What Finance Departments Can Learn from Startups: Creating an Agile Culture and Workplace
With the rapid change and evolution that many finance functions have had to implement of late, perhaps there’s something to be learned from a business model founded on the concept of rapid change and expansion: the startup.
According to Unilever, 80% of corporations consider startups to be invaluable sources of innovation that fuel growth and provide pioneering business solutions.
As industry knowledge and experience aren’t necessarily required for setting up a successful startup, the ability to learn fast is an invaluable skill for the startup founder(s) or CEO. One thing that many have had to learn quickly is how to assess their talent needs at every step of the startup lifecycle. This includes knowing when to develop an in-house finance function and when to hire a CFO.
While these tasks may seem irrelevant for an established corporate finance function, the approach and learnings that can be gleaned from a startup environment can prove invaluable.
What’s different about a startup CFO?
The startup CFO needs to be forward thinking and fast moving to suit the changing needs of the company as it scales up from a small business to a medium sized or large enterprise. Typically, a startup CFO will have more diverse responsibilities than a corporate CFO, leading fundraising and debt negotiation activities as well as managing anything from operational accounting, technology, investor relations, and talent acquisition. Startup CFOs are, therefore, a very different breed of financier than that of a large, established corporation.
By having greater insight and involvement in the commercial side of the business, finance leaders can play a greater role in the forward-looking decision making. In times of uncertainty this may be tightening the reigns and protecting cash flow. During times of opportunity this may involve identifying strategy and increasing profitability.
How do financial objectives differ in a startup?
One of a startup’s main objectives is to secure investor funding. This means being able to create clear financial models, analysis and reports that support the presentation of the business as a sound investment. Therefore, clarity, efficiency and innovation support a startup’s main objectives.
Startup finance departments are usually comprised of individuals who, much like the startup CFO, are willing to take a broader approach to finance and accounting. This means having some interest and understanding in business operations, enthusiasm for inter-departmental collaboration, and contributing to the decision-making process by providing tech-driven business insights.
Larger businesses that engage in finance business partnering are often successful at bringing a more entrepreneurial approach to their functions, just like the startup. By partnering with different business functions – whether HR, marketing, IT, etc. – finance leaders can impart the data and financial insights needed to make meaningful contributions to the wider business.
How can larger businesses incorporate startup attitudes into their finance departments?
Some of the most notable startup attitudes that set them apart from more established, traditional organizations include:
- Dynamic and relaxed company culture
- Greater collaboration between departments
- Encouraged continuous learning
- Bold experimentation
Startups challenge the status quo by having an adaptable and up-beat culture, often foregoing things like office attire, implementing dynamic and fun workspaces, and ethical values reflected in zero waste incentives, etc. These out-of-the-box strategies are very attractive to high-caliber, young finance and accounting professionals with good tech experience as there’s more opportunity for a cross over between technology and finance and accounting.
If you are looking for bespoke advice on how to create an accounting, finance, and strategic operations team that is tailor-made to suit your needs, our team of dedicated executive recruiters can help you build a full-time or interim team designed for success. By putting people first, we can scope out your requirements and source the right talent, ensuring efficient onboarding and sound results.
