Do you keep hearing that the finance department stifles your organisation’s ability to be truly agile? Would you like to know how adopting an agile mindset could help yourself and your team become much more efficient and effective?
Here are 9 tried and tested business agility practices your finance department can use to provide better value faster!
1. Know and value all your customers
All organisations know how important it is to understand and meet the needs of external customers, but what about internal ones — other departments as well as the senior leadership team? Different departments and different people within those departments may have differing needs and/or finance abilities. What is obvious to us finance professionals may not be obvious to others, so it is our responsibility to take the lead in ensuring our non-finance colleagues are getting what they need in a timely, relevant and understandable way.
As well as providing accurate financial information, we should actively seek feedback from all our customers to continuously improve (and streamline) our outputs.
We must also ensure we take the information to the decision-makers and not assume these people are always those in the boardroom. An agile way of working means your decision-makers could just as easily be colleagues working on the business frontline.
2. Think outcomes, not outputs!
In our eagerness to provide accuracy and completeness in our month-end or year-end slide decks, we often lose sight of pragmatism, relevance and impact. We can spend longer sorting out the decimals and rounding errors than thinking about how the information is going to serve the user. We take the previous month’s report and replace the numbers and text, then add the new slides for the new information requests. But are all the slides still useful?
3. Be adaptable!
We need to embrace change and adapt to evolving business and market conditions. This may involve regularly reviewing and updating financial policies, procedures and practices, as well as being open to adopting new technologies and tools that can streamline financial processes and enhance decision-making.
Much of the information we provide could be collated and delivered automatically. We need to figure out how to help drive the business forward rather than reconciling the past to a budget number which was based on assumptions.
4. Deliver value now!
The finance department can prioritise delivering value in a timely manner. This may involve accelerating financial reporting and analysis, implementing agile budgeting and forecasting processes, and prioritising initiatives that have a direct impact on the organisation's financial performance. Until the production of the monthly accounts is fully automated, we may see that we have collated enough information in the first 20 per cent of the time it takes us to produce our reports. The remaining 80 per cent of the time is probably just tinkering.
5. Modernise your leadership!
The Finance Department can foster a culture of modern leadership that encourages innovation, collaboration and empowerment. This may involve promoting a collaborative and inclusive decision-making process, empowering finance team members to take ownership of their work and contribute to strategic initiatives, and encouraging cross-functional collaboration between finance and other departments. One of the most effective ways to do this could be to embed the finance professional in the agile team they are supporting.
6. Use the evidence!
Now we may think this is what we are all about: Evidence. Collecting and analysing the actual data and reconciling it to the forecast and budget. However, with an agile mindset we use evidence to change the budget and forecast, not just to explain why we are off course.
We use evidence to re-plan and reprioritise. To stop projects which are not working and start new projects which were not thought of when the budgets and forecasts were originally conceived.
The finance department is in an optimal place to encourage evidence-based decision-making in the organisation, by leveraging data and analytics to drive financial insights and recommendations.
This may involve using advanced analytics tools to gain deeper insights into financial data, conducting thorough financial analysis to support decision-making, and using data-driven performance metrics to evaluate financial performance and identify areas for improvement.
7. Strive for simplicity!
We should strive for simplicity in financial processes and systems to reduce complexity and increase efficiency. This may involve simplifying financial reporting templates, streamlining financial workflows, and eliminating unnecessary bureaucracy and paperwork to expedite financial decision-making.
8. Be transparent!
The Finance Department can promote transparency by providing clear and accessible financial information to everyone in the organisation. This may involve implementing financial reporting and communication channels that are easily understandable and accessible to all stakeholders, and actively engaging in open and transparent communication about financial performance, risks, and opportunities.
Where transparency, even radical transparency, has been created, we find that colleagues are more motivated in their work and more likely to work out both obvious and innovative ways to save money and improve the financial numbers.
We can foster a collaborative approach by working closely with other departments and stakeholders to achieve common financial goals. This may involve establishing regular cross-functional meetings, engaging in joint financial planning and budgeting, and actively collaborating with other departments to identify and implement financial solutions that drive overall organisational success.
The finance department implementing even one of these key business agility practices will result in a more agile, customer-focused, and collaborative approach to financial management.
To adopt a practice which involves a new way of thinking and working, we should:
- Explore – learn about the practice and consider the impact it may have
- Experiment – test the ideas out in a small and safe way and collect evidence that they could work
- Execute – roll out the new way of thinking and working to the relevant teams
All of these practices can help us better adapt to changing business conditions, to deliver value, simplify processes, promote transparency and foster collaboration, ultimately leading to improved financial performance and organisational success.
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For further reading, please see: How can Agility help a Finance Department? (agilebusiness.org)
Please note: blogs reflect the opinions of their authors and do not necessarily reflect the recommendations or guidance of the Agile Business Consortium.