Change is inevitable: whether it’s ever-evolving technology, a suddenly-competitive talent pool, or disruption in your industry. Many organizations still fail to plan for change, thinking that it’s impossible to anticipate or not relevant at a given moment. This point of view can create unnecessary risk. Your organization’s flexibility and preparation may determine whether a change is a positive or negative event; even a useful software update can be immensely challenging if an organization has lagged behind on previous updates. Other disruptions are challenging no matter how much you prepare, such as hurricane-level destruction, supply chain shutdowns, or the unexpected departure of a key employee.
While it’s not always possible to predict change, it is possible to prepare your organization to adapt when the unpredictable happens. Organizations must prepare for change long before it arrives in order to adapt, survive, and grow. The first step toward building flexibility and resilience is understanding disruptive internal and external factors. Then, you can begin to identify opportunities to prepare for the unexpected and to mitigate negative consequences when disruption occurs.
Organizations that developed a culture to expect the unexpected have weathered recent turbulent events, such as the ongoing global pandemic, and emerged strong. Those organizations always expect change and were able to adapt rapidly because they were prepared. Now, there is an increased demand for all business functions to prepare for unforeseen challenges.
Internal changes that can disrupt your finance function include personnel changes such as employee departures or promotions, budget cuts, and changes in stakeholder commitments. Examples of external changes include new business landscapes that force adaptation, as well new or revised regulations and standards.
Take the time to step back and evaluate how flexible your processes are and how easily your people and technology systems can adapt to disruption. To start identifying how to improve flexibility in your organization, consider:
The answers will help highlight where focus preparation efforts. If your organization is not quite ready to implement changes to create a culture of anticipating and adapting to disruption, consider a professional consultation to help you make the case for change.
Consider the big picture when planning for change in any business function. Preparation for change needs to begin at the top. For example, when creating a budget for a new fiscal year to meet revenue and market expectations, is your organization also considering the administrative and technological support required to achieve those expectations? Unfortunately, organizations often plan for operational growth without giving full consideration to the people, processes, and technologies necessary to make the vision of growth a reality.
An organization that’s ready to adapt to disruption needs a common vision. Don’t be afraid to ask if the vision hasn’t been communicated to you. Evaluation of the function’s ability to meet the vision depends upon everyone understanding the vision. Consider:
When considering change to prepare for disruption, identify issues as they fall into three broad categories: people, processes, and technology systems.
People are frequent sources of disruption for organization. We recently spoke to an audience of more than 100 financial professionals, and about 75% indicated they had experienced turnover in their finance/accounting team. This is exactly the type of change for which you can prepare.
Processes should take advantage of the skills possessed by current employees as well as the functionalities of current software. “This is the way we’ve always done it” is not always a good reason to keep old processes in place. To be nimble and adapt to change, employees and organizations need to maximize the investment of their time. Are there manual processes that can be eliminated? As an example, manually performing bank reconciliations is no longer an option. Utilizing online resources or automated reconciliation software features can save valuable time and has already become the norm for most organizations. By assessing processes and eliminating manual work, employees can provide more meaningful analyses to support your organization’s goals.
Technology should provide visibility and insight across all facets of your organization, clearing the path for data-based decisions and timely responses to disruption. Evaluate current technology for limited insight, lagging visibility, or multiple manual processes to accommodate necessary functions. Perhaps your organization has outgrown the software or is not efficiently using the available features. In the short term, your organization may need to invest time and budget to determine what change is needed and either start fully-utilizing the current technology or implement one that can support greater flexibility. However, the efficiencies gained can provide dividends in the long run.
All of these steps to refine processes, update technology systems, and prepare people may sound daunting, but you don’t have to do it alone. Is there someone in your organization who can be designated to review software updates? Do you have an employee familiar enough with a process to create a reference guide? You may even need to review one of these areas with an experienced professional who can provide a deep understanding of common challenges and available strategies.
P&N professionals can help you identify areas of opportunity for your organization and create a plan to implement impactful changes. Contact us to discuss how we can help you take the next steps to becoming an organization that embraces change to outlast disruptions.