Financial transformation

A programme manager we spoke to, who wished to remain anonymous, said: “sponsorship is an overused term and an underused activity”.

It’s almost a truism to say that successful finance transformations depend on top-level sponsorship. A research report by the Project Management Institute, Executive Sponsor Engagement (2014), argues that engaged executive sponsors are the top driver of programme success. Indeed Adrian Ryan, an experienced finance transformation lead (FTL) who is helping ICAEW with its thinking on finance transformation, says: “If you do not have good top-level sponsorship, panic! You will not be successful.” And yet we still hear of many cases where sponsorship is ineffective. In some instances this may be because of sponsors heading for cover when a finance transformation programme looks to be doomed to failure or FTLs seem to be passing the buck. But we believe more often the problems relate to a lack of clarity of what is required, the capability and attitude of the sponsor and the need for more effective ‘managing upwards’.

FTLs generally don’t get to choose their sponsor, usually the CFO, but establishing a good relationship is a must. In this article we offer advice on how an FTL can make the best of the hand they have been dealt.

Early conversations between the programme sponsor and the FTL help build the relationship and clarify role expectations, which is essential to avoiding misunderstandings. Some organisations will have documented project roles that can provide a start point – although these can be open to interpretation. The exact responsibilities will vary depending on circumstances and the relative capabilities of sponsor and FTL. However, as an FTL you should be looking to gain understanding and agreement on:

• programme sponsorship as a visible leadership role and with a requirement to get hands-on if things go off track;
• the programme’s objectives, approach and success criteria and how these fit with the organisation’s strategy and the other priorities;
• the need for the sponsor to champion the programme across the organisation, overcome roadblocks (both those within finance and elsewhere) and to motivate the team, particularly if times get tough;
• how progress and issues will be fed back; and
• how the programme steering committee will be chaired and managed.

Andy Shambrook, who heads a range of ICAEW’s Academy courses, adds: “Sponsorship doesn’t happen in the steering meeting looking at PowerPoint. It happens on the ground, talking regularly to the project teams implementing the changes, listening to their point of view and seeing things from their perspective. Finding their pain points and taking action to make things better.”

Ideally the programme sponsor will be an excellent leader and communicator, with the power and influencing skills to maintain stakeholder commitment and blessed with keen judgement to make the right decisions quickly and intervene only when necessary. Successful CFOs may indeed embody these qualities. However, if they do not, the FTL needs to consider ways of compensating for any weaknesses. The following possibilities are valuable even with a strong sponsor but can be prioritised based on need.

• Find an influential mentor who can help provide support and advice, particularly on making difficult judgement calls and dealing with stakeholders.
• Build your own relationships with executive stakeholders and their influential team members.
• If you are using consultants make use of the person in the firm who has overall responsibility for the engagement (if you think they are up to it maybe they can operate as a coach to the sponsor).
• Develop your own presentation skills or find people in your team with such skills.
• Maximise the use of internal communication channels to promote the project and its successes.
• Use formal and informal information systems to help steer decisions.

As an FTL it is important to put yourself in the project sponsors’ shoes and see things from their perspective. In particular CFO sponsors have many responsibilities and demands to juggle, so the FTL has to make every effort to ensure the sponsor’s time and energy is put to best use. The FTL should seek to build an excellent working relationship with the sponsor and make it easy for them to fulfil their responsibilities.

Managing expectations and minimising the number of surprises (negative ones at least) are at the heart of effective upwards management. As mentioned effective feedback mechanisms, both formal and informal, are essential. These should be designed to monitor programme risks and highlight issues around delays, overdue decisions, resourcing, team morale and cost overruns. However, even well informed sponsors may not know when it is best to intervene. For the FTL it can be difficult to judge when to ask for help. Too early and too often and you end up being seen as incompetent and risk not getting help when you really need it. Too late and the position may be difficult to recover.

Meeting preparation is another key area. First of all bear in mind that many important decisions are effectively made before formal steering committee meetings. One effective programme manager we know invested a lot of time speaking one-to-one with every committee member before each meeting. Not only did this build consensus, but it also avoided any nasty surprises at the meeting. The last thing a CFO wants is to be thrown a hospital pass he or she can’t deal with in a forum with influential stakeholders. Clear agendas and meeting objectives coupled with concise minutes and action points with responsibilities help ensure the best use of everyone’s time.

Having said all of this, it does not mean letting the sponsor off the hook when there are hard things they need to do, such as dealing with conflict that threatens the success of the programme. Deloitte’s 2011 report, 'Don’t quote me on this: Finance transformation leaders – on the line and off the record', quotes an FTL saying: “Just expect your sponsor to be weak; shut down their escape routes so they can’t get away.”

Adrian Ryan advises: “You should manage your sponsor much like you would manage your life partner relationship. There has to be mutual respect, trust and above all openness and a frank exchange of views. The occasional tiff is fine if it is resolved productively; in fact this can be very creative."

Sometimes no matter how effective you are as an FTL, finance transformation programmes can go off the rails. If you fear this is happening, get to the root cause to work out what action to take. It may not be to do with poor sponsorship and you should take care not to leap to this conclusion. Maybe there was a flaw in the initial business case or operating model which neither you nor the sponsor spotted. Maybe business circumstances have changed significantly. So it may be that you and the sponsor need to step back, regroup and plot a way forward together.

However, as argued earlier, ineffective programme sponsorship is a recognised cause of programme failure. You will know if this is the problem based on how your relationship with the sponsor is going, but it may be worth checking with someone you trust to get a candid second opinion. Maybe sponsorship was an issue from the outset. Warning signs that it’s becoming an issue include sponsors distancing themselves from the programme, making snide comments about the programme, missing steering committees and cancelling programme-related meetings.

If you can’t resolve the issues through discussions with the sponsor, what are the options? It’s important you continue to do, and are seen to be doing, everything you can to make the best of things. In particular take advantage of any wins you can realise despite the lack of support. Consider re-scoping the programme towards something more achievable. Perseverance will not be easy and it is important you pay attention to managing your health and using your support network. Escalation to the CEO or other executives is a high-risk option unless they are coming to realise the sponsor is not up to their job and needs to be replaced. Ultimately you may have to cut your losses and look for another job, either within the organisation or elsewhere. Finance transformation experience seems to be in high demand.

Having a successful finance transformation under your belt and a great working relationship with a CFO sponsor can only be beneficial for your career. Make sure you continue to nurture the relationship after you leave the programme.

• Financial transformation
  Business & Management magazine, Issue 254, May 2017, p.24-25

The ICAEW Library & Information Service provides full text access to leading business, finance and management journals. Further reading on getting executive sponsorship for transformation projects is available through the articles below.