How to create a proactive finance culture

🛠 THE CFO EFFECT PLAYBOOK (Part I)

Step 1: Recognition that matters

Let’s face it, generic recognition doesn’t drive lasting change.

Simply saying, "Great job being proactive!" loses impact fast.

Instead, tie recognition explicitly to strategic impact:

• Highlight specific triggers identified, clearly linking proactive insights to strategic business outcomes.

• Celebrate not just proactive actions, but the strategic thinking behind them. Reinforce the “why” behind proactive behavior, not just the “what.”

Example: "Monthly Proactive Finance Showcase"

• Clearly articulate the scenario:
  "Our Analyst, Sarah, flagged inventory turnover deterioration before it became critical."

• Highlight the proactive strategic response:
  "Because of Sarah’s early trigger, we swiftly adjusted purchasing, prevented $500k in excess inventory, and significantly boosted Q4 margins."

• Emphasize strategic thinking:
  Celebrate Sarah’s insightful understanding of how inventory impacted overall business performance, not just her detection of an isolated number.

Make your recognition specific, visible, and strategically meaningful.

This is how proactivity becomes aspirational and sustainable.

Step 2: Institutionalize proactivity deeply

Regular meetings help, but true institutionalization means embedding proactivity into your finance team’s daily operations and thought processes.

Move beyond quarterly or monthly rituals and integrate proactive thinking as a daily norm:

• Daily Stand-ups:
  Brief daily huddles asking: "What signals should we watch closely today?" Encourage quick reflections on early signals, fostering continuous vigilance.

• Weekly "What-if" Sessions:
  Hold brief, focused meetings every Friday (not just occasionally) to test new scenarios.

  "If X happens next week, how will we respond?" These become quick, collaborative strategic drills.

• Monthly "Trigger Highlights" (Refined):
  Recap monthly top proactive insights and explicitly showcase the strategic outcomes they've enabled.

  Keep visibility high, reinforcing the importance of continual proactive thinking.

• Quarterly Scenario Deep Dives:
  Review and update scenario maps quarterly instead of annually.

  Reinforce continuous scenario-based strategic thinking as a fundamental practice.

Institutionalizing proactivity is not an event; it should be a continuous conversation.

Step 3: Challenge and Develop Proactive Mindsets (Beyond Just Recognition)

Recognition alone won’t shift deeply rooted reactive habits.

Over the years I learned the necessity of actively developing proactive mindsets within my team through intentional mentoring and skill-building:

• Invest in Strategic Training:
  Equip your team with continuous learning around strategic thinking, scenario modeling, storytelling, and decision frameworks.

  Don’t just celebrate proactive behavior you need to actively nurture proactive skillsets.

• Mentorship & Coaching:
  Pair junior analysts with senior mentors who excel at proactive thinking.

  Facilitate deliberate learning and growth through regular check-ins and feedback sessions.

• Encourage Cross-Functional Exposure:
  Enable finance team members to spend regular time with operations, sales, and marketing teams, deeply understanding the business drivers behind metrics.

  Proactivity grows when teams understand the strategic context beyond their spreadsheets.

Step 4: Set Clear Expectations (Beyond Just Encouragement)

Merely encouraging proactivity without clear expectations rarely sustains it.

Set explicit proactive expectations within your finance team's performance framework:

• Clearly define proactive behavior as a critical performance criterion during evaluations.

• Explicitly outline proactive expectations when hiring and onboarding new team members. Make proactivity central to your finance team’s identity from Day 1.

Initially, I thought recognition alone created a proactive culture. But here’s my thinking:

"If recognition alone worked, every finance team would already be proactive. Real culture change requires reinforcement through processes, expectations, skills, and daily habits."

Proactivity isn't an initiative. it should become an identity.

Why This Deeper Cultural Approach Matters:

Embedding true proactivity fundamentally transforms finance’s role in your company.

Your team becomes consistently strategic, alert, and decisive.

• Consistent strategic vigilance: Proactivity becomes automatic, ensuring your radar never misses critical signals.

• Continuous strategic readiness: Regular scenario practice and mentoring ensure calm, decisive responses under pressure.

• Enhanced strategic impact: Executives quickly realize finance isn’t just another cost-center.

  It’s their compass.

  It’s their best friend.

  It's their indispensable strategic partner.

The Bottom Line (Your Action Checklist for True Proactive Culture):

• Make recognition specific and strategic: Celebrate clear links between proactive actions and strategic outcomes.

• Institutionalize proactivity deeply: Integrate proactive thinking into daily, weekly, monthly, and quarterly routines.

• Develop proactive skills deliberately: Invest actively in strategic training, mentoring, and cross-functional exposure.

• Set explicit expectations: Clearly embed proactive behaviors into performance frameworks and onboarding processes.

When you shift from occasional recognition to a deeply embedded proactive culture, finance stops reacting passively to events and starts shaping outcomes actively, confidently, and decisively.

My friend this is precisely how you transform finance from merely reporting yesterday’s story into confidently and proactively authoring tomorrow’s success.

Next Week’s Episode:

🔜 Mastering the A in FP&A: The art of analyzing financial statements

Most people read financial statements.
FP&A leaders analyze them.

This July, we're going deep into the “A” in FP&A—Analysis.
Not just what it is, but how to turn it into strategic advantage.

Over five episodes, I’ll walk you through the art and science of financial analysis:

📊 Week 1 – Why financial analysis matters, and how to use it to create value and shape strategy
📈 Week 2 – Gross margin deep dive: pricing, COGS, and unit economics
📉 Week 3 – Profitability and variance analysis: how to explain the “why” behind performance
📦 Week 4 – Working capital and balance sheet analysis: the hidden levers of cash flow
🏛 Week 5 – Capital structure, leverage, and ROE: the link between risk and return

Next Sunday, we kick off with the foundation:
✅ What financial analysis really is (and isn’t)
✅ Why most teams underutilize it
✅ How to shift from reporting to driving strategic decisions

Because in FP&A, analysis isn’t just a skill. It’s your edge.
And if you want to lead from finance, it’s time to sharpen it.

Talk soon,