Last week I wrote about how organizations have recognized that the Finance function can and should be playing a more strategic role within the company. Agreed. Sounds great – ALL finance professionals need to be more strategic. It’s hard to argue with that BUT what does it really mean? Many Finance organizations (and other Shared Service functions as well – IT, HR, Purchasing, etc.) have made huge investments in Best Practices (see below) to increase the value of their organization . . . .
. . . . . with promises of becoming a competitive advantage and achieving exceptional business results but even after Best Practices are Implemented, results have fallen far short of expectations:
- Results don’t go beyond “low hanging fruit”
- Focus on short term results – often at the expense of long term value creation
- Tactical demands overwhelm strategic initiatives
- Knowledge is leaking out of the organization
- People can’t apply the knowledge and skills they learned in training
- Every issue is an excuse to stop progress
- Metrics reinforce “the old way” of doing business
- Policies are inconsistently applied
- Investments in new technologies are not being utilized as planned
But why? Very simple – the content (people, process, technology) was changed but not the context or environment in which they operate. Let’s start with people since that is where I left off in my last blog. We say that we want our people to play a more strategic role BUT we don’t:
- Define the new role
- Outline the competencies (not just skills) required to play that new role
- Provide competency development programs (this is MUCH different than training) to close the competency gap
- Provide people the opportunity to apply (practice) the new competencies
- Clear the way internally for the organization to accept and embrace the new role (change management)
- Change the metrics under which people are measured to encourage the application of the new skills
- Have a hire-to retire talent management program that utilizes the defined competency model for recruiting, performance management, career development and succession planning in addition to competency development
I could go on and on . . . Most companies are OK at changing the content (“I sent my people to training. I don’t understand why their behavior has not changed”). It’s the context that is never changed and as the old saying goes “Context eats content all day, every day”. By the way, training should be considered an investment in your most critical asset – your employees. But unless that training is UTILIZED and behavior is changed then it is merely a cost with zero return. Here is the difference between Competency Development and Training.
So the next time a consultant tries to sell you an on-line certification program please run as fast as you can – it will not deliver sustainable competency.
Now let’s take a look at process. How many of you are in the middle of a corporate-wide LEAN initiative? If you are not, you are one of the few. We have been asked by many of our clients to help them figure out WHY they are not getting the VALUE that was promised from LEAN. Here are a few questions we ask:
- Our first question is always – how did you change the context (environment) to make LEAN successful?
- Is everyone on board and committed to make the new processes the new way of doing business or are they considered to be the “flavor of the month” (I wish I had even a penny for how often I hear that)
- How are you holding people accountable to ensure the new processes are being utilized?
- Has everyone been trained on the new processes? Have you provided a safe learning environment for employees to practice?
- Are executives demanding (and asking) your organization to use the new processes?
I’m going to stop here because I believe by now you have the point I am trying to make. Finance transformation is NEEDED but please understand that throwing new content at the problem without changing the context is a fool’s errand and I am sure you have figured out that changing the context is where the challenges lie. Believe it or not taking an organization through a transformation is the most rewarding thing I have ever done as a consultant. If you are considering moving your organization (Finance, Purchasing, IT, HR, etc.) to their next level of maturity give us a call and we can help you navigate through your journey.
Join in the conversation and let us know what you think . . . . . . . .