The CFO'S Perspective

A CEO Guide to Change Management for Financial Processes (and Financial Teams)


Change comes more from managing the journey than from announcing the destination.”  -  William Bridges

Change can be hard to navigate under the best of circumstances. When things aren't right within the financial arena, it can unknowingly create a delicate situation. CEOs should tread lightly, and yet, must still be effective leaders.

The inclination of many CEOs is to assume that because financial teams tend to be more analytical than, for instance, a marketing team, they can make changes without understanding the potential ramifications. This may not be the case. Here are some best practices for navigating change in your financial waters.

Step One: Identify the Area that is Changing or Needs to Change

Some areas of your organization are going to change organically, and others need to change if your company is going to meet its goals and ultimately survive. In some cases, you, your team, and even the public have seen the writing on the wall for some time, and in others, the departure of a key staff member comes as a complete shock.

On January 30th, Tesla CFO Deepak Ahuja stunned the public and Wall Street when he announced his retirement at the tail end of the company's earnings call. Even though an explanation was given and this was Ahuja's second run as the company's CFO, it's highly unusual to make a sudden announcement like this, and the company's share price plunged the next day.

Whether Tesla's CFO announcement is going to push back the delivery date for your Model 3 or result in cheaper solar energy for the world will remain a mystery for now. What's clear is that someone decided that a change was in order.

So, how can you identify that a change is needed? In truth, most businesses experience at least one of these situations at some point in their lifecycle.

  • Scaling up. The company is experiencing a growth spurt or plans to expand. This means that they will be outgrowing their systems, processes, and people. It may have never had a CFO or controller and needs one now.

  • CFO is leaving. As with Tesla, the CFO decides that it's time to leave - or someone decides for them. This is becoming more common as the role of the CFO is shifting to be increasingly strategic. If this is not a priority that the CFO is accustomed to, it could necessitate change.

  • Cash flow management issues. If your CFO forgets the "F" in their role, this can lead to disaster. When vendors start calling, or you miss a key filing, getting the right people in place becomes vital.

  • Major deal on the horizon. If your firm wants to put the company up for sale or acquire another one, this makes it essential to have key financial management working strategically long before initiating a transaction.

Step Two: Assess Your Resources - People, Processes, & Systems

What got you here won't get you there." - Marshall Goldsmith

The old adage that tells leaders to find something that works and keep doing it has a flawed assumption. You see, the world doesn't exist in a vacuum. In other words, things change, and those who are nimble enough to innovate have the best chance at success.

So, you realize that either your company is changing or that it needs to change for any number of reasons. Before making any sudden moves, one of the first things you should do is gather as much information as possible. This means that you want to do a thorough assessment of your people, processes, and systems.

  • Your people. When it comes to your financial team, ask yourself the following questions.
    • Do you have enough staff? In some cases, you might have plenty of people on board, but they just aren't being utilized properly.
    • Does your staff have the right skill sets? Ask yourself this question for your current needs as well as for those in 1 to 5 years.
    • Is the balance of skill sets the right mix?
  • Your processes. How your financial team works is just as important as who is doing the job. Evaluate this with the answers to these questions.
    • Are your internal control processes documented?
    • Do your processes cover all of the necessary monthly data, reports, and deadline requirements?
    • Is the entire team trained on your company's financial processes?
  • Your systems. As you upgrade your financial team, either by necessity or choice, it's also a good time to consider upgrades to your systems. Assess these resources by asking these questions.
    • Are your systems robust enough to handle your current state?
    • What are the system requirements for your company's future or desired state?

Step Three: Address Your Financial Team Effectively

When you address change, you are essentially looking for a way to effectively manage it. Getting in front of organizational transformations is tough. Ask five CEOs to name the critical factor for success in managing change, and you'll probably receive five different answers. That's because each manager looks at the change from their own viewpoint and might focus on different success factors.

The experts also offer a host of opinions on this topic. A search on for books on "management and change" brings up more than 20,000 titles, each with a distinct angle on the topic.

All that being said, how can you effectively address your financial team during a transitional period? It turns out that a mixture of hard and soft factors can make a tremendous difference in reducing the turmoil of change and creating a smooth changeover.

  • Pay attention to your demeanor.

    • Project confidence. As a CEO or other business leader, one of your jobs is to be enthusiastic about change, even if this wasn't on your roadmap. When the financial team senses this confidence, it will become contagious.

    • Be transparent. Be willing to lay your cards on the table with your financial team. They will know if you are holding back important information and this will erode their trust.
  • Be strategic in how you participate.

    • Take swift action. Dragging out a transition is generally not a good idea. If you know that you need a full-time CFO or controller, it would be a mistake to ask others to fill the void indefinitely. This creates unease within the ranks. The sooner you can make a change, the better.

    • Get buy-in. You have the best chance of establishing or maintaining financial integrity if you have buy-in from the rest of your financial team. Consider involving them in this transition process so that they feel more invested in its success.

    • Get out of the weeds. Once you have set clear expectations and given your financial team the resources to do the job, get out of the way and let them do it.

    • Remain flexible. There may be more than one way to achieve your goals. Remain flexible during this process.

Step Four: Seek Outside Help

Running and growing a business is hard enough. Chances are, you've sacrificed plenty to get your company to its current level, but you know that you didn't get there alone. Along the way, you've built a management team that helps you make sound business decisions and stay in compliance with various rules and regulations.

Losing a CFO or other key finance team members can be stressful. It can have a profound impact on you, your business, and company morale. Fortunately, there are plenty of outside resources that can help make sense of these changes as well as expedite and ease this transition.

  • Take advantage of your resources.

    • Executive peer groups. If you belong to a CEO peer group, ask other trusted executives to share their experiences with change management for financial processes.

    • Executive coach. An executive coach can provide similar guidance and even some deeper insight into the dynamics of this change.

    • Advisory board. If you have an advisory board, this is another source of valuable, but non-binding, strategic advice for your business.
  • Use alternative resources.

    • Interim, part-time, or project CFO, controller, accountant, bookkeeper. Bring in a seasoned executive to act as an interim manager while you evaluate your situation and/or conduct a search for a permanent replacement.

    • Full-time CFO, controller, accountant, bookkeeper. Tap into your resources to find the perfect candidate for a full-time replacement.

When you encounter situations where things just aren't adding up or don't seem quite right, it may be time to make a change. Following these steps can help you manage that change and achieve greater confidence in your financial statements, improve your cash flow, upgrade to new systems, or complete the sale or purchase of a business.

CFO Selections can help you with interim, part-time or project-oriented CFOs and controllers. We can also help you with a search for new talent in these roles. For more information, you can contact us here

About the Author

Mark-TranterMark Tranter leads the business development and marketing efforts at CFO Selections®, which he joined in 2006 after co-owning a successful executive search firm. He organizes, hosts, and attends a large number of networking events, ranging from one-on-one meetings to roundtables, seminars, and forums.

In this role Mark speaks with many business owners and executives who guide their organizations through transitions and transactions

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Topics: Leadership, Financial Process, Change Management

Topics: Leadership Financial Process Change Management