Finance Departments are facing a mounting challenge. What they know and have been doing for years is starting to fail, and in the near future, the status quo won’t be enough to drive their company’s success.
Accounting and finance play an integral role in organizations, and every company requires their support. But in the midst of today’s accelerating business landscape, finance is struggling to ensure those moves are safe. To provide the necessary support, it’s time to change what your department is doing and how you’re doing it.
So, if changes need to be made, that must mean that it’s time to put together a new strategic plan, right? Wrong.
Five-year plans won’t get your department the results it needs. They’re too structured and linear for a rapidly changing world where innovation is happening faster than many businesses can research and adopt advancements.
Although organizations are struggling to keep up, they’re still moving fast and the pace of technology adoption is accelerating as a result. This means that your Finance Department needs a responsive, agile strategy to be fully equipped to implement effective and successful changes.
What Makes an Agile Strategy Different From a Strategic Plan?
When creating a strategic plan, a large goal is broken down into sub-goals that are gradually achieved in a linear order. It’s a slow process, and if there’s a problem achieving one of the sub-goals, the whole plan shuts down. Because the steps are linear, any roadblock can result in a complete stop.
Strategic plans are well-thought out and well-documented, but they don’t have the flexibility needed to react to changes in the real world, leaving these plans binder-bound.
Agile strategy doesn’t work that way. Instead, it starts with setting a long-term goal and then developing many steps—smaller goals—that are re-evaluated along the way to reaching that larger goal.
There are two main differences between an agile strategy and a strategic plan:
- Timeline. While a strategic plan is normally developed for five years, an agile strategy focuses on a goal in the much more distant future. By reaching beyond the timeline of the strategic plan, an agile strategy can potentially help to ensure that a company is working toward establishing its legacy. The end goal, possibly even 100 years into the future, can be the purpose or principles of an organization, which will act as a guide that the smaller goals work toward.
- Adaptability. After setting the long-term goal, smaller goals, also sometimes referred to as sprints—a term borrowed from software planning—are established. These are spaced about six months apart and add much-needed re-evaluation periods to an otherwise long and complex journey. These small, achievable goals can be accomplished at a greater speed and allow companies to assess alternatives. This also avoids wasting resources on trying to accomplish something that isn’t working or striving for a goal that is no longer relevant.
Six-month timelines offer the flexibility to either confirm a step as part of the appropriate path or alter it, which leaves companies agile and more effectively able to adapt to digital disruption.
These differentiating features, also called vision and improvisation, are the keys to keeping up with technological innovation.
How Agile Strategy Can Save Your Finance Department
Creating a strategy can be a slow, frustrating process, but some sort of plan is needed to work cohesively and productively toward a goal. That’s why agile strategy is so important. It still requires strategic thinking, but it isn’t as static as strategic planning.
Agile strategies keep companies moving toward large goals while enabling them to experiment with new technology. Because of the smaller steps and six-month progress review, the idea of failure is eliminated.
Instead, failure becomes responsive growth because this type of strategy recognizes that there are many ways to reach the end goal. This approach helps your company discover what is most effective along the way.
So, when your Finance Department is looking to implement change, don’t get stuck in the old ideology of making a plan and sticking to it. To be successful, become both adaptive and directive by establishing an agile strategy.