Effective CFOs know their business, says Standard Bank's Sean Berrington
"In the early days of the Group IT transformation it became clear that, unless the finance team transformed as well, we would become irrelevant. As a result, we needed to radically relook at how we run our staff engagement and processes," says Sean Berrington, CFO for Group IT at Standard Bank. Sean has been the finance boss of a “billion-dollar IT organisation” since mid-2016. Add to this his intimate experience of agile ways of working and he might just be the ideal person to talk to about the crossroads of threats and opportunities that technology and finance bring to banks and finance professionals.
By Ebrahim Moolla
It was supposed to all be very different, with a younger Sean telling his friends that they should question his sanity if he would ever end up in a core finance role. What happened in real life was that Sean became a chartered accountant, learnt about the banking environment at PwC and then joined Standard Bank to spend three formative years as head of finance for its (in)famous core banking transformation. After another three years as finance head for IT at Personal and Business Banking, Sean was promoted to become the billion-dollar IT CFO of today.
Core finance. Really?
"Throughout my articles, I never dreamt of being a CFO. In fact, there are a few occasions that I remember distinctly telling my mates that I would 'have to have my mind read if I ever ended up in a core finance role'. In the early days, I honestly didn't know where or what I wanted to be and as time went on I set my career ambitions of becoming a partner in the broader IT consulting sphere."
"On returning to PwC South Africa after a few years abroad, I was given the opportunity to lead the Standard Bank IT consulting relationship, which, after a series of engagements, culminated in my being appointed by the bank as the Finance Head for the core banking programme. One thing led to another and, on the jungle gym that has been my career I have ended up as the CFO for Group IT. Reflecting on the short time I have had in this role so far, I am convinced that I have taken the right step. I couldn't, however, have projected the journey ten years ago. It is the right place for me and I believe that the combination of deep IT and finance skills is invaluable to being an effective CFO for IT."
From consultant to corporate: "a complete blur"
"As a consultant, you often have the luxury of making recommendations, issuing your report and then disappearing until the next engagement or report, never really having to deal with the long-term implications of your findings or, in the case of core audit engagements, having to deal with the implementation of the recommendations."
"With this in mind, the first year of my being in a corporate was a complete blur. Outside of the fact that I now had to deal with the implementation of my own recommendations and didn't really get this finance thing, I was also delusional as 'I thought I knew the bank'. This being said, I had a great set of sponsors in the bank, I had a pretty good understanding of 'what good looked like' and I had the will and determination to get this right. A few mistakes, reprimands and near misses later we got it right.
"We built a small team from scratch with people from non-traditional banking environments, we drove the outcomes as best as we know how - not prejudged on existing organisational mindsets - and started seeing the benefits of our investments. Despite the fact that I have been in the bank for a few years, the team still adopts some of these principles today."
How to replace a bank's core.
"Those of you close to the banking industry will know that Standard Bank started its core banking replacement programme a few years back with the intent of digitising and replacing its legacy processes, of which some were more than 40 years old, with a new, agile platform, namely SAP Core Banking."
"Being at the helm of the finances for the programme was tough. Besides the operational requirements to ensure that we stayed abreast of the finances for the hundreds of resources working on the programme, we were also required to develop a robust forecasting model, develop a robust business case supporting the programme and ensure that the business case was appropriately represented in the strategy. In addition to this, I was expected to actively participate in the operational management of the programme, giving me great insights into the juncture between IT, business and finance."
"Through this process, I also assumed responsibility for design of the financial processes within the core banking programme, allowing the opportunity to design frictionless financial processes from the bottom up, a privilege very few people have the opportunity to do."
What has happened since your promotion?
"I never wanted to be 'that guy' who walked in and made sweeping changes. In fact, in one of the first few days I had in the role a staff member made a comment to me 'you know, Sean, that is how it is. The new broom will sweep clean', and this comment has stuck in my head. Influenced by this I have undertaken my role with the following five principles in mind: lead by example, take the team along on the journey with you, be willing to get into the detail, challenge and be challenged and say it like it is."
Resistance to change at the oldest bank in town?
"My philosophy is that if you need to do something, just get it done. A lot of people in any organisation often express frustration at their inability to influence changes, but you would be surprised at what you can achieve with the right mindset, collaboration and initiative. I have not found Standard Bank to be at all resistant to change, in fact it is very change resilient given all the ongoing change within the organisation. Sure, Standard Bank is a complex organisation with ingrained legacy systems that make effecting change harder, but sometimes all it entails is asking the right questions, owning the problem and then driving through to resolution."
Balancing operations, IT and independent finance teams
"You can't be an effective CFO if you don't know your business. When a tough problem pops up, it is important that you understand the context, the drivers and the levers that can be pulled to get it resolved. My deep understanding of IT in my role allows me to recognise the problem, the influencers and opportunities for resolution. IT is a black box for most people, but I am able to harness my skill set to hold constructive conversations that lead to investigation."
"IT does excite me and I want to get involved, but as a CFO I always have to have a degree of impartiality and independence. With this context in mind, I encourage my team to get engaged and understand the business of IT. I encourage them to get into the work and to work with their business partners to solve problems but regularly remind them about the need to be independent. It is important that they never get to the point where you have to manipulate a number or feel uncomfortable reporting a number, because then you know you have crossed the line."
Ringing the changes - agility
"Standard Bank is fundamentally transforming its IT function. Moving from a stoic, 'command-and-control' type function to an agile, self-governed, engineering-led organisation. At the heart of this is a cultural transformation, the implementation of the Scaled Agile Framework - where more than 2,000 people have adopted agile ways of working in feature teams - numerous technical transformations and the need to achieve certain affordability targets."
"Through this process, Standard Bank has been able to improve the cadence and speed of delivery of change, has seen significant improvements in employee engagement and has seen improvement in the cost of IT delivery. While not the primary intent, Standard Bank has also received numerous accolades and recognitions in the process, with Standard Bank often being referenced in conversations as being pivotal to the transformation of IT in South Africa."
Ringing the changes - communication
"In the early days of the Group IT transformation it became clear that, unless the finance team transformed as well, we would become irrelevant. As a result, we needed to radically relook at how we run our staff engagement and processes."
"Through this we adopted a more inclusive communication style. This is fundamental in all we do. Not only are we more open and communicative as a team, but we are also more inclusive in how we run certain of our processes, for example our month-end process consists of a series of 'stand-ups'. Through this we have seen greater accountability for numbers, more predictability, less surprises and more stable numbers sooner.
"We have also visualised our work through the use of Kanban walls. This is a great way to visualise all tasks in flight, prioritise and ensure accountability. This way the actions have collective ownership and there is clear transparency of when things are not on track. This has been great in ensuring the team owns the outcome."
"As a result, we are also starting to see greater staff engagement and more reliable and predictable numbers."
Any advice for other CFOs?
"It is important that we are all open to change and sometimes you need to take a step back and let go a little bit and see where it ends up. To do this you need to get into the work and understand what your business partners want and ensure that you are adapting your financial measures. You have no one but yourself to blame should your goals and outcomes not be achieved."
Sean's lessons from the core banking transformation
1. It is impossible to manage every component of a mega programme. Make sure your processes are robust and you have a strong team to support you.
2. Make sure you have a key set of principles and stick to them. You can't remember a different set of principles for every scenario.
3. Because of the above and the guarantee of consistency it will bring, don't be scared to ask tough questions.
Sean's leadership principles
1. Lead by example. It is important that you live up to the expectations you expect the team to deliver on.
2. Take the team along the journey with you. Tell them what you are thinking, why you are thinking about it and what you want to change. It is key to get buy in to change.
3. Be willing to get into the detail and get your hands dirty. This shows you understand, are committed to the journey and willing to help.
4. Don't be scared to challenge and be challenged. Sometimes this is easier said than done, but it sets a clear open and collaborative tone.
5. Say it like it is. Sometimes we all beat around the bush and are too polite to say what is really on our mind. This doesn't always keep everyone happy.
This article first appeared in CFO Magazine.