Inherent Design Faults in Shared Services
I got asked last week did I have any Black Friday Deals? To be honest I wouldn't be a Black Friday fan but I said if you can find which Newsletter I put it in you are welcome to it. So if you are interested in one of my On Site Courses and you read this you are welcome to a 25% Discount. I should stress On Site is for the UK and Ireland only.
In my experience if your Finance Shared Services Centre has a preponderance of 'Enabler Roles' it is underperforming by definition and inherently badly designed. Let me explain..
...I notice that we have many BAU Shared Services Leaders within our Subscriber base. My work is aimed predominantly at those who wish to create a Finance Shared Services Centre or Turnaround an underperforming one. However, there is a third route to my help which may be of interest you.
Let me start by explaining in my experience only a Finance function which has been 'designed' from first Principles as part of a Finance Transformation Program has ever had the forensic lens of Organisation Design shined on it. Organisation Design is a skillset, a very important one, which is predominantly found in major Consulting firms. Exponents thereof may currently work in Industry but they honed their craft at one of the Big 4.
You may be the Leader of an established Finance Shared Services Centre, it may have been set up with an internal Project team or it may have been set up due to rushed M&A activity or an ERP Upgrade. The forensic lens of Organisation Design was therefore I would argue absent.
Just for the purpose of this Article let us call you the BAU Shared Services Leader. You manage between 50 to 150 Finance staff in the UK, you are not working for a cash strapped Business and you are in your own words 'doing ok'. You are established therefore we don't need to Create your FSSC from scratch. You would maintain you are not Underperforming either so no requirement for Turnaround, yet...
You may even be new to the Role. The Role itself may have only recently been created in its current format and scope. You may just be 'feeling' your way into the Role. All of the above may apply but one thing is certain, you are not as good as you could be.
To be clear based on all Market Intelligence a high proportion of UK Finance Shared Service Centres in the <100 FTE bracket are median to low performers by any objective assessment. I talk with FSSC Leaders across the UK regularly and I don't wish you to think you are alone if you are not hitting the heights you would like to. I have another Article with all the reasons why but that's not for now.
Lets be honest you wouldn't be reading this if you thought you were World Class, so you came here to learn something. To find some way to improve, to better yourself and your Team. You want to be the best you can be, there is no other measure folks. You and only you know when you look in the mirror if you have achieved your best or not. No Benchmark will answer that question.
You may not have an idea of where you currently stand on any objective Assessment of your FSSC so its hard to know how to improve if you can't see your starting point. You may not be skilled in all areas of running a FSSC, you may have come up the AP or AR route but your not too comfortable on the corresponding side of the House.
You may have some Continuous Improvement Project Managers, they may have a long list of tactical initiatives to implement. They may be busy, everyone may look busy, it may all look like there is loads to do and people are doing it.
You may have a preponderance of 'Enabler Roles' which include Finance Business Partners, Account Managers and Project Managers but that does not mean you are upper quartile performance in fact it suggests quite the opposite. My own personal barometer of how weak an FSSC is measured in how many of those 3 Roles above it needs just to function.
If it has them all involved then it was designed for failure. It was actively designed to allow for the weaknesses in its Line Management structure, the Operational Managers who deliver the work, nothing else matters.
You will never have an FSSC of Finance Business Partners, they are not a core component of Finance Service Delivery and only cover up the failure of the FSSC Line Teams at greater expense. No Business Case could truly be made for hiring FBP typically >￡80K plus package because your ￡40K AP Manager can't work with their Procurement equivalent. Sounds harsh I know but nobody needs a Business Partner to deliver work they just need one to justify why it isn't delivered, which sounds like an inherent Design fault to me.
If you do have such Roles and I don't recommend you do, make sure they report to the FSSC Director otherwise they have a high tendency to go native. There is also inevitably a tendency to have dual Reporting lines. This never ends well as the individual 'chooses who to take their lead from.
Organisation Design, in depth across the FSSC and the remainder of Finance is critical for the FSSC Director to know and to have in order to manage service delivery effectively. Ease off on the Enabler Roles and if you must have them only use them in early stage start up, say for Year 1, anything after that is just baking in failure.
How prepared are you for that shock outside your control, never mind how prepared are you to improve. Whenever, I take over an FSSC for a Client whether they are underperforming or not I go with laser like focus to the Organisation Design. It may not be there but I build one as my No. 1 Priority or I can't manage performance improvement. For the record without one Performance Management is impossible.
There is a depth to Organisation Design which goes way beyond an Organisation Chart and that is why I recommend that everybody running an FSSC has a Current Organisation Design of their FSSC as a priority and have it threat assessed.
As all my Training Courses emphasize if you can't Measure it you can't Manage it, you are just a Cheerleader.
Want to be the best you can be? Then reach out today.
Best Regards,
Michael Ryan.