Forget about ‘legacy people’, the real problem is ‘legacy managers’
Today we talk about these and other issues with Talita Ferreira, former CFO of BMW UK and founder and CEO of Authentic Change Solutions. After more than 11 years in CFO roles in the automotive and financial services industries — and more than 22 years in corporate business — she decided to establish the UK’s first Academy of Authentic Change and start an authenticity revolution. Her new book, “The Authenticity Dilemma Resolved”, is really worth a read.
Q: What do you believe have been your biggest challenges as a CFO so far?
I prefer to talk about two specific defining moments for growth rather than speaking about challenges. Firstly, when I became a CFO for the first time in 2005 and I had to take on the responsibility for human resources in my organisation.
The second one took place when I carried out a huge change programme, bringing three BMW companies together in one location, and drove an underlying culture change across two industries. Understanding the importance of people in the corporate culture change process was a key learning.
Q: With respect to your last point, how important is managing talent from the CFO’s perspective?
CFOs are in many cases executive board directors, and being a board director you have a collective responsibility to the company overall. And talent is the most valuable asset of any company and in turn a big chunk of the budget for many firms.
Besides, one of the biggest changes derived from the coming so-called 4th industrial (digital) revolution concerns the way people work. That’s why I see HR tasks as more relevant, especially as enablers of the business, and why I think CFOs should look at all these changing trends very strategically. This implies not only knowing who the key stakeholders are, what the external influences are and what is really happening in your environment, but also spending an equal amount of time designing the strategies to consider all the effects.
If the CFO does not really understand the benefits of properly engaging with the human capital of a business, the company could face the dangerous risk of not being able to either find talent in the future and/ or engage with people effectively within the organisation. This could be especially dangerous in an environment in which there is a clear trend towards many people not working at an organisation for 10, 20, or 30 years anymore — especially the younger generation.
Q: Indeed, labour turnover is increasing — and this is especially evident in startup firms. Do you think this is a negative trend?
I don’t think this is a negative thing per se. It’s time for organisations to change and see that their employees might want to pursue almost a ‘portfolio career’. In the future you will lose top performers more and more, and what is going to be important is keeping links to them — almost like creating a community of alumni — so they may come back after having a different professional experience. Sometimes you need more innovative skills out of another industry and if people are moving around they can bring you that.
Q: What do you think of the term “legacy people” in traditional organisations?
First, people are working a lot longer in their life — their retirement age is higher too — and second, the generation entering the workforce is very different. Companies will have to start thinking about new engagement strategies for each of them across the spectrum.
That being said, I don’t like to talk about ‘legacy people’ because it shifts the focus away from the real problem: weaker leaders. If you have weak leaders that are not willing to tell people when they are not performing well and that don’t really understand which skills and behaviours are necessary and so fail to train and develop people to meet these needs, then it’s not surprising that they become part of that ‘legacy’. Leaders are responsible for helping to develop individuals and partnering with Human Resources to create the right development programmes.
Managers cannot only be focused on results anymore, but need to focus on how to develop and grow people. They need to be able to really cope with the change and to cope with being good inspirational leaders that love and live the values of the company. Leaders need to be role models for the behaviours they want to see.
Q: How is this related to the corporate culture change that many traditional corporations need?
Cultural change within a company is immensely important, but it has to be driven by the strategy. Many firms are rethinking what they want to achieve as an organisation as well as defining a new set of values, but they tend to forget how important it is that leaders behave according to these values.
Unless such behaviours are role modelled, the strategy won’t work. Peter Drucker described it perfectly with his sentence “organisational culture eats strategy for breakfast”. I have met managers that, once out of the boardroom, work against what was decided. Because if you tell people from the top “we need to change in this way” and no one is role modelling the behaviour that you want, the organisation at the bottom will know that it’s a lie, and they won’t follow.
Q: And what is the CFO’s role as a leader in the organisation?
Again, the CFO needs to be a business enabler, and you enable a business through structures, implementing your strategy and through people. Some CFOs think that creating the leaders of the future is HR’s job, while I think that a CFO — a very senior figure in an organisation — should have a pre-eminent role in the creation of such leaders, not only in the finance department but throughout the business.
And therefore if, for instance, HR is not creating the right programmes for the development of people that need to align to that strategy, then finance is the one that has to put its hand in its pocket and say “let’s come together, let’s find the money and create the programmes that we need”. Because it’s great if you have loads of money and you have the best systems, but if you don’t have the people to deliver on them, you are a bit screwed.
Q: What is the risk for traditional companies not embracing cultural change?
All I would suggest is to take a look at the High Street in England and check out how many giants no longer exist. I believe retail is a place where you can see the change faster than anything at this moment. The automotive sector, for instance, will have the biggest change facing it in the next 10 to 15 years with autonomous driving. And if any industry is not able to move, change and react fast enough to what’s coming from outside, it will be like the retail High Street.
I once had a boss who was quite amusing; when I shared an imminent big future risk, he always said to me “you need to work to prove it wrong”. If you just identify and tell everyone about such future problems and then the prediction crystallises and the organisation fails, you clearly didn’t do your job well. And I think many companies are identifying the problems, but not really changing enough to stop their predictions turning into realities.
Q: How is the role of technology evolving in the finance department?
There are always new things coming that are impacting organisations. For instance, in big organisations you’re always struggling with legacy systems built in the past, something that startups deal with much better since they are now creating or adopting new systems.
I think well-integrated systems are really what you need, and right now there are a lot of companies moving towards creating integrated systems in the different subsidiaries across the world. We need one point of truth.
Additionally, at multinationals, there is already a lot of outsourcing. And not only in finance; I think it can apply just as well to HR. You want your HR team to be an enabler of the business and to create the programmes to build the future leaders. But if they’re mainly spending their time on HR ‘paperwork’ or general activities that can be outsourced, that’s not value added. I really like the practice of outsourced insourcing, when you outsource something to an external provider, but the external provider is based at your facility.
Q: What are the three qualities you would look at when you hire someone?
Mostly I look for people that can create trust in teams. So, authenticity would be the first quality, meaning that the person needs to be self-aware and be able to create deeper connections with other people.
Then I would put attitude in second place and skills in third. I don’t necessarily hire people who have 80% of the skills or 90% of the skills for the job, I want a person with a 120% attitude — even though he/she may have 60% of the skills — and who has the urge to be continuously learning new things, especially about themselves. Skills can be trained; a great attitude is either there or it is not.
Q: When you say deeper connections, I guess you don’t mean friendship.
Of course not. A leader does not have to create friendship with their team but rather a relationship based on trust. If you meet people that you are leading too often outside the office, on a social basis, such leadership could be undermined.
But this does not imply that you need to wear a mask at your job just in case people don’t take you seriously, and be a different person compared to your personal life. Of course you need to regulate your behaviour, but always in a way that you’re still the same person, living the same underlying core values. Many people think that we need to keep all the parts of our lives separate. And that’s exactly why you have such a major problem with well-being in organisations, especially big ones, because it’s easier to hide there and to pretend.
Let me give you an example: with one of my former managers, I never knew who he really was. One day he would show one face and the next day he would show a different one. I did not trust him at all, so he could never inspire me because I never really knew if he was being genuine. Many times I only trusted 60% of what he said, so I still had the chance to retaliate, react, change my mind, or do something else with the other 40%, just in case it was not really what he meant. The impact that this has on people’s psychological well-being should not be underestimated. It is emotionally draining working with that kind of leader. Obsessively questioning things can also be quite self-destructive.