Zaf Mahomed: Diversity will strengthen the finance team and the organisation
The Cell C CFO recently participated in a Finance Indaba panel on real transformation in the workplace.
A few weeks ago, I had the pleasure of speaking at the Finance Indaba held at the Sandton Convention Centre, where I was part of a panel looking at real transformation in the workplace and where we are as a country with regards to inclusive organisations. It was an interesting and thought-provoking conversation and I wanted to share some of the insights I believe could benefit organisations to put true diversity at the heart of what they do, specifically from a financial perspective.
Transformation is not a journey, it’s a mindset
In the past decade, the trend for the annual report was to include a new section on sustainability. At the time, many CFOs and finance professionals felt that the sustainability column was a checkbox that needed to be ticked, or worse, an unnecessary cost to the company.
But over time, organisational leaders around the world started to see that, whether a business embraced real sustainability or treated it as an afterthought, it impacted customer spend. The mindset of business leaders started to change.
In 2010, Unilever launched its blueprint for sustainable business, which it called the Unilever Sustainable Living Plan. By 2014, 50 percent of Unilever’s growth came from sustainable living brands. These grew at twice the rate of the rest of the business.
With case studies like Unilever’s and many others, CFOs around the world started to see sustainability as a growth and revenue driver as they embedded these into their organisational DNA.
True inclusion and diversity attracts consumer spending
In much the same way that organisational sustainability affected the spending choices of consumers, we are seeing a similar buying pattern following true inclusion and diversity. Deloitte’s 2019 HR Trends Report shows clearly that consumers are choosing to spend their money with organisations that have an honest approach to diversity. This is particularly true of the millennial generation, who are keenly researching the companies they want to support.
The same generation is also looking for employment with organisations that are putting transformation at the heart of their organisational structures.
The financial value of workplace transformation and diversity
Aside from affecting the employment decisions of the vibrant youth of our country, diversity actually promotes innovation. Recent research by Gartner shows that the difference in team performance between non-diverse and diverse organisations is 12 percent. Gartner also shows that true diversity results in talent being more likely to stay with an organisation.
Driving a high-performance culture and promoting innovation through diverse ideas in the current economic climate is essential for driving revenues and growth. Add to that the increased customer spend and the financial benefits are clear.
Who should champion transformation?
The Deloitte HR Trends Report for 2019 indicated that 50 percent of CEOs believed they should be driving the transformation agenda. However, I would argue that CFOs are also well placed to champion the cultural and mindset shift towards true transformation.
The role of the CFO has changed dramatically over the years, but certainly EQ-led leadership is one of the key skills the evolving CFO needs to engender. As a business caretaker and cultural catalyst, CFOs not only hold the key to fostering engrained transformation, but can embody those values.
An article by ClarkHouse reports that a fundamental area where companies fail in their transformation and empowerment strategies is partnering remuneration and reward with transformation and empowerment outcomes.
As the overarching financial controller of the business, the CFO can leverage incentives to ensure that transformation forms part of the KPIs of not only individual employees, but the business as a whole. The CFO is in a position to instil transformation values in the governance framework and extend them to the financial reporting of the business, as they drive the sustainability agenda.
The CFO can act as a support or tag team to the CEO in driving the transformation agenda at board level. This is becoming much more important for future growth – particularly in South Africa. The effect of culturally-led diversity within the organisation impacts the communities we serve, which ultimately is everyone’s responsibility.
Transformation for many businesses is a crucial conversation. It is definitely not easy, but the conversation is happening, with or without business leadership. As a CFO, the financial value is clear, but more importantly the value in changing the world we work in is even clearer. Diversity adds value in the form of new ideas, skills and capabilities that will strengthen the finance team and the organisation as a whole. These diverse teams lead to inclusive innovation, which in turn could lead to new revenue streams for the business of the future.