Australian finance departments are facing pressure to reform payment processes as the digital revolution continues to transform the financial services sector.
These transformations may mean CFOs and finance teams will require ongoing change-management programs to embed new technologies into their operations.
American Express's latest white paper, Payment Revolution, indicates there are many differences in businesses' state of readiness when it comes to adopting new payment technologies.
According to the findings, more than half of the 355 Australian CFOs surveyed said their current approach to payments is effective; nevertheless, the appetite for change is high. The study found 77% of CFOs say fixing payments is high on the business agenda.
Holly Ransom is CEO of Emergent, a company which specialises in disruptive strategy and building the capacity of leaders to execute change. Ransom's address at the Prophet event for senior Finance Executives in Melbourne provided three themes for CFOs to consider when developing a change management strategy for implementing new payments technologies.
1. Communication is key
According to Ransom, communication is an essential part of any change-management process and it's a critical component for any business that is overhauling its approach to payments. Ransom noted, “To get from A to B you need to sell the story and the vision to motivate people and engage them."
To do this, she says, it's essential to clearly communicate why the change is needed — it's not enough to tell people that things are changing; what's essential is to explain why it's happening.
When a change is needed, Ransom says, “We talk about what we're doing and formulate 12-month operational plans and to-do lists. Sometimes we delve into how to execute that strategy. But rarely do we ever get to the 'why.'"
“The reason the 'why' matters so much is because it's the part of the equation that drives behaviour and motivation. So if we're trying to get our staff, who are used to doing things one way, to all of a sudden go left, we need to make sure that they understand the 'why.'"
When it comes to transitioning business partners to new technologies who are used to using older payments technology, Ransom says, “If we're trying to harness partners who are still using cheque books and talk to them about the Payment Revolution and new technology, we need to make sure they can touch, see and feel the 'why.'"
2. Timelines are shorter
The 2016 American Express research study, Game Plan for Growth - CFOs imperative to fuel innovation, showed CFOs who have a game plan in place are more confident than those who don't. According to the survey, 30% of CFOs with a game plan are targeting double-digit growth, while half the organisations surveyed with no game plan expect no growth.
However, Ransom suggests in a fast-paced business environment, fixed long-term strategies are increasingly difficult to execute. She has developed a simple hack to break down planning into three simple steps she calls "24/7/1."
“The idea of 24/7/1 is that within 24 hours of having an initial idea, a new thought, a new game plan, a new strategy, you must take an initial action step towards the achievement of that outcome. It has to be so simple it's inexcusable not to do it," says Ransom.
An initial action step might be as simple as emailing a colleague and asking, "I have an idea, could I sit down and have a conversation with you about it?"
Within seven days, she suggests taking a slightly bigger action step towards the goal such as having coffee with the person you emailed. Then within one month, take an even bigger step towards the achievement of that outcome.
It's a way to plan, offering a different approach to more traditional strategic thinking.
3. Change is a constant
Ransom began her address with a quote attributed to Charles H. Duell the Commissioner of the U.S. Patent and Trademark Office in 1899, "Everything that can be invented has been invented."
Instead of everything already being invented, Ransom says everything is changing all the time, including business models, which have shifted markedly in the digital age. In turn, these shifts have impacted payments, with new technologies driving the transformation of the payments landscape.
This is reinforced by the findings from the Payment Revolution white paper. In total, 78% of respondents said they believe emerging technologies will play an increasing role in business payments. Moreover, 67% of CFOs are determined to drive the innovation agenda, with more than half describing their appetite for innovation as high or very high.
For many businesses, the commercial landscape means now may be an appropriate time to explore how new payment technologies can help drive cash flow and improve efficiencies.
As Ransom emphasised in her address to the Prophet audience, although it can be difficult for executives to kick off a change program, when the operating environment is stable, executives may find it can be a great time to initiate change.
“Even in those moments when we're making the sun shine, where we're continuing to drive outcomes, we need to be challenging ourselves, doing things differently to make sure tomorrow is even rosier than today," she says.
Ransom can attest to the success of this approach. She was formerly the youngest-ever female President of a Rotary Club. When she ended her term as Rotary President, out of 34,000 Rotary Clubs, Ransom's branch led the world in both the number of young members and female members.
“Our success was only because we connected with the people that we were seeking to engage in helping us deliver the product," says Ransom. “The more we have co-creation and co-engagement, the more likely it is we'll create trust, loyalty and long-term traction. And we'll move relationships from being transactional to relational and long term. Which is unbelievably powerful," she says.
Key Takeaways on how has technology changed with new payment methods
- Communicate the change journey from the start of the process.
- Initiate change when the operating environment is stable.
- Seek a diversity of views when embarking on a transformation journey.