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The art of change management for finance and accounting teams

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The art of change management for finance and accounting teams 1

By Magali Michael, Director at Yooz

The Covid-19 crisis has had a dual impact on businesses across the world.

On one hand, existing projects such as remote working and new forms of teamwork were forced to accelerate. On the other hand, it highlighted some of the downsides of not moving forward with change, including losing customers and experiencing heightened competitive pressure.

Digital transformation has become an inescapable reality, but for the better. As American investor Warren Buffet once said, “Only when the tide goes out do you discover who’s been swimming naked.”

2020 has forced digital transformation within almost all business functions, including finance departments that have lagged somewhat on digital initiatives, tending to focus more generally on marketing and the client experience.

According to Gartner, the health crisis has motivated almost 70% of board directors to accelerate their digital transformation strategies.

In finance and accounting, communication and teamwork (44%) and technology and infrastructure (31%) are among the main challenges according to a Blackline survey.  More than eight out of ten professionals also expect to see faster digital adoption as a side-effect of the crisis.

The reality of digital transformation is far more complicated. There are as many different digital transformations as there are companies, with widely diverse contexts, strategies, constraints, and complexities found within each organization.

However, three key words are commonly found in any digital strategy: technology, organisational, and human.

Three pillars of digital transformation

Each common feature has its own levels of complexity and unique challenges. It is therefore necessary to combine several facets, ranging from the easiest (technology can be brought into a company) to the less easy (existing organizations need to evolve) and arguably the most difficult (integrating human factors).

By definition, people’s behaviour varies. Uses, corporate culture, and corporate values must adapt constantly, so change management concerning people is very clearly a key piece of the puzzle.

Still, it is a difficult mission because the transversal aspects required for digital transformation directly confront people’s individualism. Change can cause anxiety and worry regarding employment, skills, and collaboration methods – think back to the histeria around AI taking people’s jobs.

Companies that experience the greatest difficulties carrying out their digital transformation are those that consider digital transformation above all to be a technology project that people will follow.

McKinsey has observed that 70% of companies fail to reach their objectives, while Forrester puts it at around 60%.

Based on the three key principles, we can predict that the success of a digital transformation process is only 10% based on technology tools, 40% based on organizational adaptation and 50% on effective change management.

In other words, professional expertise and soft skills (non-technical skills related to how people work) weigh heavily in the functional richness of a given technology solution, however high-performance the solution may be.

American economist Gary Hamel provides a good summary of the pitfalls facing companies when it comes  to change:

“Today’s organizations were simply never designed to change proactively and deeply—they were built for discipline and efficiency, enforced through hierarchy and routinization.” 

The majority of organisations could not efficiently adapt to external shocks that force rapid change, such as a serious and sudden global health crisis, as change is considered in most companies as a simple interruption of the status quo, often imposed by upper management.

In order of importance, analysts at Gartner identified five barriers blocking change: risk aversion, poor management quality, directors’ approach, lack of commitment by employees, and employees’ lack of trust in the overall vision.

How can businesses receive ‘quick wins’?

The first step is to avoid underestimating the challenge. Be aware of the problem, particularly regarding an approach overly focused on technology to the detriment of usage, cultural issues, and human factors.

It is also important to question why digital transformation is not generating the expected results. Failure to succeed may be related to the specifics of both corporate culture and individuals, with their values and beliefs, and these aspects must be identified to distinguish those that pose a problem from those that are likely to boost the process in the right direction.

As Edgar Shein, professor of management at MIT, put it: “Culture is the primary source of resistance to change. It is therefore necessary to focus simultaneously on the environment, beliefs, and behaviors.”

The next principle is to set a clear direction to avoid improvisation and leverage existing features and available resources. This involves knowing how to find benefit in the unexpected, which can be used as a strength instead of a constraint.

The third principle is that it is wise to take on work projects that allow rapid deployment, while generating strong visibility, immediate benefits, and driving behaviors and practices forward.

For example, in the finance function, that is exactly what happens with accounts payable (AP) automation, which combines low levels of investment in terms of time and budget, especially when using Software-as-a-Service.

AP Automation brings maximum exposure concerning many processes with solutions that are simple to deploy. User satisfaction rises thanks to the elimination of time-consuming tasks, coupled with better understanding of daily gains.

Change is also generally more welcomed and accepted with this approach, as it reduces concern within the business and presents the transformation in a positive light – notably by saying goodbye to time-consuming and demotivating tasks with little added value while encouraging people to step safely outside their comfort zone.

All-in-all, management consultant Tom Peters  summarizes the stakes of change management perfectly: “Change is about recruiting allies and working each other up to have the nerve to try the next experiment.”

Change comes from within

There’s no doubt that digital transformation is a hugely complex task for businesses and finance departments, but by having a clear vision for the end-stage and implementing gradually after strategic planning will help get every member of your team moving in the same direction.

However, there must always be room for flexibility. To view digital transformation as a success, employees have to embrace change, so make sure that everyone in the company is on board to keep moving in the right direction.

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Can a leader’s level of enthusiasm and optimism really impact the bottom line?

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Can a leader’s level of enthusiasm and optimism really impact the bottom line? 2

By Mark E. Brouker, Captain, United States Navy, founder of Brouker Leadership Solutions

Can a leader’s level of enthusiasm and optimism really impact the bottom line? We hear of the leader’s ability to influence others in powerful ways in politics, academia, sports, among other areas. However, in business, profitability is where the rubber meets the road.  How impactful is the leader’s level of enthusiasm and optimism in creating a healthy bottom line?

One of the truly remarkable and rewarding tours of duty I had during my Navy career was with a small group of highly motivated doctors and pharmacists from all three services – Army, Navy, and Air Force. These professionals were all hand-picked to join a newly-formed team which was directed to reduce the escalating cost of prescription medications provided for all Department of Defense (DoD) active duty (Army, Navy and Air Force) and family members. Our task was made more challenging because we were to reduce costs without decreasing quality of care. At that time, there were over eight million men, women, and children eligible for prescription medications throughout DoD. The annual cost was over five billion dollars and climbing fast.

Our boss, Dan, was a brilliant, hard-working, and extremely passionate leader who was highly respected by all. Dan cared for us and we cared for him. We were a tight group. We treated each other as family. Dan’s passion was contagious, and he quickly established a culture of caring, hard work and trust. We were poised for success. Because I was senior to other members of the team, Dan selected me to be his deputy.

The idea of creating a small team to bend the cost curve for the entire DoD pharmacy benefit was novel – it had never been tried before. While the team shared a genuine passion for this noble and ambitious undertaking, early wins were few and far between.

After the 6-month honeymoon period ended, enthusiasm was slowly replaced with frustration.  Every morning we’d meet with Dan to share the progress or, more accurately, lack of progress with our respective projects. It was slow and insidious at first, but sarcasm, frustration and pessimism crept into the meetings. A few of the more vocal naysayers would spew their negative venom and Dan and I would make meager attempts to mitigate the damage, or in times of weakness simply join in. These meetings frequently went much longer than scheduled, drained everyone of energy, and were generally recognized to be a waste of time. In short, neither Dan nor I led these meetings. We attended them. One could feel the energy, passion and trust dissipate like air leaking from a balloon.

Mark E. Brouker

Mark E. Brouker

It was clear that Dan and I needed to change our attitudes. We candidly discussed the culture of pessimism that we were creating and, more importantly, how it was sucking trust and the creative juices from the team. Over a handshake, we agreed to help each other curb our negativity and celebrate small victories that were indeed happening. We’d address the challenges, but not mire in them. We agreed to not let anyone hijack the meeting with their negativity.

We were more careful in the words we chose – we rid ourselves of cynical remarks. We were careful with our body language. No scowling or worried looks. Above all, we focused on staying positive. We’d invest a few minutes before meetings to reflect on past successes, however minor, and mention them at the beginning of the meeting. We’d then address the challenges, and close each meeting with a reminder, once again, of past successes.

Frustration and pessimism were slowly replaced with enthusiasm and optimism. Wins starting coming. More wins followed. Within 2 years, our small team was saving DoD over $100 million annually with no reduction in quality. Our small team was recognized within the industry as a center of excellence. Our success was nothing less than stunning.

How did this happen? It turns out that Dan’s and my behaviors had a much more profound impact on our team members than we could have ever imagined. In fact, studies have shown that the leader’s level of enthusiasm and optimism directly impacts their team members level of enthusiasm and optimism. Why is this the case? A study by Gallup found that employees who are supervised by highly enthusiastic leaders are 59 percent more likely to be enthusiastic than those supervised by unenthusiastic leaders.[1] In other words, the leader’s behaviors, in this case optimism and enthusiasm, are contagious. Further, studies have indeed shown that businesses led by enthusiastic and optimistic leaders were significantly more profitable than those led by apathetic and pessimistic leaders. [2] [3]

Can a leader’s level of enthusiasm and optimism really impact the bottom line? Unquestionably the answer is yes. The leader’s ability to influence in politics, academia, sports and yes, profitability in business, is profound. Those businesses led by leaders who understand, respect, and embrace the strong correlation between the leader’s level of enthusiasm and optimism as it relates to performance and profits – and most importantly practice these behaviors – are at a distinct competitive advantage.

Be a great leader – lead with enthusiasm and optimism.

Mark E. Brouker, Captain, United States Navy (retired), Pharm.D., MBA, FACHE, BCPS, is founder of Brouker Leadership Solutions, and author of Lessons From The Navy: How To Earn Trust, Lead Teams, And Achieve Organizational Excellence. For more information visit http://www.broukerleadershipsolutions.com/.

[1] Gallup, “State of the American Workplace, 2017.” Accessed February 12,2020.

[2] Michael Bush, A Great Place to Work for All (Oakland, CA: Berrett-Koehler, 2018), 26

[3] Marcus Buckingham, First, Break All the Rules (New York, NY: Simon and Schuster, 1999), 40

 

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JPMorgan to launch UK consumer bank within months

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JPMorgan to launch UK consumer bank within months 3

LONDON (Reuters) – JPMorgan Chase & Co will launch a digital consumer bank in Britain under its Chase brand within months, the U.S. banking giant said on Wednesday.

The bank said the new business had already recruited 400 people and would offer a range of products, including current accounts.

The UK venture will be led by Sanoke Viswanathan, who has been named chief executive. Viswanathan was previously chief administrative officer for JPMorgan’s corporate and investment bank.

The digital bank will be headquartered in London’s Canary Wharf financial district, with customers supported from a new call centre in Edinburgh.

Reports about a likely tilt by JPMorgan at the UK consumer market have been circulating for around a year, but the bank had publicly disclosed few details.

“The UK has a vibrant and highly competitive consumer banking marketplace, which is why we’ve designed the bank from scratch to specifically meet the needs of customers here,” said Gordon Smith, CEO of consumer and community banking for JPMorgan.

(Reporting by Iain Withers; Editing by Jan Harvey)

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European regulator clears Boeing 737 MAX airliner for return to service

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European regulator clears Boeing 737 MAX airliner for return to service 4

(Reuters) – Boeing Co’s modified 737 MAX airliner is safe to return to service in Europe, the European Union Aviation Safety Agency (EASA) said on Wednesday, lifting a 22-month flight ban after two crashes of the jet which caused 346 deaths.

EASA Executive Director Patrick Ky said it had “every confidence” that the plane was safe following an independent European review of changes ranging from cockpit software to maintenance checks and pilot training.

“Let me be quite clear that this journey does not end here,” Ky said in a statement.

“We have every confidence that the aircraft is safe, which is the precondition for giving our approval. But we will continue to monitor 737 MAX operations closely as the aircraft resumes service.”

Regulators around the world grounded the MAX in March 2019, after the crash of an Ethiopian Airlines jet five months after one flown by Indonesia’s Lion Air plunged into the Java Sea. A total of 346 passengers and crew members were killed in the two crashes.

The United States lifted its ban in November, followed by Brazil and Canada. China, which was first to ban the plane after the second crash, and which represents a quarter of MAX sales, has not said when it will act.

Relatives of some crash victims have strongly criticised the move the clear Boeing’s best-selling airplane.

EASA represents 31 mainly EU nations, excluding Britain which formally left the bloc this month. Britain is expected to issue its own separate approval on Wednesday.

(Reporting by Sudip Kar-Gupta, Rachit Vats; editing by Jason Neely)

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