Should you make changes in the first 100 days as a finance leader?
You arrive in your new role; you are keen to make your mark. Chances are you were recruited by the CEO to carry out some very specific things. You have a mandate to make changes, but how quickly should you enact it?
The first 100 days in the role will see you in the “fuzzy front end”. The time when you know what you are supposed to be doing, but you still don’t know everything about your new role and your new organisation.
A significant element of your first 100 days is learning about your new team, organisation and colleagues. You need to become familiar with the way things get done and the processes and systems the business uses. You will start forming your opinions and have a view of what needs to change. But should you implement anything?
The risks of making changes too soon
When a new finance leader takes charge of a role, it is natural for them to be enthusiastic and eager to make their mark. However, making changes too early in their tenure without proper evaluation and consideration can pose several dangers. Here are some potential risks:
Inadequate understanding: A new finance leader may lack a comprehensive understanding of the organization’s intricacies, including its culture, processes, and underlying financial systems. Making changes without fully grasping these aspects can lead to misguided decisions that may disrupt operations or create unintended consequences.
Resistance and morale issues: Introducing changes too quickly can create resistance among employees and teams who are accustomed to existing processes and systems. Sudden alterations without proper communication and buy-in can lead to employee frustration, resistance, and a decline in morale. It is crucial to consider the human element and manage change in a way that minimizes disruption and garners support.
Unintended consequences: Rushing into changes without a thorough evaluation of the potential impacts can lead to unintended consequences. Financial systems and processes are often interconnected, and altering one aspect can have ripple effects throughout the organization. It is important to conduct a diligent analysis of the potential risks and benefits, including the short-term and long-term impacts on various stakeholders.
Lack of data-driven decision-making: Making changes too early may limit the new finance leader’s ability to gather sufficient data and insights about the organization’s financial performance and challenges. Without a solid understanding of the current state, it becomes difficult to make informed decisions and implement effective changes. It is advisable for finance leaders to spend time gathering data, conducting thorough assessments, and engaging with key stakeholders before initiating significant changes.
Loss of credibility: Implementing changes too early without a solid foundation of knowledge and understanding can undermine the finance leader’s credibility and reputation. If the changes do not yield the expected results or cause disruptions, it can erode trust among staff and stakeholders. Building trust and credibility takes time, and rushing into changes can jeopardize that trust.
To mitigate these dangers, new finance leaders should prioritize building relationships, understanding the organization’s dynamics, and conducting a comprehensive analysis before implementing significant changes. It is essential to communicate transparently, involve key stakeholders, and take a measured approach to change management to increase the likelihood of success and minimize potential risks. So, how should you approach change in the first 100 days?
First, get your team on board with what needs to be fixed
I had a great discussion with Susana Serrano-Davey on the GrowCFO Show about how to effectively start communicating and setting the right strategy when taking on a new CFO role.
Susana outlined a 5-step approach for new CFOs:
1) Manage your ego and observe before making judgments,
2) Draw a “heat map” with your team to identify priorities,
3) Categorize issues into “stop the bleeding”, “low hanging fruit”, long-term challenges, and awareness items,
4) Start by tackling easy wins to build momentum, and
5) Continuously review progress and celebrate successes.
Drawing the heat map together gets buy-in from the team and ensures you’re focusing on the real issues. Prioritizing quick wins and consensus-building on tougher challenges sets you up for early wins. Regularly reviewing keeps everyone accountable and engaged in the long-term transformation.
Build momentum with some early, easy wins.
You have identified the “low-hanging fruit.” This is where you find the easy wins. Building momentum with easy wins is important for several reasons:
- Boosts confidence: Easy wins provide quick successes that boost the confidence and morale of the finance leader and their team. Achieving early victories establishes a positive mindset and reinforces the belief that the team can accomplish their goals. This confidence can be instrumental in tackling more complex challenges in the future.
- Demonstrates progress: Easy wins are tangible evidence of progress and forward momentum. They provide visible results that can be communicated to stakeholders, including senior management, employees, and external partners. Demonstrating progress early on helps build credibility and trust, instilling confidence in the finance leader’s abilities and their ability to drive change effectively.
- Generates support and buy-in: Easy wins can generate support and buy-in from key stakeholders. When people see positive outcomes and tangible benefits from early changes, they are more likely to embrace further initiatives and support the finance leader’s vision. Building support early on creates a foundation of backing that can be leveraged when more challenging decisions or changes are introduced.
- Overcomes resistance: Easy wins can help overcome initial resistance to change. People may be hesitant or resistant when faced with significant changes due to fear of the unknown or concerns about disruption. However, by starting with smaller, manageable changes that yield positive results, resistance can be minimized. Easy wins create a sense of familiarity and demonstrate that change can be positive and beneficial.
- Creates momentum and drives continuous improvement: Easy wins create positive momentum to propel the finance leader and their team forward. The sense of accomplishment and success motivates them to seek progress and tackle more significant challenges. It sets the stage for a culture of continuous improvement, where the team is inspired to identify and pursue further opportunities.
Building momentum with easy wins establishes a positive trajectory, builds confidence, generates support, and overcomes resistance. It sets the stage for future success by demonstrating progress, creating momentum, and fostering a culture of continuous improvement within the finance function and the broader organization.
Research supports this approach.
Dan Ciampa, a leadership counsellor and Michael Watkins, who is a professor at Harvard Business School wrote the book “Right From The Start” which reports on their research into executives who faced the challenge of being brought into new organizations expected to succeed the CEO eventually. While this isn’t necessarily the case for the new CFO the same challenges exist:
- It notes the top challenges new leaders face are that the company is not always what was expected, building relationships and credibility early on is key, managing expectations is important to avoid them becoming too high, and the changes will trigger personal emotions.
- It emphasizes the importance of learning everything possible in the “fuzzy front-end” period before starting the job through exploring initial hypotheses and finding an early area for tangible improvements to gain successes.
- The authors warn against arrogance and tearing things down before understanding why they exist, and avoiding blaming predecessors or devaluing current staff.
- Successful new leaders were able to be transparent about issues without unnecessary blame while also avoiding being stuck in old ways of doing things.
The first 100 days as a finance leader present a critical period for understanding the organization, building relationships, and setting a course of action. While the temptation to make immediate changes may be strong, it is important to approach change with caution and strategic thinking. Making changes too soon can lead to inadequate understanding, resistance, unintended consequences, a lack of data-driven decision-making, and a loss of credibility. Instead, new finance leaders should focus on learning, gathering data, and engaging with key stakeholders to develop a comprehensive understanding before implementing significant changes. Prioritizing quick wins can build momentum, boost confidence, demonstrate progress, generate support, and overcome resistance. By taking a measured and thoughtful approach to change management, finance leaders can establish a positive trajectory, foster continuous improvement, and set the stage for long-term success.