Global

Finance
360
THE CFO AS
TRANSFORMATIONAL
LEADER
“The best way to predict the future is to create it”
”Leaders of
successful change Peter F. Drucker
programs The future of every organization occurs either by design or by accident.
understand that true Transformational CFOs understand the choice and are committed to guiding their
transformation organization in a transformation program that creates value through the alignment of
Finance capabilities with corporate strategy. The CFO, by virtue of organizational
occurs in leaps, not position and power, is uniquely enabled to drive significant and lasting change in the
increments, and Finance organization.
that the
There have been many examples of successful transformation efforts, both within
transformation Finance and corporately. Through research and practice, a picture has emerged that
effort is holistic, defines the key steps in a successful transformation effort. While there are a number of
approaches a company could pursue, the following eight points should be an integral
encompassing the part of every transformation effort.
hard and soft levers
of organizational Understand and Communicate the Need for Transformation
change. The CFO Transformational leaders understand the need to keep their organization moving forward.
as transformational With increased global competition and the attendant cost pressures, CFOs realize that
leader has a critical continuous improvement is necessary to remain competitive. A transformation leader
has a holistic perspective on the role of the Finance organization and how it enables the
role in driving the fulfillment of corporate strategy. There is a strong understanding of both the quantitative
transformation and qualitative measures defining Finance performance and how their organization’s
current performance compares to best-in-class organizations. This information is used to
required to align the understand the nature and extent of the change required.
Finance
A foundational element in the communication plan is the need to communicate a sense
organization with of urgency, a burning platform that is driving the need for change in Finance. People
corporate strategy, involved in the transformation effort need to understand why it’s important to experience
short-term pain to achieve long-term gain. They need to understand how the
enhance the transformation program will support the broader corporate strategy and how they fit into
effectiveness of the overall program. The CFO as transformational leader is at the forefront of this
service delivery and communication.

drive cost out of the

Create a Guiding Coalition
organization so that
Finance is a true No single individual can accomplish meaningful transformation on their own. Every
transformation effort as its core consists of three basic stakeholder groups: change
business partner in i
strategists, change implementers and change recipients. It takes a coordinated effort
the drive for value from a number of individuals sharing a common vision and desire to create a better
future to drive a transformation effort. However, the CFO plays a key role in building the
creation.” guiding coalition that governs and drives the transformation program.
The individuals chosen for the guiding coalition can make or break the transformation
effort. Based on the work on Harvard University professor John Kotter, there are four
ii
key attributes that members of the coalition should posses:
Global Finance 360 | Copyright 2010 | All Rights Reserved 1

About Global Finance 360
Global Finance 360 covers the
world of corporate finance and
accounting and how these
activities are impacted by
globalization. Focus areas
include Finance Delivery
Strategy, Shared Services,
Business Process Outsourcing,
Process Improvement and
Organizational Design.
Global Finance 360 is run by
Steve Lynch. Mr. Lynch is a
Principal in the Finance
Transformation practice of a
global consulting company. He
is responsible for the marketing,
sales and delivery of Finance
Transformation services in North
America and serves as a key
liaison for his company’s global
Finance practice. He brings
more than 15 years of
experience advising global
companies on their service
delivery strategies and has
served over 60 clients in a
variety of industries including
consumer product and industrial
manufacturing, aerospace &
defense, transportation,
technology, entertainment and
financial services. He has also
served as a Controller in private
industry and as an auditor in
public accounting.
Mr. Lynch is an active content
contributor on the topics of
Finance Transformation and
globalization and has presented
at various forums including the
IQPC Shared Services &
Outsourcing conference. He can
be found on the web at
www.globalfinance360.com.
Contact Information:
Steve Lynch
Toll-free: +1.800.216.2512
Office: +1.719.481.2599
1042 W. Baptist Road
Suite 194
Colorado Springs, CO 80921
slynch@globalfinance360.com
www.globalfinance360.com

Position Power – The key leaders of the stakeholder groups previously identified
should be part of the coalition. It is dangerous to leave out key individuals who can
fuel resistance against the transformation program.

Expertise – The coalition should have the expertise needed to create comprehensive
and holistic change, both in the Finance organization and across the broader
corporation.

Credibility – The members should be seen by the organization at large as highly
credible individuals. These people should have a track record of aligning their
behaviors with their words, and have a track record to achieving meaningful
transformation.

Leadership – Different from managers, leaders are adept at shaping the vision and
getting people to buy into that vision. They can be trusted to guide the organization
through the transformation program. Leaders convey a credibility and track-record for
accomplishing meaningful change.
Assess the Maturity of the Existing Finance Organization
Transformation leaders understand that there are both hard and soft levers that drive
business transformation efforts. Hard factors include the processes, organizational
structure and technology infrastructure. Soft factors include the values, beliefs and
cultural norms that guide behavior in the organization. An effective leader evaluates and
diagnoses the current maturity of the Finance organization to develop a comprehensive
understanding of needed change. There are two basic aspects to this analysis: Current
performance and organizational readiness for transformation.
Assess Current Performance
It’s impossible to drive effective transformation without first understanding the existing
performance. A central focus of this stage of transformation will involve the collection of
baseline performance data and comparing the current performance to those of leading
companies in the form of benchmark data. There are a variety of benchmarks to
consider; however, the focus should be on how well those services are delivered to both
internal and external customers as well as the efficiency of those processes as
measured by cost and cycle time. In addition to the benchmarking exercise, it’s useful to
look at best-in-class practices for each process and evaluate the level of best practice
integration in the current Finance organization. By performing each of these exercises
the CFO can better understand the existing performance and identify the areas that can
yield the greatest gains in the transformation program.
Assess Organizational Readiness for Transformation
In addition to understanding and documenting current performance, the CFO must take
an objective look at the existing Finance organization and determine the capacity for
change. Factors to consider include:

Leadership capabilities for Finance,

Program management capabilities

Existing initiatives that consume Finance resources,

Budget available for the transformation program, and

Staff available for the transformation program,
By objectively analyzing the existing organizational capacity for change, the CFO can
properly structure and scope the transformation program to drive change and reduce the
risk of transformation.
Global Finance 360 | Copyright 2010 | All Rights Reserved 2
About Global Finance 360
Global Finance 360 covers the
world of corporate finance and
accounting and how these
activities are impacted by
globalization. Focus areas
include Finance Delivery
Strategy, Shared Services,
Business Process Outsourcing,
Process Improvement and
Organizational Design.
Global Finance 360 is run by
Steve Lynch. Mr. Lynch is a
Principal in the Finance
Transformation practice of a
global consulting company. He
is responsible for the marketing,
sales and delivery of Finance
Transformation services in North
America and serves as a key
liaison for his company’s global
Finance practice. He brings
more than 15 years of
experience advising global
companies on their service
delivery strategies and has
served over 60 clients in a
variety of industries including
consumer product and industrial
manufacturing, aerospace &
defense, transportation,
technology, entertainment and
financial services. He has also
served as a Controller in private
industry and as an auditor in
public accounting.
Mr. Lynch is an active content
contributor on the topics of
Finance Transformation and
globalization and has presented
at various forums including the
IQPC Shared Services &
Outsourcing conference. He can
be found on the web at
www.globalfinance360.com.
Contact Information:
Steve Lynch
Toll-free: +1.800.216.2512
Office: +1.719.481.2599
1042 W. Baptist Road
Suite 194
Colorado Springs, CO 80921
slynch@globalfinance360.com
www.globalfinance360.com
Develop a Compelling Vision of the Future
With a solid understanding of the change required and a guiding coalition in place, a
transformational leader guides the formulation of the future state vision. The vision
paints a picture of what the organization should look like without defining the specific
steps by which it will get there. Embedded in the vision is a message about why the
vision is desirable and why it’s important to be part of creating that future.
Creating an effective vision is not a simple task. It has to be strategically sound and yet
iii
emotionally appealing. It has to be focused enough to be easily communicated yet
flexible enough to be modified as new information is received during the transformation
effort. And it has to be challenging enough to stretch the organization while containing
enough realism to retain the commitment of the organization.
At this stage it’s important to understand the impact of this vision on the organization and
to define the stakeholder groups that could be impacted by the new vision. There will
clearly be many stakeholders within the Finance organization but true transformation will
cut across functional boundaries and will include departments and individuals in the
larger organization.
Communicate the Future State Vision to the Organization
After the vision has been solidified, it should be communicated to the organization. Key
elements of the communication strategy center on the message, the distribution
channels and the timing. The message should be clear, concise and compelling. It
should lay out the case for transformation, the end state vision, the benefits of achieving
the vision and the overall timeframe for completing the transformation program.
Additionally, effective transformation initiatives will impact people and they have a right to
understand where the Finance organization is heading and how they will be impacted.
This aspect of the transformation program shouldn’t be downplayed. As a result of these
factors, the CFO should invest time developing the specific message they wish to
communicate.
The actual communication should come through a variety of distribution channels. Town
hall meetings, newsletters, videos, e-mails and printed materials such as posters and
brochures are some of the typical channels to disseminate the key change messages.
Every organization is different and the CFO, along with the guiding coalition, will need to
decide which distribution channels most effectively convey information about the
transformation program.
Effective communication will be sent often and consistently during the transformation
program. It will also ensure consistent communication across a variety of stakeholder
groups to foster a common understanding of the future state vision and the key elements
of the business model that will be part of that vision. The actual timing of the
communication program should be integrated into the overall program schedule, and at a
minimum will include communications at the end of each major phase of the
transformation initiative.
Allocate Resources to the Transformation Effort
People chosen for the transformation program should be the organization’s best
performers, not their worst. The CFO will signal to the organization about the importance
of the transformation initiative based on the individuals chosen. When the best people
are assigned, the organization will know that the transformation initiative is for real and
not just lip service.
As the best people are committed to the transformation program, it’s often necessary to
backfill these positions so that the daily work of the Finance organization will be
maintained. Sometimes this can be accomplished by reassigning work to existing
Global Finance 360 | Copyright 2010 | All Rights Reserved 3

About Global Finance 360
Global Finance 360 covers the
world of corporate finance and
accounting and how these
activities are impacted by
globalization. Focus areas
include Finance Delivery
Strategy, Shared Services,
Business Process Outsourcing,
Process Improvement and
Organizational Design.
Global Finance 360 is run by
Steve Lynch. Mr. Lynch is a
Principal in the Finance
Transformation practice of a
global consulting company. He
is responsible for the marketing,
sales and delivery of Finance
Transformation services in North
America and serves as a key
liaison for his company’s global
Finance practice. He brings
more than 15 years of
experience advising global
companies on their service
delivery strategies and has
served over 60 clients in a
variety of industries including
consumer product and industrial
manufacturing, aerospace &
defense, transportation,
technology, entertainment and
financial services. He has also
served as a Controller in private
industry and as an auditor in
public accounting.
Mr. Lynch is an active content
contributor on the topics of
Finance Transformation and
globalization and has presented
at various forums including the
IQPC Shared Services &
Outsourcing conference. He can
be found on the web at
www.globalfinance360.com.
resources in the organization, but it often means bringing in outside resources on a
temporary basis until the transformation program is complete.
The transformation project plan should incorporate a “warranty” period after the go-live
phase of the transformation initiative so that these key individuals can work with the
broader organization to ensure that the effort goes smoothly and that the desired change
is embedded in the organization. It’s penny-wise and pound-foolish to roll these critical
resources off the project before the processes are stabilized.
Overcome Organizational Resistance
Every transformation effort has resistance. As soon as the CFO communicates the
vision to the organization, resistance will form and that resistance will be both active and
passive. Active resistance is easy to identify and can be deal with quickly. Passive
resistance is much more difficult to identify and correct.
The CFO as transformational leader needs to understand, identify and remove the
resistance that threatens the transformation effort. This can be as simple as publically
reinforcing the vision and intent to transform the organization. In extreme cases it can
mean removing of a key executive that has not personally and publically embraced the
new vision of the Finance organization.
Consolidate Gains and Raise Performance Expectations
The transformation program is likely to consist of a portfolio of improvement initiatives.
Every win in the transformation program should be documented and communicated to
the Finance organization as well as the broader organization. All of the individuals that
were part of the win should be publically recognized. The momentum created from those
wins should be channeled into additional transformation initiatives.
As the transformation program continues, the CFO should evaluate the performance of
the Finance organization and continue to raise the bar for performance expectations. No
transformation program takes place in a vacuum and the CFO should continuously push
the Finance organization to achieve best-in-class performance.
Conclusion
Leaders of successful change programs understand that true transformation occurs in
leaps, not increments, and that the transformation effort is holistic, encompassing the
hard and soft levers of organizational change. There is a guiding coalition and
comprehensive plan to guide the transformation effort with a deliberate eye towards
identifying and mitigating risk. The CFO as transformational leader has a critical role in
driving the transformation required to align the Finance organization with corporate
strategy, enhance the effectiveness of service delivery and drive cost out of the
organization so that Finance is a true business partner in the drive for value creation.

Contact Information:
Steve Lynch
Toll-free: +1.800.216.2512
i
Kanter, Rosabeth Moss, The Challenge of Organizational Change, New York, Macmillian Free Press, 1992, pg. 370
ii
Kotter, John, P. Leading Change, Boston, Harvard Business School Press, 1996, pg. 57
iii
Beer, Eisenstadt, and Spector, The Critical Path to Corporate Renewal, Boston, Harvard Business School Press, 1990

Office: +1.719.481.2599

1042 W. Baptist Road

Suite 194
Colorado Springs, CO 80921

slynch@globalfinance360.com

www.globalfinance360.com

Global Finance 360 | Copyright 2010 | All Rights Reserved 4