By Tim Wakeford, Vice President Product Strategy, EMEA Financials at Workday
A good few years ago, a McKinsey survey of more than 3000 executives found that a whopping 70% of change programs fail. The problem is, this is 2020 — the year of change. In the midst of a pandemic, almost every media and marketing business has had to change or is still changing, and failure in doing so is not an option if companies are set to survive. In years past, we could easily attribute the failures of change programmes to poor company culture, unclear objectives, lack of proper resources, faulty communication, and so on.
But today, there’s a new challenge: Change Fatigue.
Change fatigue is characterised by a state of exhaustion amongst employees who have experienced too much change. Sound familiar? You are not alone. According to Jessica Knight, Vice President, Gartner, “The amount of change that the average employee can absorb without becoming fatigued is half what it was last year. Employees’ ability to absorb change has plummeted precisely at the time when more organisations need change to reset.” Change fatigue can slow down or stop progress and even set things back. And it’s not something media and marketing businesses can afford if they are to recover. The good news is, there is at least one way to help combat change fatigue fast — and it might surprise you that’s down to engaging the CFO and adopting agility.
Prioritising change efforts
Engage the CFO. Traditionally seen as the controllers of finance and defenders of the bottom line, these financial leaders have the power to help the rest of the business prioritise everything from investments and resources straight through to managing cashflow. This is because the majority of CFOs and their teams have rapidly learned how to do this themselves during the early months of the pandemic.
In fact, research by Adaptive Insights, a Workday company, revealed that seventy-five percent of finance leaders found that their current planning processes were unable to prepare them for the economic disruption this year has brought. From redundancies and furloughing staff to ensuring rewards were engaging enough for retained staff, finance teams had to swiftly rework their forecasts and replan for a struggling economy. This led CFOs and their teams to prioritising digital transformation.
They did away with legacy systems, old fashioned document versioning and flicking between varying spreadsheets. Instead, CFOs and their teams adopted cloud-based finance solutions with powerful analytics capabilities that helped them to pull in real-time data to help them make their decisions. And with this experience under their belts, CFOs are now in a position to start helping other business leaders to prioritise and recover without falling victim to change fatigue.
Agility in the face of change
Being agile when faced with change has always been a defining characteristic of companies that respond well to competitive threats. A Workday study on organisational agility showed that top-performing companies were ten times more likely to react quickly to market shifts. Faced with change fatigue, agility — starting with the adoption of continuous planning — may be the essential tool to draw a much needed resilient course for growth.
For our customers, some of whom operate in the same competitive media and marketing industry as yourself, adopting driver-based modelling has been key to them planning successfully. This approach ensures the whole business is moving toward the same goal as it builds out forecasts which link operational activities to key variable revenues and expenses. Here are three basic steps that every finance team should be taking:
Sync with the business plan: we’re told communication is key in avoiding change fatigue. This makes it particularly important to ensure that all areas of the organisation are working towards the same goal. Align with other senior managers across the business on the priorities and goals for that planning period, to inform any “what-if” scenarios.
Identify the largest business drivers: leaders should forecast based on the things that have the largest financial impact on the business. With the help of the CFO and his/her team, conversations can be opened up across all levels of the business which can help to identify business drivers — whether it’s a disruption in the supply chain, a significant impact in sales demand or new customer acquisitions. Knowing the drivers will mean less change and less change fatigue
Focus on three meaningful scenarios: while it is still unclear what each month will bring at this point in time, you probably have an idea of what could go wrong. With regional lockdowns set to continue, and customer spending unpredictable, it is time to focus resources, and change motivation, on things that will have a bottom-line impact on your business.
While these may seem obvious, we’ve found that many finance functions are still not doing this or do not possess the tools required to do this at scale and within the necessary timeframes. Once in place, the planning technique of driver-based modelling will empower decision-makers to analyse any potential impact on the business priorities such as recruitment, incentives and rewards. By continually forecasting various scenarios, finance teams can ensure that their plans are effective and relevant to the current business landscape. And at the same time, ensure that the rest of the business is focused on changes that will add, and not detract from the bottom line.
A new era for operations
If media and marketing businesses only take one lesson from this year, it’s that they must be prepared for the unexpected. Avoiding change is impossible, but mitigating change fatigue is a must if failure is to be avoided. A partnership with the CFO and finance team, an agile mindset, and the right technology, is key. Only by embracing a new approach, and through prioritising change efforts, businesses will be able to recover faster, motivate their workforce and achieve success in 2021.