It’s bad news for finance directors. When it comes to improving the finance function, there is no silver bullet. There is no super new technical wizardry or consultancy sleight of hand that will transform things overnight. And there is most definitely no such thing as best practice, no one-size-fits-all approach that will make your finance troubles go away.
This, at least, is the conclusion reached by the Institute of Chartered Accountants in England and Wales in recent research that it has undertaken into the finance function, as part of its Finance Direction initiative. At first glance, these statements seem quite odd. After all, we’re bombarded every day with information about ‘best practice’ in this and that, so surely there must be something in it. Mustn’t there?
The ICAEW research reminds me of some work I did with one of my clients a few years ago, to develop a way of identifying best practice in the higher education sector. After a lot of thought and discussion with people across the sector, we came to the conclusion that best practice is very difficult to come by. Even its less absolute cousin, good practice, turned out to be somewhat elusive.
It’s all very well for someone to say that they tried something and that it seemed to work well, but that’s a long way from saying (and being able to prove) that it will yield similar benefits for other organisations. In fact, it is often difficult even to be sure that the activity has yielded these benefits in the original organisation, given the absence of a ‘control’ and the understandable tendency of some organisations who have spent a lot of money on something to be overly positive about how useful it has been.
What it comes down to is that all organisations are different, with different people, different priorities and different organisational cultures. Just because something has worked in one organisation (if it did, in fact, work there), this is no guarantee that it will have a similarly positive impact in another organisation. While the sharing of experiences between organisations is to be encouraged, the wholesale adoption of some particular way of doing things just because it seems to have worked somewhere else is not.