The challenges and opportunities of Financial control in a dynamic and complex environment.
The role of management control largely depends on the size and culture of companies, their sectors of activity, the internal and external environment, the strategies deployed, etc.
Two aspects are frequently put forward :
- The Financial Controller has a primary technical role of auditor and planner.
- He would also play a second more relational role of advice and decision support. With the digitization of processes and the widespread implementation of connected management platforms (Industry 4.0), the secondary role has tended to grow strongly in recent years with hyper-globalization and Big Data.
This rapid evolution of the function poses the problem of the place of management control in the system and the value analysis of all the processes of the company, and this in a perspective of continuous improvement and the quest for agility.
Based on this hypothesis, Financial control becomes central to the management of the organization and its development. Beyond operational management, up to what level does Financial Control intervene in strategic decision-making? And from a Lean perspective, does it serve the customer and does it place him at the center of the Kaizen approach?
The dilemma of Financial control : Serving management or helping operations. How to influence change ?
Be at the service of the management only in a role of verifying the value provided by the operational staff in the field or helping field managers to improve processes over the long term. Without real delegation of authority, they will have great difficulty in exerting any influence on the necessary modifications to be made to the methods, following their control analyses.
“The situation of the Partner Financial Controller function is particularly fragile. Either it imposes its authority and inhibits the creativity of the operational staff who only think of their income statement, or it is swallowed up by the operational teams and may be led to manipulate the results.”
Caroline Lambert & Samuel Sponem
In order for Financial Control in the field to be efficient and help in the strategic management of the company in the conduct of change, it is necessary to help operational staff and to decentralize decision-making.
Everyone thus becomes their own controller. By supporting managers to develop better thinking on financial management, Financial control allows more operational creativity and even promotes innovation. By becoming one of the pillars of continuous improvement and change management, it thus becomes the condition for steering the strategy in times of crisis.
This tendency to conceive of FInancial Control as an entity of the managerial change management process makes it possible to integrate all managers in the identification of areas for technical but above all human progress.
Integrated into the Lean Hoshin Kanri matrices, it contributes to the strategic alignment and co-management of operations. This evolution of Financial Control in close connection with Lean allows it to reinvent itself.
It forces the controller to change his posture into an adviser and help-support for operational thinking specific to Lean and agile companies.
How Financial control can support strategic decision-making and customer-centricity in times of crisis.
Faced with a crisis, the current organization no longer knows how to achieve the objectives set because the environment itself has changed suddenly.
Strategic leadership involves rapidly transforming behaviors, mindset and culture.
This is a key determining success factor, in times of crisis, leaders need accurate and relevant information to make quick and good decisions. The first to react has the advantage over its competitors.
Financial Control checks the credibility and reliability of the data that the field sends to the management.
Just like the zero delay approach of Lean, fast financial data makes it possible to provide “just in time” information while allowing “empowered” field managers to pilot and decide immediately thanks to visual management supported by Financial Control indicators.
By valuing the results of the teams more quickly in the development of the company, it makes it possible to motivate individuals because it values their skills and their roles in the change.
In a changing and uncertain environment, the Financial Controller becomes one of the pilots of progress by helping processes to adapt to realities and correct deviations. It measures the effects of waste reduction and improvement actions carried out by the operational teams.
The role of the controller is very transversal in the organization. The human dimension is very important in times of crisis because the rhythm of exchanges at all levels and with all functions is essential and mental resources are exacerbated. It is a managerial innovation.
Associated with continuous improvement and innovation, Financial Control is an element of survival. It helps to steer strategies, analyze results and avoid slippages.
“It is a new era of perpetual evolution, in which the pace and intensity of change is accelerating and for which organizations are implementing continuous improvement initiatives. From decision-making support, Financial control is shifting towards helping to control progress, profoundly modifying the relationships it maintains with management and operational managers.”
Romuald De La Cruz
In times of crisis, Financial Control, to have an impact, must enable the transformation of practices and systems, in agile mode, and based on the improvements acquired by Lean Management. This strategic steering approach also aims to change management styles; internal culture. Lean and Financial control work together to make the learning organization more agile, innovative and disruptive to transform its products and adapt to customer demands.
Surprisingly, from this perspective, the objective of the strategy in times of crisis is less economic performance than the managerial transformation of the entity and its culture, its values.
In summary, The evolving role of Financial control
- The role of Financial control is changing in a dynamic and complex environment, where it needs to balance its technical and relational functions.
- Financial control faces a dilemma between serving management and helping operations, and between imposing authority and fostering creativity.
- Financial control can support strategic decision-making and customer-centricity by decentralizing decision-making, integrating lean principles, and providing accurate and relevant information in times of crisis.
- Financial control can help adapt processes to realities, measure the effects of improvement actions, and avoid slippages.
- Financial control can enable the transformation of practices and systems, change management styles, and foster agility, innovation and disruption.
“The most dangerous kind of waste is the waste we do not recognize.”
Shigeo Shingo
Happy CEO 