No Longer Just the ‘Numbers Guys’
Rodney Bergman and Rosanne Williams
JUNE 2008 -
Any CFO will acknowledge that the days when the corporate finance
organization was home to the “numbers guys” are long
passed. Today, senior management depends on its finance team for
guidance on key corporate initiatives such as capital investments,
outsourcing, major technology implementations, and business strategy.
Consequently, finance is now viewed as one of the three most important
workforces in virtually any company, according to recent research
conducted by Accenture.
those expectations comes with challenges that, according to the
research, can be attributed largely to underinvestment in the
finance workforce. Although finance leaders recognize the finance
workforce’s importance in helping a company achieve high
performance, the investment in finance tends to be surprisingly
small—often less than 2% of budgets, according to the Accenture
study. Unfortunately, when companies make a more significant investment
in their finance organization, they tend not to take a comprehensive
approach but rather focus on a few “hot spots.” Generally,
the initiatives that the authors find at companies deal with discrete
aspects of the workforce, such as staff commitment and performance
feedback. Unfortunately, these initiatives tend to have little
to do with leadership, recruitment, or staff training. The result:
Many finance executives believe they lack the organization, staff,
or skills to meet their challenges.
such circumstances are prevalent, high-performing organizations
are making an appropriate investment in both skills and capabilities.
The Accenture study found that “finance leaders” believe
they realize more benefit from their transformation programs and
better returns on their workforce investments, and that they achieve
a generally high level of performance. This comes in the face
of research findings which show that corporate leaders are mindful
of their responsibility to generate as much shareholder value
as possible from building their financial performance. In ranking
the functions most critical to achieving high performance, finance
tied with strategic planning as one of the top three functions—just
behind customer service and sales.
also found that finance executives believe that the skills and
capabilities of their workforce are among the most important factors
in achieving high-performance finance—more so than efficient
processes, appropriate tools and technology, or an effective strategy.
used to be narrowly focused on the management and containment
of expenditures, the timely collection of revenue, compliance
with regulatory statutes, and the accurate reporting of financial
results to shareholders and analysts. Over time, however, their
role has changed, and the finance team has become increasingly
responsible for the success of the corporation’s transformation
programs. Finance also is expected to advise top management on
such growth-related matters as mergers and acquisitions, product-line
changes, organizational restructurings, and geographical expansions.
and senior finance management have invested heavily in new technologies
and business processes to support this greater role, they have
largely overlooked the need to simultaneously upgrade and enhance
the workforce. Without the advent of new skills, new training
and, in some cases, new people, finance leaders can find themselves
in charge of a function that falls short of performance expectations.
is an expectation that we in finance someday will be business
leaders,” said one CFO interviewed in connection with the
study. “So beyond the basic technical skills, the educational
background and so on, you also need skills in change leadership
and in performance management. We are ensuring that the people
we’re putting in positions now in our finance and accounting
organization are going to drive our long-term performance. Whereas
10 years ago, if you were a great finance mind, you were just
going to keep moving up. It takes more than that now—I’m
not promoting anybody to a VP position who isn’t also a
proven organizational leader.”
many of the finance leaders surveyed do not see the increasingly
mission-critical finance function achieving high performance.
Less than 20% of all respondents and just 13% of CEOs who named
finance a top-three function said it performs at a high level.
research has found that most finance leaders do not believe they
have the people with the skills needed to meet the challenges.
Most say their workforce initiatives are inadequately developed
or insufficiently applied, and only one-third are satisfied with
those initiatives. Executives report facing such specific challenges
as recruitment, retention, leadership development, and adaptability
to change—in short, the entire employee lifecycle.
the survey of finance executives found that:
than 60% described their staff recruitment strategies as inadequately
than 50% said finding qualified finance staff is a challenge.
than 25% were satisfied with their recruitment and development
than 60% were dissatisfied or only somewhat satisfied with their
than 50% said their departments adapt well to change, and even
less believe they anticipate it well.
half believed that their top leaders work well together, and
less gave a high rating to the team’s overall quality.
One CFO said:
“We recognize that we are not doing what’s needed
to get deep ranks in the finance organization and that our line
of succession is very thin. … We know we need to dig in
on these issues.”
believe this is where the inherent conflict comes in: While most
finance executives participating in the study agreed that the
workforce is more important than technology and process for creating
a strong finance organization, these same executives allocate
relatively few resources to the workforce, as compared to their
investments in technology and process enhancements.
one-third of those surveyed reported spending 2% or less of their
investment budgets on workforce improvement. These investments
continue to be largely ignored during such company-wide transformations
as enterprise resource planning (ERP) implementations, outsourcing,
and post-merger integrations. (Nearly 40% of respondents reported
either minor or no investment in workforce improvement at these
one respondent who invested significantly in the finance workforce
during a major transformation said: “We would be in a very
marginalized position … instead, we are enjoying a great
degree of success and our people are optimistic. We often think
of what would have happened if we had not invested in the workforce—I
believe that we would be in a big hole and trying to dig ourselves
out of it.”
has also revealed serious gaps in initiatives intended to make
finance workforces capable of achieving high performance. For
- 40% of
respondents do not have leadership initiatives in place.
- 81% have
staff development initiatives in place for only half of their
employees, and nearly 61% have them for one-quarter or less
of their employees.
- 66% have
training initiatives in place for less than half of their employees,
and just over one in three companies have initiatives to develop
employees’ ability to respond to change.
conclusion of the authors’ research is that moving from
“talking the talk” to “walking the talk”
requires finance executives to take a much more comprehensive
approach to workforce investment. They also should consider making
improvements in workforce productivity and service to the organization
as essential as technology enhancements. About 30% of companies—the
“finance leaders”—already do this for reporting
skills that are equal to or better than those of competitors in
three or four key aspects of the finance function. These leaders
spend more of their budgets on workforce development and take
a much more comprehensive approach toward that investment.
31% of these leaders spend a minimum of 5% of their budgets on
workforce-oriented activities, compared to only 19% of the “laggards.”
Similarly, while less than half the laggards said they had strategies
to address four out of the six basic aspects of workforce development—leadership
acquisition and development, organizational structure, talent
management, workforce performance, employee engagement, and change
management—the majority of leaders had strategies in place
for all six.
approach to workforce performance can reduce costs while increasing
productivity. Consequently, an organization can attract employees
with higher levels of proficiency, decrease the time it takes
employees to gain additional skills and knowledge, retain top
performers, and put in place performance management processes
that result in continuous improvement and higher performance.
workforce initiatives can be particularly important at key moments
in an organization’s lifecycle, such as during a change
in leadership or strategy, a merger or acquisition, a systems
consolidation or ERP implementation, or even a period of increased
regulatory oversight. In addition to helping win employees over
to the organization’s new focus, goals, and procedures,
comprehensive workforce initiatives help employees develop the
skills they need to adapt, and ensure that change does not result
in the loss of top talent. For
companies implementing new enterprise performance management (EPM)
toolsets, workforce initiatives can help the people who will use
the new tools acquire the required skills and business acumen.
During a post-merger acquisition, workforce initiatives can also
provide that skills from the old and new organizations complement
each other and align for maximum benefit.
report that they feel much better equipped to face the challenges
that affect their ability to perform at a high level, and are
less likely to report feeling extremely challenged by the following:
“number or caliber of managers/leaders,” “organizational
structure/job definition and alignment,” “skills and
knowledge of workforce,” “employee engagement, morale,
and commitment,” and “workforce adaptability to change.”
Nearly 60% of leaders reported having finance leadership teams
that are very capable of delivering high levels of performance,
compared to only 34% of the laggards.
holds true for attracting and developing skilled staff. While
nearly one in four laggards reported difficulty attracting and
growing talented staff, less than one in 10 leaders reported the
same difficulty. Furthermore, when it came to preparing for change,
taking a more comprehensive approach also paid dividends.
the companies that invested significantly in workforce initiatives
during transformation programs achieved a greater percentage of
expected benefits than those that did not. This was found in terms
of their control environment; the service provided by finance
to the rest of the organization; operational efficiency; and data
quality, speed, and access.
the authors have observed that CFOs’ approaches differed
in terms of how they implement change to maximize an investment
in their workforce, each incorporated three basic steps: diagnosing
shortfalls in current workforce performance, establishing a target
state, and devising and implementing a comprehensive plan. What
distinguishes leading companies are the tools and expertise they
use to support these steps.
shortfalls. To help diagnose any shortfalls in finance
workforce performance, companies need to use a combination of
surveys, focus groups, and in-depth interviews with a wide range
of stakeholders to gain insights into the state of the finance
function, its desired capabilities, any differences from existing
capabilities, and how it can best support the overall organizational
goals. Going through this process also helps a company establish
and support clear, objective performance metrics that will allow
it to analyze the return on any workforce investments.
should focus on six key dimensions of workforce performance:
Has the company focused its efforts on the most important issues
to create a climate that attracts and retains top talent who
will help the function build strong, productive relationships
with the business? Accenture estimates that 15% to 20% of an
organization’s business performance is determined by the
quality of its leadership.
structure. This can enable finance workforces to better
align with the organization’s strategic direction, understand
how finance roles and leading practices can be integrated into
the function’s structure, and customize the basic organizational
structure that will deliver the specific finance capabilities
required. Optimal organization design has been shown to contribute
to lower cost, increased effectiveness, and improved focus on
higher value-added activities.
management. This ensures that the organization’s
workforce is “fit for purpose.” Even when it isn’t,
organizations with strong talent management know exactly where
the fit is off and can act quickly to resolve the situation.
The difference between a “right” and slightly “out
of balance” talent pool can mean as much as 15% to 20%
of the total labor cost for the finance organization.
performance. Driving high levels of workforce performance
through on-demand, role-based information delivery to employees
can help organizations achieve productivity increases of up
to 20%. Furthermore, by bridging skills gaps in the workforce
and elevating the performance of average workers, organizations
have been able to significantly reduce project failure and achieve
dramatic productivity increases, respectively.
engagement. A Gallup study has shown that 20.6 million
employees, or 15% of the U.S. workforce, are actively disengaged.
This leads to lower productivity, lower talent retention, and
high absenteeism, at a cost to the nation’s economy of
$328 billion. Conversely, almost nothing can stop a motivated
workforce armed with the tools and knowledge it needs to complete
its mission. Focusing on employee engagement can help finance
executives ensure that their workforces are motivated and not
distracted by organizational changes or career frustrations.
to change. Flexibility is critical in a changing business
environment. The alternative leaves workforces in disarray and
incapable of supporting continuous improvements and progress.
Research shows that only one in nine workgroups can effectively
manage change. By contrast, the creation of a change-ready culture
ensures that the finance organization is capable of implementing,
owning, developing, and sustaining the process and structural
changes required for attaining high performance.
targets. Data collected in the shortfall diagnosis
process should be synthesized, organized, and analyzed to provide
a clear, actionable picture of where gaps exist within each dimension.
The analysis should provide a view of where a finance workforce
falls short compared to industry benchmarks, key competitors and
peers, and the needs and desires expressed by shareholders. An
organization can then prioritize each opportunity for improvement
in terms of its value to the enterprise.
and implementing the plan. Creation of a detailed
action plan is necessary to improve each of the workforce dimensions
that have been diagnosed as deficient. Such a plan should classify
improvement opportunities into quick wins and long-term goals,
and should be explicit about the dependencies between each. The
ultimate goal should be developing superior capabilities in each
of the six workforce dimensions.
the comprehensive and holistic investment in the workforce does
not necessarily mean addressing all six dimensions simultaneously.
A company may already have sufficient capabilities in some areas
and opt to focus on the areas that are lacking. Or, it might look
for a substantial and immediate payback in one or two areas.
All-Important Human Component
At a time
when studies reveal that investment in the finance workforce remains
small, the good news is that finance leaders readily acknowledge
the importance of growing the skills and capabilities of their
people in the face of their function’s importance within
an organization. This conclusion is further bolstered by research
which shows that by making the appropriate investment—in
workforce skills and capabilities—high-performing organizations
have reaped tangible rewards in terms of greater benefits from
their transformation programs, better returns on their workforce
investments, and a higher level of performance.
Even in a
profession characterized by ratios, equations, and spreadsheets,
the human component is what is most important, because people
are most responsible for achieving superior financial results.
Companies that take a focused and comprehensive approach to developing
their financial workforce—using proven methods for implementing
cost-effective and targeted programs to strengthen any weaknesses—are
the ones most likely to achieve high performance.
Bergman is a senior executive in Accenture’s talent
and organization performance service line, and Rosanne Williams
is a senior executive in Accenture’s finance and performance
management service line.