Kristian Ladefoged

Kristian Ladefoged

Kristian Ladefoged is chief financial officer at Container Solutions

A CFO’s Case for Creating an Inspiring Organisational Culture

October 17, 2019 by Kristian Ladefoged

In my daily job in Container Solutions, I work with numbers. Budgets and forecasts. Coaching on profit and loss management. Financial strategy.

Most people in my role—in fact, most managers—focus on numbers, and in making sure that their business keeps running. They ask themselves questions like:

  • Is our utilisation rate high enough?
  • Is our hiring pipeline filled?
  • How is our sales pipeline looking?
  • What does our cash flow forecast look like the next three months?

All important questions. But as a leader you also need to ask your organisation, and yourself, a few other questions:

  • Are the people who work here happy?
  • Is the utilisation rate too high?
  • Is this a great place to work?
  • Do I do enough to make it a great place to work?

These questions are just as important as the first set of queries, but they are rarely asked.

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Over time I have learned the importance of culture. It is absolutely vital to keep our company healthy and should actually be the heart of any organisation—especially those that aspire to be truly Cloud Native. If your culture is working, your numbers will nearly take care of themselves.

Curiosity and Team Spirit

How do we make sure our business is innovative, creative and the best place to work?

Well, for me, the answer is rather simple. We need to empower and foster curiosity and team spirit within our business. But that’s no simple task.

We have all seen companies market the benefits they provide. Competitive salaries, free lunches, pension arrangements, free gym memberships. But these things do not by themselves create a good organisational culture.

Instead, our people at Container Solutions ask for a creative environment with space for personal development. Where we can be ourselves and create, be heard— and even a place where we can rest and reflect in between sprints of hard work.

To foster this kind of culture, leaders and executives need to create and be held accountable for a working environment that encourages these needs. But what does this have to do with ‘why culture matters’ ?

The answer is just as simple. Your business will die if you do not pay attention to culture.

Commitment Before Execution

Everyday we try to build our business. We want to create a business that not only works financially and shows healthy and positive cash flows, but more importantly, a business where people feel inspired. A place where people love to go every morning and leave in the afternoon happy. A place where people learn. A place that creates and fosters team spirit. A place where work-life balance is a key metric. And a place where you can have fun.

Building a business is not easy. It takes time and, for a leader, it comes with huge responsibility: not just to keep the budget in balance, but to be accountable for making the workplace the best place to work. For your colleagues, this leads to increased well-being and promotes and nurtures curiosity and inspiration.

Customers will immediately feel the side effect of an exceptional workplace, as they will benefit from higher quality and subsequently better solutions. A total win-win. For everyone. For all our stakeholders.

I have learned—frankly, by making mistakes— that you can’t do any new things, make any changes to your business model, or innovate in any way if your own organisation’s people are not committed. They need to be committed to the greater goals and want to work as a team towards achieving those goals.

In other words, they need to not only work in the business, but on it. And in a healthy organisational culture, they will.

Sometimes, I will have what I think is a good idea, and I immediately go into execution mode. For instance, I had what I thought was a simple change in process, which my team had to help implement. Because we were not really committed to the change and properly aligned, it ended up in a real mess, and we had to do it all over again. Frustration on all sides.

I have learned that I need to get my team fully committed to a new idea before we can jump into execution mode. Sometimes they’re not going to support your idea because their workload is already heavy. Or they are committed to working on other challenges. Or maybe you haven’t properly persuaded them of your idea’s merit—or of how your idea can benefit your company.

Creating a great place to work means creating a workplace where people want to run the extra mile by their own choosing. A place where people feel inspired to create new innovative ideas. A place where people can see and execute on new opportunities.

Three Horizons and Beyond

Hold that thought. Let’s think for a moment about cash flows in a business, using the McKinsey Three Horizons Model.

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The first horizon is about creating the cash flows necessary for a business today. These cash flows are important. But if we do not create new opportunities or execute new ideas, will these cash flows be there in one year? Or even only six months?

The second horizon is about creating the cash flows necessary to live as a business tomorrow. These cash flows matter because here we have to be innovative, analyse what the market is doing, and find our next big ‘gig’. Most companies do not allocate resources (time) to be spent on horizon 2.

The third horizon is about the long shot. It is about creating the cash flows necessary to sustain the business the day after tomorrow, or cash flows that will allow your business to grow exponentially.

But how do we know where to go the day after tomorrow? Well, we don’t, but if we create a space to discover this, our chances increase significantly.

I like how the Business Model Canvas works to help visualise and simplify concepts and ideas. The model is a great way to test value propositions and to understand what we need as a business to scale our value proposition and how we can make sure it happens. It’s a simple and easy planning/strategy tool.

Most managers focus on the two items at the bottom of the Business Model Canvas: the cost structure and revenue streams. We need to make sure that our business is profitable.

I couldn’t agree more. But to be honest, these two parameters will solve themselves, as they are just a side effect of doing real business.

Our culture is the core of our business. Leaders can’t start developing processes or strategies to increase revenue streams or decrease cost streams if the workplace culture doesn’t work. If it doesn’t foster innovation to create innovative processes and strategies, if people are unhappy, if people do not learn, if people are not connected, if people are not heard, if leaders do not listen.

We can not start developing business model canvases if our culture does not work. It is that simple!

This is a shout out to all leaders who are devising new strategies, new processes. Make sure you have asked yourself these questions. If not, I highly recommend you to do it before you embark on something new.

 

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