Leading-edge CFOs understand that shaping corporate culture is an imperative of their role; indeed, culture is an inherent part of their fiduciary responsibility to shareholders and the board. The Katzenbach Center’s survey findings, and its experience in working with clients, suggest a way forward for CFOs and other senior finance executives who want to do more to create a corporate culture that facilitates real, sustainable change.
It starts, of course, with laying a solid foundation: ensuring that management processes and systems are sound; leading the company’s planning, budgeting, and resource allocation processes; and setting the tone and focus of business review sessions. However, these are only table stakes. In addition, CFOs must set the example by encouraging open discussions about market trends and business performance, about business opportunities and risks, and, yes, about business failures — not to assign blame, but to assist in identifying strengths and weaknesses and in finding solutions that will work better in the future. Over time, this approach creates organizations with a better culture of performance.
CFOs also must shape cultural priorities through their interactions with their senior peers, and through deployment of finance partners who can engage business leaders to drive better performance. These partners must have financial acumen, of course, but also a strong understanding of the business and its drivers, the ability to tell a story about business performance, insights on where to take the business and how, the communication skills to influence business leaders, and the confidence to model the right performance-enabling behaviors.
Recognizing that such talent is hard to find, nurture, and retain, leading CFOs will employ multipronged approaches in order to continually develop the next generation of business partners, offering clearly defined career paths, training programs and rotating assignments that provide broad experience across the enterprise. In employee performance reviews, leading CFOs will create a safe environment in which to discuss underperformance and acknowledge errors and prudent risk taking.
The CFO’s personal leadership in these undertakings is crucial. Spending time with finance leaders, codeveloping a vision with them, engaging them in the process of being culture change agents and encouraging them to test their own leadership style creates permission for finance-enabled cultural evolution. It encourages members of the finance team to see themselves as change agents in the businesses they support and as co-leaders in business performance.
If you’re not sure how your finance organization measures up to this model, ask yourself a few questions. Do your non-finance colleagues view your department only as an accountant and report generator, or also as an enabler of solutions? Does your department encourage, or discourage, prudent risk taking, new ideas and innovative thinking? Does it provide an invigorating work environment for finance professionals, who are thus excited about their impact on the business and their individual professional growth, or does it stifle their contributions and development? Finally, does finance act on — and build on — the organization’s cultural aspirations, or simply act as a support function following the lead of the business?