone and can change depending on certain events. In the EY study, successful transformation leaders suggest that taking a step back or changing paths wasn’t necessarily a bad idea. Leaders must set expectations that can adapt when needed and communicate the changes transparently and as early as possible. Traditional finance functions on a basis that requires precision and working to specific metrics at particular intervals. This approach creates a culture of no surprises, which can at times, hinder innovation. The study suggests that finance leaders were more inclined to believe that failed testing would result in a negative impact on their careers, but as transformation becomes more regular, CFOs must encourage creativity and innovation that ensures their business is capable of adapting and learning. CFOs must create a safe environment, ensuring people feel welcome to experiment and test without negatively impacting their careers. 

5. Construct a way of showing how technology will deliver the financial vision. Blending technology with the necessary skills is critical in enabling transformation. Innovative technology is often a priority for finance leadership transformation plans. The study shows that 38% of CFOs identified technology and digital innovation as top priorities for accelerating transformation. That said, only 40% of senior finance leaders, including CFOs, determined technology as the top three challenges in delivering a successful transformation. 

6. Collaboration: create a plan for collaboration, and deliver new ways of working. While nearly half of the finance leaders believe processes were created to deliver collaboration within the business during transformation, only 31% of finance employees agreed with this. The gap here is critical when compared to other functions. It suggests the bigger challenge that finance professionals don’t feel that leaders are finding or valuing their efforts during the transformation. To increase success, EY research suggests that creating a space for new ways of thinking is essential. CFOs must segment siloed and hierarchical ways of working, and implement a multi-discipline approach that enables new perspectives and allows everyone to be involved in the transformation.

Transformation success will come from putting people at the forefront of new plans. CFOs have a holistic view of a business and are well-positioned to determine the tone of practices required for transformation. Today’s CFO must consciously focus on empowering people and lead with a vision with a ‘we’ not ‘me’ approach. 

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