CFOs agree that introducing change, managing it and steering a business towards profitability and continuity in uncertain times, tests their mettle as leaders and change agents.
The role of the CFO has been changing over a period of time. However, in the high seas of turbulence and new realities, CFOs need to always wear their thinking caps and steer the rudder. The pandemic has necessitated a new way of work, but to usher it into the organization and ensure that it survives and thrives, the CFO needs to approach things in a more granular and systematic manner to look at change as the storm approaches the shore.
Setting Priorities
The first step to adopting change is gain a perspective of it. Speaking at CFO roundtable, GN Gauba, CFO of Motherson Sumi Systems explains that the first task is to rank priorities.
He explains that the first step to adopting change is to gain a perspective of it. Speaking at a BW CFO Roundtable, GN Gauba, CFO of Motherson Sumi Systems Ltd. explains that the first task is to rank priorities when pandemic / lockdown began.
He explains, “I would say let’s divide the priorities – the first priority was to protect people, plants and society as a whole because it was not a private problem. Thus, we educated our people on how to remain in a safe environment and not venture, by going to their villages or anywhere else.” Gauba explains how educating people requires engaging them- something one can’t do before assuring people their salaries and then see how to best utilize their time for training to create a roadmap for improvement activities.
He further continued, “The second was society. We built certain wiring harnesses and metal parts which were going to emergency vehicles. We also set up a plant within so that we could build and support a part of the ventilator assembly.” The third was to prepare ourselves for the restart of the operations once the unlocking began.”
Human connections have emerged as a top priority for many CFOs, yet the role is not traditionally accounted for its inherent humanity. An important part of engaging employees is to allay fears in times of uncertainties. Commenting on manpower management, Ajay Goel, Group Deputy CFO of Vedanta adds, “It is important that we must grow our way out of the crisis, not cut our way out of the crisis. In case one is investing in terms of brand or marketing or people, CFOs have to find ways to not cut out people.”
Looking at the broad picture
Technology has emerged as the silent allay to tide over and make operations agile. Along with the heightened risk, the disruption of technology has afforded significant change to business operations.
Speaking on areas which he perceives can benefit from technology, Goel explains, “Treasury Operations can be absolutely digital, collecting payments and issuing bank guarantees can be done remotely. I would also think about the proliferation of messages in terms of brand building using social media. Right now, we have more than 3 billion active users on social media and it’s important for brands to be relevant and contextual for the many generations on social media.”
Speaking from a technology leader’s perspective, Ramit Gupta, Partner, Managed Services, IBM, India & South Asia notes that the conversations around technology have changed too. “The conversation we have with CFOs has been to plan for a virtual enterprise beyond the cognitive enterprise, which is AI and ML based” He further adds, “What we are now beginning to see is a plan for an organization where you don’t have scores of officers but thousands of offices because you’re working from our own offices in a way and doing that in a manner where everybody is still connected and that will remain connected in the future. Here, what we call as ‘the intelligent workflow’ becomes the heart of the organization and that is available on a cloud because it has to be connected everywhere.”
On Outsourcing
One of the observations that emerged as a result of strict cost management is recognising areas that could be outsourced. Goel prescribes outsourcing of non-core for better focus and acceleration. Goel believes that now CFOs will be choosier and focussed, opening door for outsourcing operations that are rule-based, repeatable, transactional, and business agnostic. “And in the business, CFOs can focus on vital areas that are impactful and business contextual.” He surmises.
Managing Change
An important part of ushering change is its sustained management. Tracking global patterns of change in the role of the CFO Guaba believes, “Finance professionals are not only a gatekeeper today, but they are also a catalyst for the growth because we all have come to realize that without growth, it is like still water and still water stinks. So finance people too are not sitting in silos anymore.”
Giving a bird’s eye, Gupta explains how IBM through its history has tracked change from an intention to integrate different wings of the enterprise to enable them through technology and make their work sharable across domains. He explains that finance in particular is at the helm of it in setting up a operating model transition with common chart of accounts, common definitions of success and using analytics and exhaustive automation to glean insights. The step he adds is looking at a typical Enterprise Performance Management and elevating the roles of CFOs and the finance fraternity to the next level, where they are more like business support and business advisors/consultants in true sense.
He adds, “We have moved to the next part of the journey which we call as Finance Accelerate where we are taking what we are doing now a bit further. So instead of a finance analyst doing the accounting treatment of capital expenditure, revenue accounting etc. and then consolidating it at a region, country, brand level, where 60 to 80% of time was all spent in data accumulation, presenting the reports, we are now we are going to the next level where reports and dashboards are available and that’s helping them make the cut.”
Gauba advices that the way to introduce change, mange it and avoid resistance to change from becoming the proverbial pebble in the shoe, is to inspire a culture where benchmarking against regions/plants is not practised but rather people are measured against themselves and their past performance. “…Everybody in the world wants to do better than yesterday” he concludes.
Thus positively recognising individual efforts against their own, fosters not just a participative and collaborative culture but makes ‘change’ a word of learning and growing in the truest sense.