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Discover Your Organization’s Spend Culture
How does your company spend money? Does it have a predictable, democratic system? Is it administrative and sluggish? Or is it agile and open?
In 2021, organizations are struggling to understand their spend culture. There are many reasons for this: the nature of business itself, poor visibility into business spend, and a lack of fiscal clarity as a result of the global pandemic.
Whatever the case, an improved understanding of your spend culture can lead to greater operational efficiency, smarter internal processes, and a stronger bottom line.
Take our spend culture quiz to find out what type of organizational spend culture you have.
FREE QUIZ
What is spend culture?
Just like every person has a unique set of values and beliefs influencing how they choose to spend, manage, and invest their own money, every organization has a distinct spend culture.
Spend culture reflects the shared beliefs and practices that inform how, why, and when money is spent.
What spend culture does your organization have?
Administrative organizations are concerned with procedural correctness. Does this sound like you? Organizations that belong to this group favor coordinated strategic decision making and take more advantage of units of scale.
Administrative
Agile organizations embrace order and stability but also encourage adaptability and innovation. Organizations that are agile attempt to balance strategic decision making and cooperation between stakeholders.
Agile
Unrestricted organizations empower people to take responsibility for decisions. These organizations can react quickly and were made to adapt on the fly.
Unrestricted
Democratic organizations place significant responsibility on the different leaders and their team which makes people feel empowered. Decision making and influence is spread amongst the team in this type of spend culture.
Democratic
The four spend culture types
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The three aspects of spend culture
When it comes to understanding your spend culture, there are three major aspects to consider: people, processes, and systems.
People
Flat structure
An organization with a flat structure allows team members at all levels to participate in spend decisions. This creates trust and generates team purpose and fulfillment.
Team members at all levels take ownership of their spending, which can create huge levels of motivation and engagement. However, it can also result in chaos.
Hierarchical structure
An authoritarian culture keeps this control with clear owners.
A hierarchical organization has a prescriptive culture that tries to treat team members evenly based on rules of conduct. On the positive end, this can be very structured, predictable, and fair. On the contrary, this approach can be seen as cold or distant.
This aspect reflects the unique social environment of an organization.
Processes
Rigid process
A rigid organization has clear rules about managing spend. It has budgets and mechanisms to control overspend through approval workflows.
Flexible process
A flexible organization doesn't necessarily have clear processes and rules for managing spend, and instead leaves such decisions to the judgment of individuals.
This aspect reflects the steps and decisions that an organization expects people to follow when it comes to requesting, allocating, and tracking spending.
Systems
Centralized systems
A strategic organization 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.
Decentralized systems
In an organization 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.
This aspect reflects how an organization collects information to use for planning and decision making.
