Leader, Did You Notice The Culture Changing In Finance?

This article is co-written by Talita Ferreira and Anders Liu-Lindberg

The finance function is changing. We did this to the function by keeping it in constant transformation for the past two decades. We worked with the systems, the processes, and the people. Everything has changed because of what we did.

However, something also changed because of what we did but not because we were trying to drive this change. The very culture and deeply rooted behaviours of the finance function also changed. Or at least they ought to if we want to realize the full potential of the transformation. When cultures, beliefs, habits and actions don’t support a transformation, there can be no resultant change.

If culture and behaviours are not changing, the transformation that we’ve inflicted upon the function will feel like an organism from an alien planet. One that cannot live or breathe in the finance function around us. It will not be welcomed, and it will not thrive. All our transformation efforts will be lost. This is an unacceptable scenario, so we must work actively to change the culture and behaviours of the function to drive a real change. First, let’s look closer at culture and how it’s governing the likelihood of the success of the finance transformation.

How culture eats everything else for breakfast

What is Culture?

Many refer to culture as the glue that holds an organisation together, or a type of immune system that repels everything that does not fit, or the sum of values and rituals that are jointly shared from within. Some also refer to it as a type of social unconscious – which helps to create the belief that culture is intangible and soft. This is something to watch out for, as culture affects everything we do in an organisation. Culture should always be consciously worked at, as it encapsulates the behaviours, values and attitudes that manifest in interactions with employees and all other stakeholders.

Another way to view culture is that we, as finance leaders, create experiences for our teams and the people that work for us. These experiences create certain beliefs in their minds. These beliefs, in turn, create habits, and then these habits drive their actions, and in turn, actions are what drive the results of the organisation. This is the approach from the book ‘Change the culture change the game’ by Roger Connors and Tom Smith.

As an example, if you join a new organisation and you notice that the way to get ahead is at the cost of your peers and colleagues, you might start to withhold information and only share what is absolutely necessary. A belief manifests that if you want to get ahead, information is power and should only be revealed when you can look good from it, there is something in it for you, or it can improve your positional power.

In this type of organization, each leader will have a very silo orientated mentality and collaboration will be at a very low level; impacting the overall results of this organization very negatively.

In this type of organization, each leader will have a very silo orientated mentality and collaboration will be at a very low level; impacting the overall results of this organization very negatively.

Culture
Source: Image interpreted from ‘ Change the culture, change the game’ by Roger Connors and Tom Smith

The best thought out strategy or transformation will fail if we can’t get people to change their beliefs, habits and actions.

But how can we impact culture?

  1. Role modelling
  2. Make conscious choices about what habits and beliefs will drive the new culture
  3. Hold people accountable for driving the change and disincentivise old ways of working
  4. Internalise the change so that it lasts beyond the first few town halls

We must realise that people don’t buy what we say, they buy what we do through the behaviours we demonstrate, as finance leaders, each and every day. That is why role-modelling is such a powerful thing.

We can always complain about what other departments are doing or are not doing. However, the best way is to start with ourselves to actively demonstrate the change. The finance leader actively engages with the business to understand the results, provides the insights and helps the business to drive success.

The next crucial component to impact culture is to decide which habits and actions (behaviours) support the old ways of doing things and which new habits and actions (behaviours) support the transformation. We want to move away from old behaviours and incentivise innovative ways of doing things.

If we stay with the business partnering example – we want to move away from Finance telling the business they got the forecast wrong, Finance should be working with the business to provide insights that inform the forecast. It is a joint process to get to the most reliable figures for the future plan.

We see many companies that run workshops to define the old and new habits and actions that would support a transformation, but then they spend no efforts on making sure that old behaviours are disincentivised and new behaviours are recognised, rewarded and that everyone is held accountable for the (new) way they are doing things.

This is the third piece in the puzzle of changing cultures. We want to move away from the behaviours that label us as the controllers, holders of the purse strings or the risk-averse group that does not understand the bigger picture of the business or what drives business success. There is no point to control at the back end of the business if there is no front end because the business failed.

The final piece in changing culture is to ensure that the new behaviours and actions are internalised way beyond the implementation date. This is when change is really adopted as a new way of doing things and becomes part of everyday life.

We find that many companies focus on the go-live date, especially in technical system implementations or outsourcing. At the go-live date, there is still a lot of resistance to the change, and the behaviours have not yet been internalised and adopted. This can be expressed as encouraging adoption and integration vs. managing resistance.

We would be remiss if we write about culture and don’t mention what drives high performing cultures. Without high-performance cultures, there are no high performing teams. Google’s Project Aristotle research [insert source] proved that phycological safety is a critical ingredient for a high performing sales team. Psychological safety means that the individuals in the team feel safe to take interpersonal risks, e.g. to say what they really think without the fear of being ridiculed, reprimanded or unexpected consequences.

We want our Finance teams and business partners to tell us why they believe the strategy will fail so that we can take early corrective action and avoid failure.

Finance leader, you must own culture for your people to be successful

We can only be true business partners if we start role modelling the right behaviours within Finance and recognize and incentivize our teams accordingly. We can’t expect the business to follow if we don’t start first and demonstrate that we want to be true advisors to the business. Our analytics will only lead to insights if we inspire people to behave differently. We need to be advisors, analyse insights and provide better solutions to the challenges facing the business.

What can you do right now? You can brainstorm with your team, which behaviours and actions serve the old ways and need to be stopped and which new behaviours will ensure success. Hold each other accountable to these new behaviours and start role-modelling in Finance today. Invest in helping people to adopt and internalise change way beyond a go-live date. Determine how much of your project investments and budgets are focussed on this piece that is crucial to success.

It might not be possible for you and your team alone to drive the culture change. However, if you start role modelling and show the benefits of the new ways of working others will follow. So the question is: are you ready to drive the much-needed culture change in Finance and step up to the plate as a leader?

This was the fifth article in the series about leadership transformation in the finance function. You can read previous and other articles on my blog site here

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