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TFG spoke to two leaders in the fields of finance and technology about the changing role of Chief Financial Officers (CFOs) and hybrid models for streamlining and future-proofing corporate operational processes.

Change in the corporate world is never an overnight process. 

More than anything, the COVID-19 pandemic has accelerated the need for businesses and leaders to adapt their business models, leadership styles, and key processes. 

TFG asked collaborative trade finance experts, Enno-Burghard Weitzel, senior vice-president of strategy, digitisation and business development at Surecomp and Dr Yorck Schmidt, executive vice president and CFO at Corporate AVL, what they thought was needed to facilitate effective change management during this period of major transition. 

Both felt that one of the biggest drivers of business strategy in the current macroeconomic environment was regulation––particularly legislation around the Environment, Social and Governance (ESG) requirements slowly being introduced in the UK, Europe, and across the Atlantic. 

Such measures have been placing increased pressure on businesses to modernise. 

Despite being aware of the environmental and financial benefits arising from making these changes, many companies are still facing resistance on a number of fronts.

Three main hurdles to change

York Schmidt felt that, as part of any effective change management strategy, there were three hurdles that needed to be overcome. 

  1. Psychological and cultural resistance: one often rooted in uncertainty, with workers in an organisation often being afraid of losing their relevance, or indeed their jobs, as a result of restructuring or modernisation. 
  2. A lack of trust in the processes themselves: often arising due to misgivings around the introduction of new technologies like automation or AI, or a lack of transparency between counter-parties. 
  3. A lack of decisive leadership: having to make difficult decisions, create a mandate for change, and then empower change agents to be competent when it came to its implementation.

Schmidt’s antidote to this was increased transparency, good communication, and inspired leadership. 

Schmidt said, “I think it can only work either by strong leadership or strong communication––by building lighthouses of expertise where you can see how this is really applied. 

“We will always have these lighthouse towers outside of the organisation and will admire them, but we’ll need to bring them into the organisation in order to have real, end-to-end improvements.”

Hybrid approach: the key to smoother technological transitions 

Taking this concept into the technological sphere, Enno-Burghard Weitzel believes that the key to building trust and making any kind of workflow transition is to employ hybrid models. 

Using the example of business administration and documentation processes increasingly becoming paperless, Weitzel said, “If there is a [hybrid] process, the very same process needs to support both the traditional way of working (paper-based) and the new way of working (data based).” 

Rather than try and completely eradicate one system and then introduce another wholesale––something that is often not practically possible––Weitzel felt it was more efficient to take a gradual approach. 

Weitzel added, “If all parties of a transaction need to be able to work in a new way, it’s very hard to find the right counterparts. So if a system allows a hybrid model of working––where one party may use the benefits of data and the other may still hit the print button because they need paper––then we have the technological framework to fuel that experience.” 

Transforming operational processes in this way would help catalyse the development of businesses from where they currently stand to where they need to be in the future.

leadership and teamwork

The changing role of CFOs 

When it came to navigating external changes and threats such as inflationary pressures, geopolitical instability, commodity price hikes, and IT security (while still being able to operate effectively) both felt it was imperative for CFOs and company treasurers to play a bigger role. 

This did not just extend to the safeguarding of a business, but also the creation of value. 

Schmidt said, “It’s more than just safeguarding business and finances, or being a business partner, or being a strategic advisor, given the current challenges we are facing. 

“The role requires you to be a value designer––to create value with customers in changing circumstances––but at the same time, also understand how these changes might impact on things like cash flow or funding.”

However, in order to be effective, CFOs needed a mandate to make the changes necessary to solve problems and alleviate bottlenecks––a task that Weitzel felt could be aided by innovation.

Weitzel said, “If we, from a technology perspective, could enable the CFO to have more options to design value or create value, that’s where technology has a role to play.”

For example, having more data at their disposal could enable CFOs to connect the dots and get a more complete picture of the business, allowing them to make better, more informed decisions at transactional, operational, or forecasting levels.

For these types of solutions to be adopted they need to be reliable, transparent, fast, and often requiring of significant cash investment––a luxury not every organisation can afford right now.

Here, Schmidt feels that blockchain technology may have a role to play, but reinforces that the leap from ‘traditional paper mentality’ to decentralised open ledger technology may be too drastic for some.

Ultimately, though, Schmidt feels that the biggest driver of change comes down to good leadership.