The People Side of Finance – Part 3

Excerpts from the the following post are from an article I wrote for the March issue of Alvarez & Marsal’s “Finance-Tracking Finance” publication.  This post picks up from “The People Side of Finance – Part 2″ and provides some suggestions for creating a positive and productive culture that not only serves to motivate finance employees, but also sets an example for the rest of the organization.

Develop and Utilize Employee Strengths

Companies spend a great deal of time trying to develop the perceived “weaknesses” of employees instead of taking the time to evaluate and develop strengths. While there are certainly cases in which you cannot overlook a core-skills development point, it is a mistake to disregard an employee’s strengths. Focusing on weaknesses, in essence, forces an employee to do things they may not be naturally inclined to do, and this takes time and energy away from areas in which they can excel.

Finance organizations should consider the following approach: First, evaluate the complement of skills and talents required — and how those skills will enable the finance team to best support the business. Then, evaluate the talents and strengths of your team members. After completing your gap analysis, develop an action plan to address specific needs. Employees may need to be re-assigned or rotated into finance from other departments or new employees may need to be hired. In cases in which you find an employee is no longer a fit, help them find other opportunities within the company to elevate their strengths. However, if you consistently find you need to “develop people’s weaknesses” or move them out of finance, you may also need to re-evaluate your recruiting and hiring practices.

Skills assessments should be ongoing. Over time, business needs change, as do the skills and strengths of your employees. Do not get complacent, as your team can easily get out of synch in applying their talents as needed in certain positions.

It is critical to not take a cookie-cutter approach. Your entire team should not possess the exact same mix of skills. Doing so will lead to inefficiencies, and morale may suffer if people are being pushed away from their true strengths. If people are doing what they are good at, they will be happier, more productive and successful. Reinforce the alignment of employee strengths with the skills you need, and make sure that performance measurement is tailored to each specific individual.

Stay tuned for Part 4 and conclusion to the article “The People Side of Finance”.

The People Side of Finance – Part 2

Excerpts from the the following post are from an article I wrote for the March issue of Alvarez & Marsal’s “Finance-Tracking Finance” publication.  This post picks up from “The People Side of Finance – Part 1” and provides some suggestions for creating a positive and productive culture that not only serves to motivate finance employees, but also sets an example for the rest of the organization.

Create a Positive Environment

Many self-help books claim that the beliefs and attitudes of each person constitute an average of the beliefs and attitudes of five people with whom they spend the most time. People spend most of their waking hours at work, so it stands to reason that bosses, peers and employees have a profound impact on how we see the world, how we see ourselves and how we see our jobs — all of which impact our general sense of satisfaction. If we are surrounded by negativity, there is a good chance that we ourselves will become negative. If we work with a more positive and optimistic outlook, it is likely we will find ourselves in a better state of mind.

Unfortunately, we all know people who, regardless of what is happening in their world, find a reason to complain. They are not being paid enough, they are not appreciated, the company’s strategy is wrong, and so on. Ironically, most of their time is spent complaining to people who cannot change the situation. Rather than initiating a constructive discussion with those they report to, they complain to co-workers — or worse, in the case of managers and supervisors — to their direct reports. This type of negativity can become cancerous and spread quickly through a department or an entire company, leading to bad morale and low productivity.

The last thing companies need is a platoon of “Yes Men” who simply go with the flow. It is a necessity to employ people who constantly challenge themselves and the department to become better, introduce new ideas and push back on changes to policies or processes that may not provide the intended benefits. All of these actions should be encouraged because they only make the corporation and the individual stronger. However, these discussions need to take place constructively and with people who have the authority to make things happen. Any other approach will be counterproductive and disruptive.

When evaluating an employee’s performance, finance executives should not only consider technical skills and contributions, but also the impact employees may have on the morale of the department. Are they generally good-natured and constructive when making points? Or are they disruptive and negative? You will often find top performers are also extremely positive and enthusiastic. For those who hinder morale, point out their positive contributions, but clearly explain that your expectations related to “soft skills” are not being met. These employees need to show marked improvement or move on — either way you will see a substantial increase in morale.

Finally, consider introducing bonding activities such as team lunches or local charitable or civic events. Take a day out of the office for community service. Studies have shown that people gain a sense of satisfaction or accomplishment from helping others — and this is a great way to build camaraderie among the team, while giving back to the community.

The People Side of Finance – Part 1

Excerpts from the the following post are from an article I wrote for the March issue of Alvarez & Marsal’s “Finance-Tracking Finance” publication.

As Corporate America recovers from the worst recession in almost a century, company executives continue to look for ways to revitalize their organizations. CFOs are making adjustments that will help sustain the patchwork of cost reductions and working capital improvements that allowed them to weather the crisis. Sales and marketing professionals are concocting creative solutions to lure back customers, increase orders and generate revenue. And operations personnel continue to look for new methods to bring efficiencies into production, distribution and service delivery. However, as executives evaluate process improvements and explore capital investments, they should not overlook opportunities to enhance one of the organization’s most important assets — people.

Even as we trudge forward (hopefully!) into a better economy, the corporate hangover lingers. Many employees know of co-workers and friends who have been laid off. Worries about job security, a freeze on salary increases or bonuses, and even the possibility of another pay cut persist.

Finance is not immune to the malaise. Even with cuts made during the recession, many companies continue to explore the potential of outsourcing finance jobs, while others are evaluating new technologies that will provide more automation and a need for fewer employees. With aggressive growth plans for many companies, these strategies may not translate into job cuts, but rather, maintenance of the status quo. In short, concern abounds.

For now, with most staff reductions out of the way, what can finance executives do to recapture the hearts and minds of the people who remain? Over the next few days, I will provide some suggestions for creating a positive and productive culture that not only serves to motivate finance employees, but also sets an example for the rest of the organization.

Back to the Finance Function of the Future?

There I was, trapped in 1995, reading an article about how finance organizations should shift their focus away from being transaction processors to becoming a more “value-added partner with the business”.  Only it wasn’t 1995 – it was 2011 – and it wasn’t just one article……..  What the heck!?  Didn’t I already live through this once!?  In the mid-90’s, Arthur Andersen was heralding the finance function of the future, an organizational utopia where finance shed its perception as a mere scorekeeper and focused on “more value added activities” like analytics.  Yes, I had spent my consulting youth in the 90’s buried in shared services and finance transformations enabled by the latest and greatest ERP systems.  So why was I here?  Did someone fire up my flux capacitor when I wasn’t looking?

 Are there really that many companies out there trapped in a time warp with multiple ERP systems and duplicative transaction processing functions scattered about the country and the globe?! Surely there can’t be enough to warrant the flood of recycled shared services literature that I see littered across the web?!  Perhaps with an uptick in M&A activity, there are a few new acquirers out there who are now faced with having to streamline disparate accounting functions for the first time?  And what about the apprehensive management teams who proclaimed that “our value comes from the autonomy we provide to our businesses” because it was hard to muster the energy to push through the dissent with what they knew made great sense for the enterprise as a whole?  Maybe the economic upheaval of the last few years sprouted some courage and removed an excuse not to seize the opportunity?  And then there is the middle market – maybe those who had been caught up in the turmoil of the last decade have now finally awakened to the cost saving and service level benefits of shared services?

 Whatever the reasons, those companies who have not evaluated leveraged service models, including both shared services and business process outsourcing, are behind the curve and losing ground quickly.  Many companies adopted continuous improvement cultures when they originally adopted shared services and are on their second, third, and fourth generations of leveraged services.  Their models are constantly changing – not only to include other transaction processes but now other activities, even strategic ones.  These companies consistently ask “what can we do better, how can we improve customer service, and how can we more effectively manage costs”.   Make no mistake, leveraged services will not provide a competitive advantage – your competitors are already doing it.  Leveraged services are a competitive necessity.

 The “finance function of the future” is here – it’s been here and it is constantly changing.  Those companies who have mastered leveraged services have moved on to other frontiers such as honing their reporting and performance management processes and abandoning the annual budgeting processes in favor of more strategic cross-fiscal year rolling forecasts.  So if you are stuck in 1995 – or even in 2010 – please say hello to Fred and Barney.  Be a Jetson, not a Flintstone.  Stay out of the history books.  It’s time to get moving!