Because CFOs lean financially conservative, they’re often uncomfortable with high risk, potential failure or missed targets or unpredictable outcomes, Cliff Struhar, vice president of advisory at Gartner, said at the Gartner CFO & Finance Executive Conference on last week.
In his practice, Struhar often sees CFOs over-rely the same “basic, fundamental” automation projects their peers rely on, rather than pushing the envelope and trying something new. This is too conservative, he said; some of the best digital transformations come from moving beyond a company’s comfort zone.
Another indication of being over-conservative is searching for the perfect tool, rather than the tool that can do the job, Struhar said.
“This often results in months of delays caused by analysis paralysis,” he said. ”Our initial robotics process automation (RPA) research found that some companies spent less than two months analyzing options and selecting software, others spent over a year on those same processes.”
Digital conservatism, therefore, slows organizations down and almost certainly prevents them from achieving the organization's most ambitious goals, Struhar said.
More than 4 in 5 (84%) of Gartner clients said finance should be “digital by default,” meaning RPA, artificial intelligence and machine learning should be used to execute most tasks, by 2025, according to its 2020 Future of Finance survey. Yet when it comes to implementing digital technology, nearly three quarters of CFOs said their teams are too cautious.
Struhar outlined a handful of “immediate and inexpensive” things CFOs can do to overcome their digital conservatism.
- Reset expectations of what's possible.
CFOs would do best to recognize digital possibilities exist far beyond what many are willing to consider, he said.
- Mitigate the bias.
Gartner’s most successful clients ensure “digital crusaders,” who are most enthusiastic, are owning digital projects, and not allowing the naysayers to slow their progress.
“We can remove some of these obstacles and convert some of the naysayers by framing new technology within familiar formats,” Struhar said. “Think of it like this. At some point in time, literally everything is brand new. Rather than think of new technology as scary, it's helpful to think of it as an improvement on something we already know.”
Weave end user readiness into project selection criteria.
CFOs tend to be good at analyzing whether or not a given technology can do the job at hand, but they aren’t nearly as good at analyzing whether or not the people who will use the technology are ready, Struhar said.
Celebrating failure is not a concept that resonates with most CFOs, but in adopting AI and RPA, it can be vital.
“How are you ever going to know what AI or machine learning can do if you don't also understand what it can't do?” he said.
He cited Mars, Inc., the candy company, about one-third of whose digital projects are classified as “clear success.” This means they fully expect twice as many projects to fail as to succeed, which they consider critical for its progress.
“Mars's finance leaders believe that reinforcing the importance of failure and actively celebrating failure in these sessions is critical for having the message sink in with the finance staff and their discussions,” Struhar said.
An ideal model for overcoming digital conservatism, Mars validates the importance of continuous learning for digital technology progress, understanding how each abandoned project will help advance finance’s collective understanding of how to implement digital technology moving forward. It also shares specifics about what the team learned from working on the project, and reaffirms that job security is not threatened by working on an abandoned project.