What is culture, who sets it, and what does that have to do with accounting debits and credits?

Having money problems?  That sounds simple enough to fix, right?  Spend less than you bring in or bring in more!  Working with numerous companies over the years, I’ve learned it’s likely not that simple.  Losing money is likely a symptom of other problems, not the actual problem.  Find the actual problem, commit to fixing that problem, which will be a surprising challenge, and you’ll likely have solutions for the mysterious problem you thought you had.

I’ve worked with a lot of companies, and they’re all in various stages of a business life cycle: start-ups; ramping up, fast growing; established, stabilized and running strong; on the decline.  Due to the nature of the work I and my colleagues do, I am often hired by a company to help them solve some imminent challenges.  There’s often, but not always, a reason why a CFO leaves, prompting a need for a interim position.  

One matter I’ve been talking a lot about in almost every situation and conversation I’ve had lately is “culture”, and it can be the real problem for financial troubles.  Oh, to be sure, nobody says “Hey, our culture” is our problem.  It’s not that simple.

I sat through a recent training offered by the American Institute of CPA’s recently, and it stated that culture is established when two people come together for a common cause.  The “tone at the top” is set: How will we handle problems? How will we manage employees? How will we most effectively use employees?  What will our customer service standards be?  Why do we exist?

A company’s culture either hinders or unleashes employees to advance the established mission of the company.  Employees usually come into a company excited to join the cause.  They will quickly learn if they believe the cause is real or if it’s “every man for himself!”  Is there a healthy fostering of ideas and collaboration?  Does leadership stick to their commitments?  Does leadership encourage people to think independently?  Does leadership clearly communicate objectives and then let employees do their jobs to accomplish those goals?   Do employees feel like the boss is always looking over their shoulder for a “gotcha”?  Does leadership ignore requests for legitimate help from their staff?

If there is a strong and valid business plan, a culture of leadership governance in which the company’s mission is stated, values are well articulated, hiring is done in accordance with those values, employees understand their responsibilities, and finally  they’re allowed to carry out those objectives with a proper system of communication and accountability, then leadership has likely mitigated the risk of organization behavior failure. 

So, I ask again, are you have money problems?  

If you’re the owner of the business, are you fulfilling your commitments? Are you mentoring your team? Are you available with a steady stream of communication? If not, perhaps your team members are disenfranchised, they have lost excitement about the cause.  I read a statistic that over 80% of employees are actively looking for jobs, including CEO’s!  Why? Because companies don’t “culture” very well!

Do your employees feel empowered to unleash their creativity?  Instead do they feel as if they have to seek permission for every step of their job?  Or maybe you’ve hired staff that are “underskilled”, not seeking to carry out the job you need them to do. 

If you’re losing money, of course, it’s due to revenue or spending problems.  However, how did those matters come to be? Declining sales don’t just happen in a vacuum.    Signed contracts with unfortunate terms don’t just happen. A continual stirring of ideas and creativity is fostered in the right environment.

Don’t look for a new job to get out of the jam.  Examine your culture.  I do believe in a fresh set of eyes.  So, I’d be happy to have a conversation!