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Steve Milligan on Agile Finance and Finding Synergies

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In this podcast recorded at Agile 2019, Shane Hastie, Lead Editor for Culture & Methods, spoke to Steve Milligan about his work in Agile Finance and bringing the back-office along on the agile transformation journey.  

Key Takeaways

  • The funding of agile initiatives has been largely left outside of the scope of transformation efforts, which results in dysfunction and cross purpose
  • Agile finance introduces structure so that financial aspects (target setting, budgeting, expenditure and reporting) become synergistic and add to the positive impact of transformation 
  • Attitude changes need to start with the agile coaching and transformation change agents – they self-constrain and are biased against working with finance groups
  • The need to move from static budgets to activity-based budgets and investigate ideas like Beyond Budgeting 
  • The authoritative bodies (SEC, AICPA) have issued guidance for the accounting profession regarding investigating and determining the applicability of concepts like Beyond Budgeting

Show Notes

  • 00:24 Introductions 
  • 00:46 Bringing the viewpoint and background of a finance person looking at agile ways of working
  • 01:00 Breaking down the silos around finance and other back-office functions
  • 01:16 Agility has largely been focused on product development
  • 01:43 The funding of agile initiatives has been largely left outside of the scope of transformation efforts, which results in dysfunction and cross purpose 
  • 02:06 Exploring the back-office functions
  • 02:16 Understanding the difference between local impediments which can be resolved through collaboration and true roadblocks which may need, for example, legislative change
  • 02:40 Agile finance introduces structure so that financial aspects (target setting, budgeting, expenditure and reporting) become synergistic and add to the positive impact of transformation
  • 03:11 This is contrary to the common perception of finance as a constraint
  • 03:29 Fixed thinking is an even larger constraint – the need to move beyond thinking of finance as a blocker and explore how to be collaborative and synergistic 
  • 04:00 Advice for finance people – don’t be left out of agile transformations, learn and find ways to better assist and enable business agility 
  • 04:38 Agile processes have a batter fit with the stewardship and compliance responsibilities of finance than traditional approaches 
  • 05:42 It’s possible to improve the finance processes without destroying them – there is no natural antagonism between agility and financial compliance 
  • 06:10 Change needs to start with the agile coaching and transformation change agents – they self-constrain and are biased against working with finance groups 
  • 06:38 The importance of communication with areas of the business that are often ignored – eg the PMO 
  • 07:01 This also results in the need to put financial metrics into the outcome measurements for agile transformation 
  • 07:40 The authoritative bodies (SEC, AICPA) have issued guidance for the accounting profession regarding investigating and determining the applicability of concepts like Beyond Budgeting
  • 08:00 The need to move from static budgets to activity-based budgets 
  • 08:19 Explaining the difference between activity-based budgeting vs traditional static budgeting 
  • 09:38 Agility is about moving from the pretence of predictability towards more scientific forecasting with self-correcting approaches
  • 10:00 The comparison with self-driving cars able to respond to more complex environments as the technology improves 
  • 10:14 A learning system does not guarantee certainty (nothing can) it generates improved feedback which enables more effective course correction 
  • 10:30 Introducing and explaining OKRs – Objectives and Key Results 
  • 11:05 An example of how a high-level objective cascades through OKRs 
  • 11:28 Start with why 
  • 11:43 OKRs can evolve over time
  • 12:00 The environment we live in today is volatile, uncertain, complex and ambiguous and we need to find ways to deal with this
  • 12:38 Advice for finance people in organisations adopting agile approaches – get involved, educate yourself, look for synergies, be open to new ways of working and achieving the compliance needs 
  • 14:01 Advice for agile transformation leads to engage finance people on the journey – tell the stories, communicate, educate and look for synergies 
  • 14:58 Advocating for regulation change to mandate agile processes as the default approach unless there is a compelling reason not to 
  • 15:32 If we assume we don’t understand each other, we miss valuable opportunities for conversation

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