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Why is change so dramatic for finance leaders & who’s at fault?

 

Change in the finance industry is a constant as markets, products, and regulations evolve. We all know that. Right?

However, change can be disruptive and challenging to manage for finance leaders. I bet 8 out of 10 leaders would agree with me on this. This is because they need to be able to navigate the changes quickly and efficiently to remain competitive, and hence it’s a complete transformation process, not a one-man change; it takes an army of manual and technical effort.

You change, systems change, core changes, teams change, and practically no human being can match the speed of light and be a master at accepting change as it is.

There will be hiccups.

But what other reasons make the change so dramatic for finance leaders? Who’s at fault?

Part of the difficulty with managing change lies with the organisations themselves—their internal processes, lack of communication and collaboration between departments, and difficulty measuring the success of new initiatives.

Organisations often have inadequate tools to track changes as they occur, making it hard for finance leaders to be fully aware of a change’s impact.

Organisations also need to invest in their people—in terms of training, resources, and technology. Without these investments, the potential for change is limited because of a lack of expertise and understanding. If companies don’t have the right people or staff adequately trained to handle changes, it can be difficult for finance leaders to make effective decisions.

Not to forget that external forces such as market shifts, political and technological changes, and global events can make it difficult to keep up with change.

Let me share an incident where one of my friends, who is also a CFO, got fired from his job as he was told: “You are not efficient enough to adapt to the growing technological changes, which is also keeping our company behind in numbers and progress”.

When he shared this terrible information with me, I sat down with him to understand why such an intelligent leader was pushed out—what could be the exact reasons?

We figured out that the CEO was right; there were no practical improvements, numbers were dipping, and indeed, they were falling behind, but that was not all because of my friend; the company lacked support for the team and technology.

So, if the right resources had been given to him and his team from the beginning, this problem could have been avoided. It wasn’t just his fault, but if you sent someone into war unarmed, how long would you survive? And I think that’s one more reason why leaders fear change.

Finance leaders need to be constantly aware of developments in their industry, trends that will affect their business, and regulations that could impact operations. However, without a structured system for monitoring such factors, even the most capable leaders can easily miss changes or not respond quickly enough.

Even McKinsey & Company quotes in a survey that over the past few years, the role of the CFO has evolved significantly, with a focus on digital activities. In fact, the number of finance leaders who report responsibility for their company’s digital initiatives has increased dramatically, more than tripling between 2016 and 2021.

Additionally, the importance of investor relations has skyrocketed, with almost two-thirds of CFOs reporting responsibility for these activities, up from 44 percent in 2016.

In conclusion,

Change in the finance industry can be difficult for leaders to manage. It is essential for organisations to invest in their people, resources, and technology, as well as provide adequate communication and collaboration between departments. By doing so, they can help ensure smooth transitions and a successful outcome.

With change comes opportunity, and with the right resources in place, finance leaders can capitalise on the potential of what’s to come.

However, as technology continues to evolve and expand, finance leaders must stay ahead of the curve and find innovative ways to manage their organisation’s changes.

By focusing on collaboration, investing in their people, and staying abreast of external developments, finance leaders can help ensure a successful transition and keep their company ahead of the game.

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