Management » It’s time for financial directors to become restructuring leaders

It's time for financial directors to become restructuring leaders

The role that the finance department plays within a company is ever-changing, and restructuring is simply part of the job. How can financial directors and CFOs successfully lead their teams through any restructuring? 

While it can be a daunting concept, restructuring is a part of corporate life. The goals of a business change over time, and its only logical that finance departments should change with it. 

However, restructuring can be a confusing and worrying time for employees. In these instances, financial directors and CFOs need to hone their soft skills and demonstrate their leadership capabilities to reassure and bolster the team. 

When introducing a restructuring plan into your finance department, there are several things that leadership can do to help ensure a smooth, successful transition.

1. Keep an open line of dialogue

James Carfell, the HR manager for MWB Solutions, helped oversee the firm’s latest finance team restructuring, and has seen how important open dialogue is with employees.  

“The first step was to ensure there was complete transparency with staff, so they knew what we were hoping to achieve, how this would affect them, but most importantly, that their jobs were safe,” Carfell explained. 

Job security is a sensitive topic for many employees, particularly those who are financially insecure. Including the department as a whole in restructuring-focused discussions can help alleviate concerns and offer employees a sense of responsibility within the plan. 

“Whenever there is a restructure, the staff involved often have great ideas or input on how the process could be enhanced or improved,” Carfell continued. “Therefore, it is a great opportunity to hear back from the staff and see whether you can get a few tasks done at once.” 

2. Create a thorough plan

Before any restructuring takes place, department leaders also need to work with their human resource representatives to create a thorough employee plan, on top of their official restructuring plan. 

Jenny Oldfield, the Chief Executive Officer of virtual credit control business Veritas Commercial Services, said that leadership should have concrete objectives and a mapped-out best practice process before any restructuring takes place. 

“Part of this process must include a thorough assessment of existing policy, process, people and IT, to identify what works and what doesn’t,” Oldfield explained. 

From the corporate level, restructuring might seem like a no-brainer, but employees outside of the planning team may not understand why any change is needed. As such, once a concrete restructuring plan has been created, financial team leaders should inform their staff about what changes will be taking place, their roles in the plan, and what to expect throughout the restructuring process. 

“Speak to them all as quickly as possible, but in a formal manner, such as a presentation or a team meeting, to discuss exactly what is happening,” Carfell advised. “You need to offer reassurance, as the aim is not to have them worried, but actually to have them excited about the investment in their team and the work.”

3. Weigh all the options before outsourcing 

While outsourcing can be financially beneficial, it is not the right option for every department. Before committing to the idea, consider how your team would work with colleagues in a different time zone—a threehour time difference might be surmountable, but a sixhour difference may affect the team’s productivity. 

Alternatively, time zones can help bolster your department’s output, as employees are covering more working hours. However, financial leaders need to first understand their employees’ skills to fully see how outsourcing can benefit the team. 

This is particularly timely, as Oldfield believes technology will continue to transform how employees work, particularly in regard to out-of-office work. 

Oldfield explained: “The adoption of cloud-based networking solutions and apps are allowing work to be done away from business premises, presenting new opportunities for outsourcing. 

“For example, credit control is a function that can be outsourced. This will pinpoint any issues preventing sales ledger best performance, help tighten up on payment terms and encourage prompt billing. 

4. Introduce technology where available

As effective as outsourcing can be, robotic process automation (RPA) is gaining leverage over it within financial services. A 2018 KPMG report showed that while as a whole, firms decreased their outsourcing investments, they increased RPA investment.

Rather than becoming a replacement for employees, technology can take over the employees’ low-level or mundane work—allowing the team to take on bigger, more important projects that add value, and bolster the department’s output. 

However, before taking the plunge on any technology, Carfell suggests that leaders speak with their team about the changes, continuing the aforementioned dialogue. 

“Considering the cost of introducing new technology or tools, it is important you get the team onboard, using it on a regular basis and with a complete understanding of the extent it will benefit them,” Carfell said. 

“Without sufficient training, they will revert back to their old systems or will remain reluctant to changeBut, it is also important to remember this training shouldn’t just be a one-off at the start, it should be continuous.” 

5. Seek out upskilling opportunities

Although technology and outsourcing both offer valid solutions for restructuring, it is important to provide opportunities for current employees to stay within the company, where appropriate. 

For example, in-house training opportunities can be a cost-effective way to upskill the company’s current talent and broaden their abilities, and can potentially limit how many employees need to be cut from the team. 

Although restructuring often requires a modicum of staff downsizing, Catherine Birkett, the CFO of GoCardless, sees correctly-skilled employees as the key to successful finance department restructure. 

Birkett explained: “Because the role of finance has changed significantly over the past 20 years, teams that are fit for the future will move away from those heavy in tax and technical specialists, to those that can analyse large data sets, spot trends and forecast; from manual processes which are now increasingly automated, such as bookkeeping, to ‘value-add’ activities such as FP&A (financial planning and analysis). 

“Finance teams oriented around these skills and ways of working will be a huge asset to any business as they take on big, strategic decisions.” 

6. Be the cheerleader, but be honest

As a leader within the finance department, your employees should feel comfortable enough to come directly to you with any concerns. The initial stages of restructuring may be challenging and confusing, but they present an opportunity to reconnect with employees and demonstrate your leadership skills. 

Ultimately, there is little to be gained from fibbing to employees about the future of their job. If their role is being downsized, tell them ahead of their layoff date, and offer to write a letter of recommendation before their last day. Support any lower-level employees who are facing unemployment, even if they fall several rungs below management on the corporate ladder. 

At the end of the day, the actions that leadership takes can make or break the effectiveness of a restructuring planBy stepping out of the office and creating a dialogue with the wider financial team, ‘restructuring’ can go from a fear-inducing word to an opportunity for growth. 

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