There’s a reason so many companies value their culture above other business factors. Corporate culture is often the cornerstone of success. When employees are happy and productive, the company has the opportunity to thrive. As important as culture is, it is not usually associated with the financial side of the company, so in turn CFOs don’t concern themselves with contributing to positive culture.
History has proven that shouldn’t be the case. During the economic downturn of 2008, Wells Fargo took a chance in buying the financial services company Wachovia. When other banks were struggling to stay afloat and seeking government assistance, Wells Fargo was making acquisitions, taking risks, and benefiting from their strategic moves.
Wells Fargo chairman and CEO John Stumpf attributes this success to the culture of management and solid CFO leadership. As he told the Austin Business Journal in 2011, “We want a fortified balance sheet and strong capital. The difference actually is made in the go-go times. Don’t do stupid things. Stick to your guns in the go-go times. When things turn tough, then you’re going to have the resources at your disposal to make some very good financial decisions for the company.”
CFOs who want to improve their strategy and create a strong foundation in anticipation of tough times need to invest more deeply in the culture of their company. They can do this with the following approaches.
Choose Your Management Style
Culture is likely dependent on the management styles of the company’s leadership. A CEO who is hands-on will inspire more employees. A CFO who is more involved in even the minute financial processes will show her dedication to the organization. However, just as every company is different so are the cultures and management styles that create them. As CFO, you should find the balance of management tactics that suit your personality, your team and your role within the company.
You could be the politician who is methodical and precise. You could be the revolutionary who takes risk and identifies new areas of exploration. You could be the calculated boss who takes his time to avoid mistakes, the go-getter who sets lofty goals, the traditionalist who is firm, but effective or you could be the visionary who reaches for the highest heights. The management styles of CFOs vary as much as the people who occupy the role. No style is more successful than another, but finding the one right for you will make a big difference in how you influence the culture of financial success.
Regardless of how you manage your team, you should set boundaries and traditions that become standard and expected of the culture. Standing firm in your beliefs of how to conduct business, complete certain processes and maintain regulations will set the company up for growing comfortably. When you master the basics, you can begin to expand your skills. The same goes for financial departments of companies.
When culture is clear and has less chance of changing every few months or years, a company has the opportunity to make financial leaps. Established tradition helps create room for a flexible strategy. A CFO who knows the non-negotiables of a company’s culture can more effectively discover the places where risk, chance and possibility for gains are more plausible.
Stick to Your Guns
As Strumpf stated, it’s important to stick to your guns in times of triumph to prepare for the downturns. This allows you to stay steady in your success. A CFO should be a leader of uncompromising integrity. Someone of that stature is more likely to contribute to a positive corporate culture and innovative strategy. Of course, there are some things a CFO must never waiver on, such as compliance, financial management and growth, but knowing how to remain strong in these areas means they will be more successful in adapting as industry changes.
While the Wells Fargo example is a springboard of potential for CFOs, it should be noted that the company is currently undergoing a federal investigation of creating fraudulent accounts. That type of risk is one that CFOs should avoid, but instead they can learn from the performance of the institution during the Great Recession. That dedication to its values speaks volumes about how to build a solid culture and financial strategy.