A History Of Finance Transformation. Are We There Yet?

This article is co-written by Talita Ferreira and Anders Liu-Lindberg

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It feels like the finance function has been in constant transformation for ages. There might be something about that feeling, but we’re here to tell you that the transformation is not done.

While we continue to develop in the areas of more efficiently executing the transactions, extracting more insights from analytics, and better partnering with functions like Sales, Marketing and Operations there’s one thing we’ve forgotten.

In fact, it’s the most important ingredient in the recipe for creating a world-class finance function. Something that you’ll not see in any benchmarking studies or reports about what skills are needed in the future of finance. It’s the simple ingredient of LEADERSHIP.

Without transforming the way we lead the finance function, we will deliver subpar returns on the transformation. That’s because it takes another way of leading once people are the only thing that’s driving value creation in the function. Let’s explore that further. 

First a look at the history 

Before we discuss what must happen with leadership in the finance function let’s first align on how we got here. The transformation has roughly speaking gone through three stages.

1. First, we transformed Finance Operations by implementing new ERP systems and later offshoring or outsourcing transactional tasks to shared service centres.
2. Second, we implemented new BI tools on top of our ERP system for increased speed to insight. We then became more sophisticated in the way we analyse data also realising the power of Big Data and the need for making data-driven decisions.
3. Third, we looked around the function and asked ourselves what will the people that are left do? The answer was business partnering where we try to increase value creation in the company; by helping other functions make better decisions
4. Lastly, we must now begin to look at how we can transform the way we lead the function. 

We’re not saying that we’re done with 1-3 yet as especially 2-3 require significant efforts to get to a state where we can be satisfied with the ROI of the investments we’ve made. Still, we must start to focus our attention on leadership. 

Why is leadership the next topic for the transformation? 

It’s a fair question to ask, but it should be obvious that with everything else transformed, Finance doesn’t look the way it used to. That means we cannot continue to act and lead the way we used to.

We used to be slaves to processes and systems and cared little for the people doing the job. The lack of care, of course, made the transition to service centres easier but it also makes the leadership transformation a lot harder.

Firstly, we must make leaders understand that the transformation is necessary, secondly help them get it off the ground and then finally even more so to push them to see it through.

That’s why over the coming weeks we’ll explore the topic in-depth. We’ll provide you with a model for the new leadership that’s required and then explore each element in the model. Here’s an outline of what we intend to cover. 

• Introducing the new leadership model for Finance
• Exploring how every great leader must have deep self-awareness
• Dig into how culture and behaviours are both barriers to change and enablers of the transformation
• Start a journey to find your purpose as a leader in Finance
• Spark engagement with your team that’s so critical to creating a high-performing team 

Research trends are also showing us; we need to embrace new skills as Finance leaders. The skills prediction by the World Economic Forum for 2020 shows more than half of the list as either leadership related skills or conditions that are facilitated through effective leadership conditions. Very interesting new contenders are emotional intelligence as number five and cognitive flexibility as number ten.

A survey by LinkedIn detailing the skills that companies are hiring for in 2019 show the top 5 soft skills in demand as creativity, persuasion, collaboration, adaptability and time management. The number four in the top five hard skills is people management. This trend suggests that we should think about upskilling ourselves and our Finance teams in these areas. There are a few behaviour types that are holding us back from being effective business partners - behaviours like always wanting to be right, or to always have the last word, the so-called ego based behaviours, or trying to control situations or being overly competitive with our partners; which will only push them away and create a sense of distrust.

Over the next few weeks, we will show alternative behaviours that could enhance our abilities as business partners and unlock our greater potential as Finance professionals.As always, we’d be happy to share your stories too so don’t hesitate to reach out during our publication of the series. More so we hope you’ll engage in discussions with us about how you see the leadership transformation journey that we must embark on now.

Leadership is the last critical step in two decades of finance transformation. We cannot afford to drop the ball at the finish line. Are you ready to start leading differently?

You can read a lot more articles about FP&A, Business Partnering, and Finance Transformation below. It all start's with “Introducing The Finance Transformation Nine Box” where you set the ambition for your transformation. You should join the Finance Business Partner Forum which is part of the Business Partnering Institute's online community where we will continue to discuss this topic and you can click here to follow me on Twitter.

How To Create Value Through Business Partnering

Everyone Can Adopt A Business Partnering Mindset (part of a six-article series about FP&A Business Partnering)

From Business Partner To Working Within The Business (part of an article series where I interview finance professionals about their careers in FP&A and Business Partnering)

Is Your Product Optimized For Value Creation? (part of a toolbox series where we look at what tools FP&A professionals should leverage to drive value creation)

How Business Partners Turn Analysis To Insight (part of case study series where I interview business partners about how they drive value creation using real cases)

The Future Of FP&A: Two Ways To Take The Reins

What Is The Accounting Profession Paradox?

What Defines A Finance Master?

The New Career Path For Finance Professionals

How Finance People Can Be More Successful

The CFOs Roadmap To Transforming Finance

How To Become A Finance Business Partner

Financial Analyst vs. Finance Business Partner

You’re A Finance Business Partner, Now What?

Building A Team Of Finance Business Partners

Anders Liu-Lindberg is a Senior Finance Business Partner at Maersk supporting our largest product and I have more than 10 years of experience working with Finance at Maersk both in Denmark and abroad. I am also the co-founder of the Business Partnering Institute and owner of the largest group dedicated to Finance Business Partnering on LinkedIn with more than 7,000 members. My main goal at Maersk is to show how to be successful with business partnering and drive value creation as a trusted partner. I am the co-author of the book “Create Value as a Finance Business Partner” and a long-time Finance Blogger with 31.000+ followers.