Why CFOs must prioritise culture in a downturn

Culture matters. It helps leaders build companies that will thrive in even the most difficult times. But when it comes to culture, companies often overlook one of their most strategic decision makers: the CFO. So how can CFOs lead top-down change to create bottom-line prosperity?

In a recent webinar, The culture-first CFO: How to create a culture of employee ownership in an economic downturn, Daniel Kniaz, CEO at Weel (Previously DiviPay), sat down with CFO Damon Hauenstein to discuss how finance leaders can navigate choppy waters by becoming catalysts for cultural change. Here are their takeaways.

Leading on culture, not just numbers

CFOs must prepare their business for the worst of times and the best of times: recession and recovery. We’ve all seen the headlines. And while we can’t be sure Australia is headed towards a recession, we can be sure that culture influences a business’ productivity and profitability. 

But while you might not be able to directly measure the impact of behaviours, mindsets and working patterns, Hauenstein says you’ll definitely see things reflected in other numbers.

“Employees are our most important asset at Weel. So we really over-index on initiatives that make our team happy, motivated and aligned to our mission. Because there’s a genuine belief that we get outsized returns for the investment we make in that talent function across the business,” Hauenstein says.

Create a healthy spending and savings culture with guardrails that keep your business on the right track. Read Weel’s latest blog to discover more ways to recession-proof your business.

Building trust and confidence

Thoughtful, broadly communicated messaging is key to building company confidence. Whatever your business outlook, Hauenstein says leaders should be mindful not to send mixed signals or gloss over information. The wrong communication can quickly lead to insecurities — and consequently erode trust.

“One critical thing is probably just to be clear with the team on the position of the business. People lose trust if they think things are great, and actually, things are less great than they understand,” Hauenstein says.

Daniel Kniaz, CEO at Weel, says it’s important to make numbers, roadmaps, plans, challenges and concerns readily accessible to everyone on your team.

“At Weel, we make it a point to constantly share our revenue growth, runway and other key metrics. I’m often quite surprised when new employees will come up to me and say, ‘Hey, I love hearing this. We’ve never heard this elsewhere.’ And I think it’s really important because it helps build psychological safety,” says Kniaz.

Delivering bad news with honesty and compassion

Layoffs are the news everyone dreads, that no leader wants to deliver. Unfortunately, it’s a stress test some CFOs will have to face, but Hauenstein says there are steps that can be taken to adapt and even strengthen your culture.

“We’ve been fortunate enough to enjoy a period of disciplined growth at Weel. But we’ve had customers and finance leaders in our community tell us that if you have to do it, do it quickly and compassionately. And then, reposition the business and make it clear to everyone that you’ve now got a sustainable business model and cost base in place to succeed in the market. Make it clear your employees are part of the future of the organisation,” Hauenstein says.

Creating a culture of shared accountability

The road to business recovery is best travelled when employees know where they’re going and why. Partnering with other functions to establish realistic targets can help teams and individuals see how their involvement contributes to big-picture company success.

“Everyone should be trying to achieve the same outcome for the company,” Hauenstein says. “You might have two or three company-level objectives that cascade down to two or three team-level and individual objectives. When everyone has a better appreciation of what the business is trying to achieve, it encourages them to think about their own function and the ways they can reduce costs or even just recommend more efficient ways of doing things.”

According to Hauenstein, the same principle can help rein in company spending and boost morale. Employees at Weel use their own virtual company card to pay for things like coffee, travel, team social events and subscriptions.

“There’s no way the CFO can be across every decision and every dollar that goes out the door. It’s just not scalable. We want to set the team up to make some of those decisions themselves and help identify where there may be cost savings that allow us to achieve our goals.”