CFOs: Leading Cultural Change – if you don’t do it, who will?

By Jens Madrian, Chief Financial Officer and Chief Commercial Officer, Reactive Technologies, and member of the A4S Advisor Council


I’ve spent a large portion of my finance career looking backwards, dealing mostly with legacy issues. In my role as CFO at Reactive Technologies however my key focus is looking forward and shaping our strategy and business growth to cost-effectively enable our clients to move to a greener energy future through digitalization.

In a world where digitalization is becoming increasingly important, and the speed of change in business models is disrupting various key industries, I don’t think CFOs have the luxury of predominantly looking back anymore. We need to encourage our finance teams to look ahead and be involved in shaping business strategy.

Without a doubt, this transition requires cultural change in finance – both in our way of working and our role in supporting the business.  I have spent a considerable amount of time as CFO driving cultural transformation in my teams. I have done this by sending them into the business and organizing succession planning based around team members’ qualities as business partners. This has led to a higher degree of connectivity between the finance function and the rest of the business, with greater mutual understanding and respect.

Finance people are generally technically and commercially astute as their way of working is logically deductive, thus not too different to their colleagues in commercial functions. They both have a good understanding of models, and they both usually have a strong analytical background. The common problem that I’ve encountered however is that finance professionals sometimes miss part of the business context and therefore don’t have a firm grasp of the operational execution of the business strategy.

This is why I think it’s important to bring finance closer to the business units whilst avoiding the former “going native” and enabling them to continue to be completely objective and independent in their assessment.

This transformation is made easier by equipping finance professionals with the analytical tools that enable them to take that forward perspective. Whereas traditionally, finance predominantly focused on so-called lagging indicators relating to financial performance, these would only describe the outcomes of what has happened – and give in themselves little insight into what has been driving these results.

While the tools to understand these leading indicators already exist, they have usually been in the hands of other functions, such as the commercial and operational side of the business. A key requirement for finance professionals is to step outside of their experience comfort zones and begin working more closely with their colleagues in those other functions to fully embrace the key drivers for financial outcomes, rather than being trapped in a finance bubble which will become increasingly disconnected with the business and with customers as digitalization and future trends disrupt the old ways of working.

As CFOs, we should seek to understand what the leading indicators are to make better revenue forecasts, and, frankly, to be able to see way ahead of any financial numbers if our company is on track or not. And in order to do that, it is vital to have an in-depth understanding of key operational and commercial drivers and the effect of social media – all of which impact, for example, customer behaviour.

This broadens your view substantially and it makes you a more holistic finance professional. That is one of the critical roles CFOs has to perform for businesses – the ability to not just be curious, but also to break with tradition and allow their teams to culturally transform in a way that enables businesses to keep pace with rapid digital and societal change and to meet the evolving needs of their customers.

That also means CFOs need to step up and protect their team members should they encounter problems along the way. Easier said than done, I know, but there is no way around it. As the CFO, you are at the top of the pyramid, so if you don’t drive and lead cultural change in line with your business strategy and needs, who will?


LONDON - UK - 16th Nov 2017.Accounting for Sustainability  A4S, CFO and Investor Session held at St James's Palace in London and hosted by HRH The Prince of Wales.
Photograph by Ian Jones for A4S.

Brian Lawson, CFO, Brookfield Asset Management writes about his key takeaways from the A4S Summit 2017

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The Network brings together a group of leading CFOs from large organizations seeking to embed the management of environmental and social issues into strategy and business processes.

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