Change expert Rick Maurer provides an excellent framework to understand the Cycle of Change in his book Beyond the Wall of Resistance (Bard Press, 2010). The cycle is presented below in Figure 1.

The diagram captures the natural state in which many people find themselves – in the dark.

When you are in the dark, you do not perceive any need to change. You are happy and comfortable with things the way they are. This can be true for groups as well as individuals. This position enjoys a high degree of inertia as we stay in the routine of what we know. It is a comfortable state (except for those opportunities that keep getting missed and those nagging problems that keep creeping up).

The cycle of change begins when someone sees the challenge. This could be a definite threat to yourself or to your organization. It could also be an opportunity for growth or expansion. Either way, seeing the challenge awakens the need to change.

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Recently, I received a letter from a participant in one of my seminars. A key point I often make is that people in finance should “stop doing dumb stuff.” Much of this “dumb stuff” masquerades as standard finance processes. But if you reflect on its purpose and how well the steps actually fulfill the purpose, you quickly see it clearly is dumb stuff.

Some specific examples include:

(1) Budgets whose targets are out-of-date before the year even begins.

(2) Monthly budget variations comparing actual performance to budgeted performance when the previous summer’s budget assumptions have long since been proven wrong.

(3) Producing accounting reports no one is looking at or needs.

(4) Producing monthly statements for operating people who manage on a weekly or daily basis.

(5) Planning, budgeting and forecasting at the chart of account level just because the system allows you to do so. (Just because you can does not mean you should). more

For this month, I wanted to share some thoughts on change. In Texas, we often think about change when August rolls around. As you may know, this summer has been a scorcher. Tuesday is forecast to be our hottest day so far and is projected to reach 108 degrees. It is the 39th day over 100 and the 32nd day in a row. At this rate, it may approach the record of 69 days over 100 in 1980 with 42 of those in a row. That was my first summer working in Dallas. When you live through that heat, it is easy to think about change.

But rather than change, most of us choose to endure. And to a large, degree perseverance is openly admired and even praised - but only if it is tempered with common sense. In Texas, we have learned to respect the weather (that is why swimming pools are so popular). You avoid the heat of the day. You avoid doing dumb stuff like working outside in the heat of the day. You learn to change your routine to be successful. So for August I will share some of my thoughts on change. more

Today, I spoke in Singapore to 300 CFOs as part of the CFO Innovation Asia Forum. The topic was Future Ready: How to Master Business Forecasting and part of a world speaking tour on behalf of IBM. The event provided an interesting perspective that contrasts to the economic concerns faced in the U. S. The key points I noted include:

1. Most Asia Pacific countries are experiencing what they describe as moderate growth of 5% to 9% while most US companies long to return to those levels. The exception is Japan which is still suffering the effects of power shortages due to shutdowns in capacity caused by the earthquake and related tsunami that hit the Fukushima nuclear plant. But even Japan expects growth in the second half on 2011 as governmental infrastructure spending is released to help rebuild the north of Japan’s devastated areas. more

The world if going Global… and so am I. This blog post is being written from the Qantas Club at LAX. I am headed to Australia for two weeks of speaking. Four sessions for IBM Cognos Finance Forum, three CFO luncheons for Agility Consulting and it all starts with a May 4th appearance at the Institute of Charted Accountants — Australia on May 4th. All I can say crossing the tarmac at LAX is the A380 is the biggest plane I have ever seen (or will likely ever fly on). It is a cross between a bus and a super tanker. Look for more thoughts as I track how finance is getting smarter around the world.

I will report in again from the land down under. Text me your questions (ATT lets them come into my cell phone for free).