Steve Milligan on Agile Finance and Finding Synergies

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

Mentioned:

• Agile 2019
• AICPA – Agile Finance
• SEC
• Beyond Budgeting
• Objectives and Key Results
• Book: Start with Why
• Steve on Email
• Agilious