A recent Capstone Insights survey of over 1,500 F&A professionals discovered that while executives typically have a very positive view of their firm’s processes and systems, that rosy outlook is not shared by their teams.
These results brought up a big question for us: if executives are so removed from the day-to-day experiences of their teams, how can they lead effectively? We did a deeper dive into the causes of this perception gap and the pitfalls that come with it, and provided strategies to get everyone on the same page.
Why Is It Critical for F&A Teams to Bridge the Gap?
This misalignment can lead to several operational problems, chief among them is decreased efficiency and misallocation of resources. For instance, if your staff accountants are busy forcing solutions to work together and chasing down errors in spreadsheets, they cannot work strategically and may not have any bandwidth left for innovation.
Similarly, if executives assume that everything is running smoothly on a given team, they may invest time and resources in departments who seem to need it more, not realizing that the first team is operating under duress.
If that stress is not relieved, and the perception gap becomes an entrenched problem, it will eventually lead to poor morale and costly turnover. Training a new candidate to backfill a position can be expensive, but the higher cost is often the loss of institutional knowledge when a long-term employee decides to leave for greener pastures.
To put it simply, if leadership doesn't really know how difficult their employees' jobs are, they won't know how to improve the situation and retain top performers.
This misalignment may also lead to more dramatic issues in the future. The nature of today's financial data means that you are just one formatting change away from a spreadsheet, that you didn't even know about, breaking and causing data loss, work stoppages, and unmet SLAs.
How Do We Build the Bridge?
Find Out What's Not Working
Not all employees are comfortable bringing issues up with their managers, especially if it's something they see as a minor issue they just need to deal with before moving on with their day. But in reality, those small day-to-day annoyances are where the perception gap begins.
If something is bothering your employees on a regular basis, you need to know about it ASAP.
Our first recommendation is adopting a practice for collecting and analyzing regular feedback from direct reports. That could be introducing employee engagement software, providing avenues for anonymous feedback, or frequent brown bag lunches with executives, where employees can talk about what is broken.
Beware the Sunk Cost Fallacy
If you are hesitant to make changes because your team has already put a lot of effort into building complicated workarounds, you may be laboring under the sunk-cost fallacy.
Perhaps you think you can't slow down and fix it. Perhaps the idea of adopting modern accounting systems just feels too daunting.
Staying focused on the cost of your current systems and the future benefits of adopting a modern accounting practice, instead of ruminating on past investments, will put you in a better mindset for adopting change.
Adopt a Culture of Innovation
On innovation day, front-line accountants are encouraged to identify issues within your current systems and work toward developing a solution. Involving managers in project selection prior to the event helps ensure that innovation day projects have the right scope, complexity, and potential business value.
Read the full Capstone Insights report to discover where organizations are reporting the largest gaps in F&A performance and strategies for improving organizational effectiveness, transparency, and collaboration..