How to keep a grip on the numbers in times of change

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By: Derek Phillips

It’s been previously well-documented that the vast majority of change initiatives fail to achieve planned objectives and outcomes for many reasons with adverse impacts on cash flow, customers, and careers to name but a few. The NAO/OGC list of common causes of project failure identifies the leading cause being the lack of a clear link between the project and the organisation’s key strategic priorities, including agreed measures of success.

Keeping a grip on the numbers in times of change is paramount, never more so than now i.e. post-COVID as the pressures are considerable for a host of reasons, some of which we will discuss more of in this blog. Clearly, where performance is not within acceptable tolerance, it will need attention. 

The numbers that form part of any business-case justification for stopping, starting or continuing with any change-initiative will always change, where three states-of-play should be reviewed as a whole being:

  • The existing state i.e. pre-change
  • The intermediate state i.e. during the deployment of the change
  • The embedded state i.e. post-change

    value driven business

Irrespective of any of the change-methods used, and the strategic leadership approach followed,  someone, usually a senior finance person working closely with other colleagues, should be keeping a grip on all the right numbers to support decision-making at all times. This is not a role for traditional accountants or business analysts, nor the faint-hearted, but one that will typically add much value. This is because it will bring that person close to the executive decision-makers in respect of strategy development and its execution, which should benefit personal career development.  

As to how this is done, please continue reading to find out…

Things that skilled finance or analyst colleagues should be alert to in times of change

Business-change often generates more digitisation of the customer experience, with related impacts on operating models, governance, and all forms of reporting. 

Not all these changes are necessarily favourable where finance is concerned, as they may need to increase headcount and control processes to cover additional requirements and risks in some cases. I have seen this for example with the introduction of flexibility driven by customer demand in connection with customer billing and payments-management, where additional costs within finance were sanctioned. Numerous instances can also be recalled of additional bespoke reports and dashboards required to track additional costs, revenues and activity analysis differently from that previously in place, all of which can make perfect sense.

Finance colleagues will need to keep a grip on the numbers that matter, which is relatively straight-forward where there is a culture of positive working relationships, but that’s not always the case where business-partnering is weak and data-integrity is poor.
An effective finance approach applicable to most change-management adapted from Jeremy Hope’s book entitled “Reinventing the CFO”    advocates constructive collaboration between finance and other colleagues with the CFO occupying seven roles:

  • Simplifying complexity and reducing unnecessary detail
  • Providing analytical information that really is needed
  • Aligning logic and assumptions for rolling forecasts, providing input into Steering Reviews that should cover the three-states of play [existing, intermediate and embedded]
  • Bringing clarity to everyone on what’s most important to measure
  • Partnering for good governance and control, combined with strategic risk-assessment
  • Partnering for beneficial change, proactive in deploying lean and digital solutions

Operating as a thought-leader and champion of change with the benefit of a finance or analytical background provides a good basis to communicate clearly with the benefit of hindsight (pre-change) and foresight (post-change) on an organisation-wide basis i.e. able to ask and answer all that colleagues and other stakeholders expect of you. This, combined with the ability to rapidly make the connection between financial and non-financial numbers is useful in keeping a grip on all the right numbers.

Responding favourably at all times to feedback from colleagues is a given, as most colleagues will have more knowledge about details that may need further attention to keep a grip on performance that may for example lead to active real-time monitoring of new processes, products and services i.e. to pre-empt potential problems later.

Sections below provide more insight into which numbers to look at more closely in times of change.

Key principles for performance success 

High performance stems from operational, commercial and finance outcomes all being delivered successfully. Keeping a grip on all these numbers relies upon quality being more important than quantity, less is usually more, where it’s essential to link measurement to critical success factors.

Bernard Marr, a well-known Strategic Performance Management guru has undertaken many studies and written 18 books across this subject. When I met him some years ago, he referred to organisations sometimes simply reporting numbers that are straightforwardly measurable, rather than those that really should be measured. 

Bernard has worked with the Advanced Performance Institute and researched over 1100 blue-chip organisations and identified the top 10 measurement principles that should consistently generate higher performance.

These 10 steps are:

  • Achieving strategic clarity. This is the most significant principle
  • Creating a positive learning culture, potentially via improved empowerment 
  • Collecting meaningful indicators, those linked to critical success factors for example
  • Applying performance management analytics e.g. via the use of business intelligence
  • Gaining cross-organisational buy-in
  • Ensuring organisational alignment
  • Keeping the performance management system fresh
  • Reporting and communicating performance information appropriately
  • Implement appropriate software
  • Dedicating resources and time to performance management

The most impactful are the first two where the strategic clarity, the why is not always understood and the personal learning and development needs for success are not considered. Both of these are critical for success, early-stage involvement of colleagues in the right way should generate demand to change combined with a desire to get a grip on the numbers in order to showcase change for good. 

numbers in hand

Which numbers in particular should be scrutinised post-COVID?

Influenced by a recent ICAEW article written this year by J Boulton (ICAEW Director of Technical Policy), the following six questions are a useful starting point for consideration as per the link below:

  • Which lines of business are currently viable/non-viable?
  • What government support has been received that may impact reporting and comparisons?
  • What assets are being used less, and will this lead to impairment adjustments?
  • What contract obligations may no longer be honoured?
  • What contract rights might not be enforced?
  • What will be reported externally of significance ref. COVID?

All of the above may influence the current change-portfolio, hence the following additional questions may be relevant too:

  • What changes need to be made to cost-estimating?
  • What changes need to be made to benefit-forecasting?
  • What changes need to be made to controls and governance?
  • What changes need to be made to risk-assessments?
  • What needs to be done to update the business-case logic?
  • What changes need to be made to data-capture and governance?
  • What does the overall business-change portfolio look like post-COVID?

Getting a grip on the numbers post-pandemic will require a few select people within most organisations to ask and answer at least the above questions as a starting point to optimise future performance.


What does all this mean for the change-portfolio?

The change-portfolio is likely to end up looking a little different than it did towards the end of 2019 (pre-COVID), with a number of factors being relevant prompted most likely by three key things that may have changed:

  1. The value-proposition as a whole including digitised customer-journeys and multiple-aspects of the connected commercial agenda
  2. Critical Success Factors that should prompt a review of costs, benefits and KPI’s in general
  3. The pace of expected change will also have stepped up putting pressure on execution combined with updating rolling forecasts. The latter being well summarised in this recent Sullivan Stanley Beyond Budgeting video:

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Other recent changes and emergent trends will impact the way in which the change-initiatives are assessed, numbers are viewed, and decisions made. For example, faster broadband speeds and 5G will only increase the demand for real-time data and information that will impact multiple applications in different ways, with an ever-increasing desire to keep a grip on the numbers at all times. 

Hybrid use of the cloud will increase the quantum of data generated and the need for more analysis and reporting. Working from home will likely continue to operate for many if not all the time, which will impact data security, business-partnering, governance reviews, analysis and reporting that will all impact actually keeping a grip on the numbers, especially where change is involved.

Change-portfolios will likely need to be reviewed more regularly than beforehand, as business changes are deployed in increasingly shorter timescales, and that will put ever more pressure on re-assessing all assumptions and logic that will need to be updated more frequently than pre-pandemic.

The increased use of AI by the business will impact Finance colleagues too, AI has been used for a while in many specialist areas within Fintech with good successes being achieved. AI is now impacting the mainstream in reading data, sorting and matching transactions, scanning and processing invoices and other documents, tracking changes and identifying potential errors. That will provide a good opportunity for finance colleagues to move up the value-chain and spend more time partnering with non-financial colleagues to improve overall business performance. 

The importance of this cannot be under-stated as every business-case justification for investment and change is, or should be, underpinned by sound numbers that will be reviewed and updated regularly. This means continually evaluating the dynamics of all three states of play [existing, intermediate and embedded] at all times to effectively enable benefits-led decision-making where that may be required.


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Written by Derek Phillips
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