~ by Nehal S
Executive Summary
The term “change management” is used quite a lot these days as companies try to scale fast without sacrificing on quality of services/products offered. In this article, we will discuss: what is change management? Why should finance and accounting be first in your thoughts when it comes to which change is necessary? And how does a CFO make this possible for your team?
What is Change Management?
The word is changing every second. Technology is helping us grow at an exponential rate. In terms of consumers, change translates into changed behaviors. For example, Gen Z are empowered with data from the internet as well as an understanding of the harm certain brands are having on the environment, and so they are extremely picky when it comes to purchasing as well as brand loyalty.
Change is all around us and organizations that do not evolve become extinct. As Darwinist as this sounds, it doesn’t take a lot of effort to see examples of well-known brands die in the matter of a few decades despite reaching heights of popularity – a great example is Kodak. Simply put, successful change management comes from being able to foresee trends and operationally prepare for these trends. The true success of change management depends on how well an eye is kept on data that is being generated across your financial and operational departments as well as agile decision making based on this data.
Data and Change Management
I am sure you’re wondering what does finance/accounting have to do with change management. The first step towards making any change is identifying the need for change. Your CFO will be the first person to look at your books and tell you that sales have slowed down in x customer segment or y region. The data that is gleaned from your books will signal a need for change. What that change will be depends on the problem. But the problem is often companies that go months and years without trying to understand what the problem is. A good CFO will be able to glean from the numbers what changes the company might have to make to stay relevant. The strongest teams appreciate this information and make departmental and organizational changes based on these suggestions.
The Role of the CFO
To ensure successful change management, the CFO will work with senior management to establish Key Performance Indicators (KPIs) along with the new goals. For example, if our goal is: we want to increase our sales in y region by z%, the KPIs that need to be monitored are: store revenue, number of customers who came to the store/site but didn’t purchase, and perhaps experimenting with price sensitivity. Your CFO can now start tracking not only these KPIs to paint a compelling picture of what exactly is happening but to also create systems to capture these data points.
What if your Company Can’t Afford a Full-Time CFO?
Fractional CFO services are starting to gain traction around the continent, which offer hourly, daily, weekly, and monthly CFO rates. The CFO should be matched with your company based on industry experience. If you are unable to afford a fractional-CFO, consider onboarding a fractional-finance manager. Some financial visibility is better than no visibility.
Work with Nehal S
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Illustrator: Lisa Williams (Instagram: @artist_llw)