Session 4 - Transforming the Finance Professional

Transforming the Finance Professional
Lean Finance Conference:
Session 4 Master Class Series

© Copyright 2011 Stephen G. Lynch, All Rights Reserved
About Today’s Facilitator
•  Stephen G. Lynch
•  Principal at CSC Consulting in Finance
Transformation and Shared Services
•  Focus on Finance Delivery Strategy,
Process Optimization and Organizational
Design
•  Served as a Public Accounting Auditor and
as a Corporate Controller
•  Publish the Global Finance 360 blog
(www.globalfinance360.com)
•  Live in Colorado, United States

Overview of the Master Class Series
v  The Value-Adding Finance
Organization
v  Lean Assessment of the Finance
Organization
v  Re-engineering the Finance
Organization
v  Transforming the Finance Professional

Goals for Workshop 4:
Transforming the Finance Professional
§  Benefits and Challenges of Human Capital
Management
§  Understanding Organization Development
§  Types of Organizational Interventions
§  Transforming the Individual Finance
Practitioner

Human Capital
Management

A Traditional View of Human Capital Management

•  Companies that receive high scores in HCM are twice
as likely to be in the top third of their industry in terms of
financial performance
•  Companies in the top quartile of HCM performance lose
8% of top performers as compared to 18% in their peer
group
•  Companies in the top quartile of HCM performance are
twice as likely to rank high in quality as their peers
Benefits of Effective Human Capital Management
Source: American Society of Quality as cited in Reinventing Talent Management, Schiemann, 2009,
pgs. 10 – 11.

•  Companies have difficultly aligning people and
competencies with strategic objectives
•  Companies have difficulty finding measures of value for
their HCM investments
•  Budget pressures force companies to reduce or
eliminate HCM investments
•  Companies have difficulty retaining top talent, even in
slow or down markets
Challenges in Human Capital Management
Source: American Society of Quality as cited in Reinventing Talent Management, Schiemann, 2009,
pgs. 10 – 11.

Less than 16% of CFOs in one study were satisfied with
information related to Human Capital Management
HCM Information Management
Source: Society for Human Resource Management Foundation, Employee Engagement and
Commitment, Effective Practice Guidelines, 2006. Table: Edward E. Lawler III, Talent: Making
People Your Competitive Advantage, Jossey-Bass, 2008.
Information Effectiveness Effective or Very Effective
Connecting human capital practices to
organizational performance
9.1%
Assessing and improving the human capital
strategy of the company
27.6%
Contributing to decisions about business
strategy and human capital management
27.2%
Identifying where talent has the greatest
potential for strategic impact
24.2%

•  Evolving role of Finance
•  Globalization
•  Dynamic labor markets
•  Changing business models
•  Workforce diversity
•  Leadership gaps
Trends Impacting HCM in Finance

As Finance Evolves, HCM Demands Change
Traditional
§  Manager: Facilitates the efficient operation of
finance
§  Controller: Manages risk consistent with
corporate strategy
Expanded
§  Strategist: Partners with its business to
develop and enable strategy
§  Catalyst: Drives change in the organization to
enable efficient growth

•  Workforce diversity is a major trend in
the Finance organization
•  Managers can no longer manage by
“walking about”. More emphasis is
needed on virtual relationships and
performance metrics.
•  Globalization is a core component of
Finance strategy for many
organizations. Consequently,
managing diverse workforces is now a
required competency for Finance
managers.
Eﬀec%ve HCM Incorporates a Global Perspec%ve

Organization
Development

Defining Organization Development
"Organization development is a system-wide application of
behavioral science knowledge to the planned development and
reinforcement of organizational strategies, structures, and
processes for improving an organization's effectiveness.“
Cummings and Worley, "Organization Development and Change", Sixth Edition, South-Western Publishing,
1997, p.2.

•  It is a systematic method for gathering data about how
organizations function as social systems and an
analysis of the meaning of those data.
•  The OD practitioners job is to search for causes and
consequences of organizational functioning.
•  Process:
Ø  Diagnosis/Discovery
Ø  Intervention/Implementation
Ø  Evaluation
Source: Sharon Glazer, Ph.D., San Jose State University
Defining Organization Development

Managing the OD Process
Three basic components of OD programs:
Diagnosis /
Discovery
Information collection about
organizations, departments, and
processes with the goal of
identifying improvement areas
Intervention /
Implementation
All activities and interventions
designed to improve the
organization’s functioning
Evaluation Collecting and evaluating
information on the effectiveness of
the intervention

Key Elements of Organization Development
•  Visioning
•  Organizational Transformation
•  Organizational Culture
•  Learning Organization
•  Total Quality Management
•  Business Process Reengineering
•  Quality of Work Life

When is OD Useful?
•  To help diagnose individual or team issues
•  To facilitate new and existing development for groups or
individuals
•  To support individuals and groups in learning new skills
•  To support leadership development
•  To structure effective feedback and performance
management programs
•  When there is an organization design issue that require
assessment and diagnosis
•  To facilitate conflict management

Systems Theory in Organization Development
Organizations are open systems in active exchange with their environment
Environment
History
Resources
Culture
Input Output
Organization
Unit
Individual
Formal
Organization
Informal
Organization
People
Work

Systems Theory Should be Incorporated into OD
and Professional Development
•  Vision
•  Strategy
•  Corporate Governance
•  Organizational Structure
•  Processes
•  People & Competencies
•  Infrastructure (Technology, Applications & Data)
•  Culture

Categories of OD Interventions
•  Individual Interventions
•  Group Interventions
•  Organization Interventions
•  Global Interventions

Group Interventions
•  Visioning sessions
•  Strategic alignment assessment
•  Group diagnostic meetings
•  Responsibility charting
•  Force field analysis
•  Conflict management
•  Meeting facilitation

•  We are polite, we are cautious, we are trying to get organized
•  We ask ourselves, “How do I belong to this group?”
•  Issues, irritations, and problems surface, infighting
•  We argue even when we agree
•  Power issues “who’s in control” and “how is control
exercised”
•  We talk openly about our problems and issues
•  We set new “ground rules”, processes and procedures to
resolve them
•  Our ground rules and processes are working
•  We work together, we co-operate, we support each other
•  We meet our high standards of performance
Forming
Storming
Norming
Performing
Stages of Team Development

Effective Teams are Characterized by:
•  A clear mission and action plan
•  An informal, comfortable atmosphere
•  Open communication
•  Full participation
•  Civil disagreement
•  Clear role expectations
•  Healthy external relationships (to other organizational groups)
•  Acceptance of style diversity
Source: Beitler, Michael, Strategic Organizational Change, Practitioner Press
International, 2006, pg. 140

Organization Interventions
•  Mission, Vision & Values
Development
•  Organization Design
•  Organizational Learning
•  Cultural Change
•  Accountability and Reward Systems
•  Diversity Training

Global Interventions
•  Virtual Team Building
•  Cross-cultural Training
•  Rotational Job Assignments

Transforming the
Finance Professional

My main job was developing
talent. I was a gardener providing
water and other nourishment to
our top 750 people.
- Jack Welch, former GE CEO

•  A clear, agreed-upon vision and strategy
•  Translation of the vision and strategy into clear organizational and
unit measures
•  Cascading and communicating the strategy and goals
•  Meaningful individual goals and roles
•  Rational acceptance of the strategy and goals among implementers
•  Clear, timely feedback on goal attainment and the drivers of those
goals
•  Strong internal customer service and collaboration
•  Meaningful rewards that reinforce strategically aligned behaviors
•  Culture alignment
Employee Development Focuses on Alignment &
Competencies
Source: Reinventing Talent Management, Schiemann, 2009, pg. 112.

Aligns employee with vision and strategy
Develops required competencies
Aligns employee behaviors with corporate
goals
Motivates employee alignment with corporate
goals
On-Boarding
Training
Performance
Management
Compensation &
Rewards
The Human Capital Management Process
Manages employee departuresSeparation

Align employee with vision and strategyOn-Boarding
v First opportunity to create alignment with the vision and
strategy
v Sets the tone for the employee’s career at the company
v Communicate key messages around organizational
direction, values, and expectations
v Explain organizational chart and key liaisons with other
stakeholder groups
v Have work area ready: Workspace, Network Access,
Building Access

Develops required competenciesTraining
v Develop training plan that aligns competencies with
individual and organizational goals
v Ideal mix is a combination of formal instruction and
actual experience
v Training should cover both hard and soft skills
v Leading companies use formal rotation programs to
develop Finance talent (e.g. GE)

Aligns employee behaviors with corporate
goals
Performance
Management
v The ability to manage performance effectively often differentiates
leading companies from average companies
v An effective performance management system should define the
performance that is actually required.
v It should align individual goals with departmental and corporate goals
v It should guide employees to identify the skills and knowledge required
to perform effectively
v It should provide an incentive framework to motivate performance
v It should provide feedback to HR for annual performance ratings

Motivates employee alignment with corporate
goals
Compensation &
Rewards
v Effectively combine both financial and non-financial rewards
(extrinsic and intrinsic)
v Although it may seem obvious, rewards should align with and
reinforce desired behaviors
v Intrinsic rewards include additional responsibilities and visibility,
and job rotations
v Extrinsic rewards include promotions, base pay, bonuses, stock
grants, etc.
v Extrinsic rewards tend to be a short-term motivator while
intrinsic rewards typically motivate over the long-term

Individual Interventions
•  Coaching / Mentoring
•  Training & Development
•  On the Job Training
•  Leadership Training
•  360° Feedback
•  Job Redesign
•  Conflict Management

Coaching / Mentoring
Coaching
•  Often targeted at executives with the goal of modifying a specific
behavior
•  Can involve the use of an outside consultant to provide objective
feedback
Mentoring
•  A broad-based program that focuses on pairing up employees with an
individual higher up the organizational ladder
•  Can be an effective mechanism to acclimate new employees to an
organization
•  Senior leadership must publically support the mentoring program if it
is to be taken seriously

•  Assist in navigating the organization and building professional
networks
•  Communicate clearly and often
•  Be available for information discussions
•  Provide frequent and relevant feedback
•  Identify opportunities for further professional development
•  Work to get employees recognition for accomplishments
Mentoring Behaviors

Training & Development
•  A subset of Organization Development but often the
most visible component.
•  Virtual training can be effective if executed properly.
•  Training, whether physical or virtual, should be followed
with opportunities to practice newly learned skills
•  Peer-to-peer training is acceptable as a part of a
broader training curriculum if standards and materials
are in place to ensure consistent training

On The Job Training
•  Any OJT program implemented should have a strong
Champion/Sponsor
•  A framework for OJT should be developed and followed to
ensure consistent training
•  Trainers chosen should have the knowledge, the
communication skills and the willingness to transfer
knowledge to another employee
•  Ideally these trainers will have formal training in teaching
and coaching
•  Job shadowing, where a new employee follows an
experienced employee around, can be an effective means
for knowledge transfer

Leadership Training
•  Inadequate leadership is often the cause for ineffective
execution of transformation initiatives
•  Key leaders should be identified and cultivated through formal
training and key assignments
•  Leadership opportunities should be provided to people early in
their careers
•  Assignments should support formal leadership training

360° Feedback
•  Provides feedback to managers that cannot be obtained through the
traditional performance review process
•  Surveys can be generic (“off-the-shelf”), designed specifically for your
organization, or a combination of the two
•  The 360 survey measures behaviors and competencies
•  Establish specific competencies for expected and superior
performance by level and position
•  Typically occurs through an anonymous survey conducted by an
outside firm to ensure confidentiality

•  Employees that receive timely, frequent and
relevant feedback perform better than those
who do not.
•  The feedback process should combine both
formal and informal feedback.
•  Should be positive and constructive.
•  Effective feedback is very issue specific.
•  Managers need to be direct without being
confrontational.
•  Don’t wait until the end of the performance
year. No “Management by Surprise”.
Feedback is Essential to Human Capital
Management
Source: E.A. Locke and G.P. Latham, A Theory of Goal Setting and Task Performance, 1990
1

Job Redesign
•  Job redesign as an individual intervention is based on Systems
Thinking
•  As companies and department needs evolve, individual positions and
their responsibilities may need to be redesigned to create greater
alignment with corporate objectives.
•  Goals: alignment, reduced turnover, enhanced productivity
•  Key aspects of the design should include not only the specific
activities conducted, but also include a review of the governance,
policies and procedures, and the information flows related to the
position.

Conflict Management
•  Focus is on minimizing conflict, not
eliminating it
•  Identify nature of conflict. The
“obvious” reason may not be the real
reason.
•  Clarify behavioral expectations for all
team members
•  Focus on issues, not personalities
•  It may be necessary to remove
disruptive individuals from the team
•  Model the behavior that you expect

Ques%ons

Stephen G. Lynch
Contact Information:
Office: +1.719.481.2599
Toll-free (North America): 1.800.216.2512
On the Web: www.globalfinance360.com
www.stephenglynch.com
Email: steve@globalfinance360.com

Session 4 - Transforming the Finance Professional

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