The Culture shift: lead on culture, not just numbers
Culture is important. It’s a fact that culture influences productivity and profitability.
In recent years we’ve seen work culture come into the spotlight as employees started working from home during the pandemic. Businesses world-wide gained first-hand experience of the financial impact that resulted from this massive corporate culture shift.
It is important to know that cultures change – it is inevitable. What makes culture shifts difficult to navigate and lead in an organisation is that it’s coupled with change. Businesses often struggle with the temptation to preserve or get back to their pre-COVID culture. But acceptance of change is the first step to a healthy culture.
That is where the CFO steps in. Forward-thinking finance executives have for years had the tools and data to help shift and nurture cultures.
Why is culture so important to the role of the CFO?
- Culture affects profitability
- The CFO has been identified as the position with influence on culture. The budget for culture influence lies within the finance department.
Deloitte’s North American CFO Signals survey found that on average CFOs aspire to spend about 60% of their time as catalysts for change and strategists in their organizations.
The definition of culture is: “The shared beliefs and assumptions underlying an organisation”. Thus, to change culture, it’s required to change beliefs.
Here are four steps to change culture from within the finance function:
The CFO is often in a unique position to identify a dysfunctional culture, or elements negatively affecting the company culture – and to help navigate change. Identify culture dysfunction by asking yourself what you dislike about your company culture and what the financial and other implications of that problem area are.
Complexity causes confusion and introduces the risk of missing growth opportunities. CFOs realise the complexities businesses have to deal with and they know that this complexity is more than likely to increase. The CFO function also has the influence to remove some of this complexity.
Failure to integrate acquisitions, expanding SKUs, new product lines and new business categories to meet customer demands can be detrimental to the organisation. Often, businesses have not taken the time to optimize their systems, which has led to temporary fixes, one-off exceptions, and unprofitable complexity.
Removing complexity helps identify opportunities while creating space for a new culture to be established.
Reframe existing narratives
To reframe existing narratives, you first need to unfreeze these narratives. You do this by addressing the unwanted behaviour. Then you create a narrative that shows the value of the beliefs and the pitfalls of the existing beliefs. Once you’ve identified and communicated the culture-crashing behaviour and beliefs, you need to articulate the belief, behaviours and outcomes you desire going forward.
Replace existing beliefs
Finally, to implement change and replace existing beliefs, it’s necessary to walk the talk and role model the desired behaviour. Success requires not only a shift away from traditional mindsets, but leadership from the top, including senior executives and key management officials across the entire C-suite. To shift behaviour on a cultural level, it might be worth considering recruiting new team members with the desired values and behaviours to help drive a culture shift.
Reinforce desired beliefs
Reinforce desired beliefs by incentivising the desired behaviour and implementing an open-door policy.
In conclusion, it is necessary that CFOs fulfill their fiduciary responsibility and at the same time shape corporate culture by creating a fulfilling work environment for employees. CFOs must understand that bringing any of these reforms to life, especially those with significant social sensitivity, is much more than signing a pledge or issuing a press release, it’s taking action and driving change by altering behaviour at the top.