Just like every person has unique set of values and beliefs influencing how they choose to spend, manage, and invest their own money, each business also has a distinct Spend Culture that impacts its operations
Spend culture is a segment of a business’s broader organizational culture that encompasses the values and behaviors of the people working within it. An organization’s Spend Culture reflects the shared beliefs and practices that informs how, why and when money should be spent.
Culture is fluid. It evolves over time, with each additional new hire bringing their own experiences and ideas into the mix. Whether planned or random, all companies have a spend culture. Understanding your company’s spend culture will allow you to make conscious efforts to influence and guide it, gaining greater control over how the company vision is executed on the ground floor.
Our goal is to help organizations better understand their spend culture.
This section will briefly explain the 3 major spend culture aspects that combine to make up an organization’s spend culture: People, Processes, Systems. These aspects do not represent a measurement of good or bad spend culture. Instead every organization will fall somewhere along a spectrum of two category traits. Whether or not these traits are aligned with your company’s strategy is up to you to decide!
The structure layer shows how companies organize their teams. The two aspects of an organization's structure are flat and hierarchical.
This aspect reflects the unique social environment of an organization.
A company with a flat structure allows employees at all levels to participate in spend decisions. A company with a flat structure is more trusting in it's people and places high value in employee "purpose", nurturing, and fulfillment. It allows employees at all levels the freedom to take ownership, to experiment, and learn. On the positive end this can create huge levels of motivation and engagement on the negative end a flat structure can feel like anarchy.
An authoritarian culture keeps this control with clear owners.
A hierarchical structured company has a prescriptive culture that tries to treat it's employees evenly based on rules of conduct. On the positive end, this can be very structured, predictable and fair, on the negative end, this can be "cold" or distant.
This aspect reflects the steps and decisions that an organization expects people to follow when it comes to requesting, allocating or tracking spending.
A rigid company has clear rules about managing spend. It has budgets and mechanisms to control overspend through approval workflows.
A Flexible company doesn't necessarily have clear processes and rules for managing spend, and instead leaves such decisions to the judgment of individuals.
This aspect reflects how an organization collects information to use for planning and decision-making.
A strategic company has aligned systems that help enforce process workflows and has clear rules about managing spend. It has budgets and mechanisms to control overspend through approval workflows.
In a company with decentralized systems, each department uses their own systems to track budgets, expenses, or spend. Data sits in different systems or with the individuals themselves.
There might be a bunch of stand-alone software subscriptions for every department.