With Dragos and at the initiative of one of our prospects, we decided to organize a day dedicated to CFOs (to DAF, Financial Directors) and agility: Agile CFO. When Bjarte Bogsnes displays a list of about thirty company logos that have embarked on this new way of thinking about the financial role, I don’t see any French companies—why not yours?
Why a day for DAF/CFOs?
The observation remains the same for all professions: the acceleration of time, globalization and its interlacing of information, the complexity linked to all these criteria is disrupting the way we apprehend the world. Finance professionals are not exempt from this question. And either they are or will be increasingly challenged by the teams around them, or they are undertaking or will undertake on their own the necessary reflections.
A day to get a feel for this new way of thinking about our modern world that from IT service agility has naturally spread to business functions and their product approach, touching HR and Business Development, and finally diffusing to financial services. Scrum, Kanban, XP for IT services; Lean Startup, Design Thinking, for business functions; Holacracy, Management 3.0, Liberated Company for management and entrepreneurship; These are the #noestimate movements and even more so “beyond budgeting” that will resonate with finance professionals.
What are the necessary reflections?
Companies think they lack money and time. They are mistaken; the answer is not found in controlling money and time, but in creating the right products and engaging people.
“When you track costs you generate costs, when you track value, you generate value” explained Peter Drucker, the great management guru.
It’s not about having more things, it’s about having the right things
We’ve known for nearly fifteen years that products, the features, offered to people are never or rarely used in two-thirds of cases because they prove useless or poorly designed. Just observe around you to be convinced. So it’s not time and money we need, but the right product.
This induces a whole reflection on product design, the needs or problems we’re addressing, a projection on uses and contexts of use. There’s no point in first having money to build things. Above all, we must build the right things.
It’s not about working, it’s about being engaged
We also say, even if there’s no definitive figure or study to back it up, that an engaged person is very, really very significantly more efficient, productive, innovative, active, than one who is not. Some speak of a ratio of 1 to 10, others of a much higher ratio. There’s no point in investing in time; we must invest in engagement in a sense, we must finance ownership.
It’s not about having more time, it’s about being on time
This impression of needing time is in fact not linked to an amount of time, but to good concordance, coordination, with the market (I don’t know if I like it but it’s the market that dominates these questions today). We therefore need a capacity to operate with flexibility (in small batches) and with great relevance (prioritization, hypothesis validation).
Recently, it’s not at all the companies that have time and money that flourish. But those that knew how to invest to create the right things, while engaging their collaborators.
All these questions should also be reconsidered by finance professionals who can have a particularly powerful obstructive or supportive power. It’s not about putting the company in danger, it’s not about obliterating financial aspects. It’s about positioning ourselves in concordance with what the times demand while guaranteeing the accountabilities and responsibilities that one has the right to expect from a Financial Director.
The topics we will address during this day
Difficult situation, difficult positioning
The situation is difficult. It involves a considerable change in mindset because we find ourselves at odds with a Cartesian approach particularly anchored in our culture. It’s a difficult situation because financial services are often the bulwark against (judged) untimely flourishes. Yet they will now be asked (and on this I’m quite clear, with time, they will have no choice) to change this approach that’s too rigid for our modern times, and themselves to renew themselves. Some may decide to resist, not to believe in it; the collapses will be rapid. During the last fifty years the average lifespan of a company has gone from about sixty years to ~18 years.
Validating culture, philosophy and values through numbers
The good news is that they won’t lose their role as the company’s center of gravity. Even better, their risk-taking contrary to appearances will be less than today where their ways of operating are no longer in phase with the world around them. But they can no longer rely on numbers as philosophy. They will have to rely on a culture, a philosophy, values, which themselves will be constantly validated by numbers. The reversal is significant. Like the modern manager who no longer micro-manages but sets a framework and clear rules within which their collaborators emancipate themselves, the finance professional will set a framework and clear rules within which the company will find space, levers.
Working with a posteriori measurements
The new philosophy of the financial director is indeed to embrace this new way of thinking about the company. To invest in achieving objectives possessing value at regular intervals allowing risk-taking justified by a reduced scope and validated by significant measurements. Liberation of a space (choice, experimentation, autonomy) that the company’s forces will seize to move forward without eschewing an accountability measured constantly, or at least very regularly. With real a posteriori measurements at regular intervals and not commitments based on estimates not perceived as hypothetical, which they nevertheless are.
Workshop content and practical details
This is all what we’ll talk about with Dragos during this day. By drawing on the “#noestimate” and “beyond budgeting” movements and by trying to generate and trigger first operational steps for those present, by cross-referencing their experiences, by relating known experiences.
The morning is devoted to presenting concepts, culture, the mindset of these new ways of approaching the complex, changing and uncertain world that is ours. A morning to discover how this can have an impact or be integrated into your activity and your expertise.
The afternoon is devoted to workshops that will put these concepts into practice and allow debates among peers, experience feedback.
You’ll find more information on Agile CFO (See you on December 13 (we postponed by a week!).
A few links (thanks Dragos!):