Part of the “Purpose-Driven CFO” series
In the introductory blog in this series, my colleague Joel Bernstein asked CFOs to share their sense of purpose and explain how they motivate us and our organizations to do better. Here’s what being a purpose-driven CFO means to me.
Among the many charters for a strategic CFO, running a sustainable business is at the top of the list. I view these three aspects of sustainability as the most important: environmental impact, employee engagement, and fiduciary responsibility. How involved we become as CFOs in managing these aspects of the business can distinguish who we are as leaders and our legacy. Here’s my approach to each.
Reduce your environmental footprint. Running a sustainable business means mitigating our impact on the environment and the planet. We have a responsibility to manage our assets and resources efficiently, whether that’s electricity, water, or commodities in the supply chain. As a CFO, I support the adoption and deployment of tools and programs that enable environmental sustainability. SAP offers software to help businesses run more efficiently and thereby make those limited and scarce resources go further.
Drive employee engagement in nontraditional ways. There’s also a human aspect to running a sustainable business. To do that, we need to attract and retain the best people. Increasingly, smart people are motivated by more than just taking home a paycheck. What’s more important is having time to explore interests, collaborate with other like-minded colleagues, and to work together to do great things in the world and in society. That can become a very engaging and energizing concept within an organization if you harness it properly. I’ll go into more detail in a future post.
Ask tough questions related to compliance, business ethics, and trade. Running a sustainable business must also focus on compliance, fighting corruption, and ensuring fair trade practices. With better transparency into your supply chain, for example, you can identify and eliminate any use of slave labor in your manufacturing processes and your supply base. As CFOs, we can help to ensure that our organizations have the transparency needed to avoid those practices and defend our business against suppliers that are not trustworthy in this regard.
One of my purposes in running an intelligent finance organization is to make sure we’re doing the right thing for our customers. The importance of doing this is best illustrated by looking at what happens if your culture fails to reward honesty and integrity.
Consider the royal commission that’s underway in Australia, investigating misconduct among banks and financial services firms accused of subverting their customers’ best interests to improve their own financial results. Board members are resigning, institutions are being fined in the millions, reputational damage is profound – and it’s not over yet. This is certainly not a recipe for sustained business success.
Staying the course
When I read about what has happened, I think about all of the companies pushing for success in a very competitive environment. Somewhere, they lost their way. Without a guiding purpose, they went down the wrong path without asking the right, sometimes tough, questions and lost their integrity in the process. And it’s easy to see how this could happen. We’re all under pressure to deliver short-term results. I support the sales and marketing organizations within SAP, and that can be a very high-pressure environment.
But focusing on internal requirements or sales targets to the detriment of our customers is not our culture at SAP. Short-term ups and downs in business are a given, but what’s most important is that the decisions we take are aligned with the long-term interests of our customers and our business strategy.
And that is not just the CFO’s responsibility; it ties back to the board. CFOs often sit on the board to ask the tough questions – for example, “Do we have robust policies around compliance and programs focused on customer success? Does our culture embrace the ethics of acting in the best interests of the customer?” If CFOs are not asking these questions, then chances are nobody else is. We need to understand and accept that that’s a big part of our job.