Planful CEO - The Great Resignation is a culture problem, and finance leaders play an integral role

Last time I talked with Planful CEO Grant Halloran, we addressed the realities of continuous planning (Is continuous planning a realistic goal for finance teams?)

Then came Planful Perform 2021, and our take on Planful's Predict news.

This time around, Halloran had a different problem on his mind - a challenge that impacts CFOs just as much as HR leaders: the so-called Great Resignation. Why is Halloran passionate about this topic?

It's super-topical for pretty much every business. Maybe more so, in a concentrated way, for the tech industry.

The Great Resignation - and the bifurcation of knowledge work

This isn't something we asked for. Halloran equates the pandemic to "history's greatest experiment for knowledge workers." He adds:

If you asked CEOs back at the beginning of 2020, 'Hey, let's go and take all our knowledge workers and send them home, and make them work from home for an indefinite period. Let's just see what happens.' I don't think we would have many CEOs want to take that up. So we were forced into it.

What did we learn? First, the good news:

Most companies I talked to have experienced this: knowledge workers can be extremely productive in this modality of working from home. However, it has caused us to think about the bifurcation of work.

Ahh, there's the problem:

Now we're starting to get challenged by this idea that there are certain types of work that are more creative, that are going to require, or ideally are done together, in an office. So we're right at the cusp of companies really starting to think about: what's our new mode?

That's where the Great Resignation hits hard. If you're a CEO, and you get this work/life mix wrong, you're going to lose your talent:

You mentioned a Great Resignation. I think Korn Ferry just calls it "the big quit"... In August, PwC ran a study which I thought was quite comprehensive. 65% of workers polled in that study were actively looking for a new job. On the one hand, that's a terrifying statistic for most businesses. On the other hand, you can see it as an opportunity as well.

You can't just throw money at this problem. Yes, service workers might need (and deserve) a wage increase, but for most knowledge workers, I don't believe salary alone is driving the big quit, or the "big look around," or whatever you want to call it. If your return-to-office policy puts employees back into numbing commutes, before they feel safe at work, I don't like your chances. Halloran responded:

The way I think about it is: we all want to run a great company, right? When it comes to your employees, what does it look like to be working at a great company? I simplify it into two big areas. The first is what I call frameworks, and the second is feelings.

Two very different concepts. How does that work?

Frameworks are older things like our compensation, our HR policies, our facilities and offices... I think the trap companies can fall into is thinking, 'Well, we just, we just have to pay people more; let's accept lower margin, and that's going to help us retain our people, or attract people that are actively looking for a new role.'

But to your point, I don't think a lot of the people that are stimulated to think about leaving are just doing so for compensation reasons... A lot of polls and studies would show that compensation is actually quite low on the list. It's more on the feeling side.

Employees need a personal "why", not just a company "why"

If it's not pay, then what is it? Culture. That brings new implications for workplace leaders:

I think the cultural side of things has become much more important. From my point of view, the emphasis for leadership should be on that side of the house, right? We can look at it from a spreadsheet perspective and say, 'Hey, you know, let's plan out what productivity measures we might get in this different hybrid environment, and we'll test those things.' Again, that's the frameworks thing.

People are going to go ahead and do different experiments. But what they're not asking is, "How are employees feeling?'

So what's a better approach? How should we address this amorphous-but-critical issue of "feelings" - and not get lost in impersonal frameworks? Halloran says you start by helping employees answer their "personal why." That might be different than the company's "why" - but it needs answering. He used the example of Tesla, where an employee's personal why might stem from creating a sustainable world, or "they might just really love fast cars, and they could love the engineering challenge of that."

Now we're at the heart of it: how has Planful, as a company, faced these truths? Halloran shared that story:

That's the first thing we try to focus on at Planful. What I encourage other leaders to do is lean in on asking your employees, 'What's your personal why,' and managers should know their own personal why, and their employees' why, because that gives you the ability to then create an environment and behaviors and whatnot, that tap into their personal motivations.

Do corporate values factor in here, or is that bland happy talk? Halloran says these values are relevant - if employees buy in.

It's something that I think is becoming boring for people, but I actually think is so fundamental to running a great company, is understanding those core values - having your employees actually affect those, to say: 'This is what we want to our values to be, this is what we want other employees to believe, that we have to go to work with.' And then hinging off the values, this is what I call behaviors of greatness.

As in?

What are those, no more than maybe ten key behaviors that have a huge correlation with great outcomes, and a great culture, where people feel like they're getting results, but they feel great doing it, and they feel a camaraderie with each other? Defining those is a critical thing.

"We've been going through a dramatic transformation"

Halloran says Planful put that into practice:

We've documented all this. We've written books; we call it The Planful Way. We have multiple versions of that book. We have one that's broadly for all employees. We have another Planful Way around how we lead, a Planful Way for how we recruit and onboard people. Ultimately, that becomes a set of companion books together, for the overarching Planful Way.

Does that help Planful stay ahead of a "Great Resignation" talent vulnerability? Halloran says yes:

If you, as a manager or a leader, are not really leaning into that feeling side and those key behaviors, you're going to exacerbate the problem. You're going to be a victim of the Great Resignation, versus being a victor through that period.

Even with all that in place, the work-rethink has challenged Planful.

We've been going through a dramatic transformation the last couple of years, with Planful becoming a much higher-growth company. So we were already on that journey.  We feel fortunate that we've done a lot of work around our culture... I believe that culture trumps strategy every day, so we were in a pretty good place. But we don't have a lot of the answers yet.

When the office is in flux, building workplace culture isn't easy. Planful is working through that now:

What we try to do is blend into the experimental mindset, and be very transparent with our employees. For instance, our employees in India, they're coming back to the office early in 2022, if everything stays the way it is right now.

Halloran might believe in office culture-building, but he also knows that Monday-through-Friday commutes don't make sense anymore:

One of the things we've been doing is polling them and asking them, 'What days would you want to work?' We don't want people to have to come back five days a week, right? We don't want them commuting in this crazy five day a week commute; I think those days are over.

So what we've said to them is, 'We're going to try a quarter where we'll experiment with certain days, and then we'll see how you feel about that.' And then we'll move to a different mode, and we'll try that. So we're going to do two or three quarters of experimentation. We're opening offices in Toronto and in London as well.

We don't know which workplace model will pan out. Transparency and experimentation rule the day now:

What I try to encourage my team, and the readers of this article to think about, is having an experimental approach, and being really transparent with your employees.

My take - can FP&A bridge the framework and feelings gap?

I asked Halloran: when you dug into the "personal why" of Planful employees, what did you learn? Their internal survey yielded four keys:

• Team belonging and camaraderie
• Career growth and opportunity
• The chance to make a difference
• Customer impact

No surprise - money doesn't crack the top four. I would think stock options must factor into the personal why of some Planful employees, and I don't fault that. I've always believed we should allow our motivations to be complex, and derive energy from all of them.

I was not surprised to see customer impact in the top four. I've talked with Planful's customers enough to know that the pandemic really pushed them - and, let's face it, legacy planning tools get exposed when you needed to redo your plans frequently (example: How Steinway & Sons changed financial planning to keep pace with the pandemic economy - a Planful use case). Halloran added:

In many respects, the FPA folks and the accounting teams were a kind of first responder. If you're inside the company, when you have the CEO, the CFO, the board, huddling, you know, multiple times a day and starting to ask all these questions, looking for extremely rapid modeling and scenarios and simulations of what's going to happen.

We're talking about not just revenue impacts, but what's going to happen to our receivables? Are people going to pay us on time; what's the liquidity going to look like? One of the proudest things that was very motivating for our team was hearing the actual stories of our customers, and usage spiked 50% in that first month, right across the system, which was incredible.

And, you know, being able to support people working those crazy hours, and doing like ten different simulations a week for the CEO and the board. Many of them said to us that they just could not have possibly done what they had to do, to meet their bosses' needs; they couldn't have done it without our system. So that was amazing.

Now finance leaders have the chance to make those changes stick:

It created stronger relationships, because the business units felt more dependent upon their finance colleagues during that period. In the long run, we have a business mission, which is to elevate the financial IQ of everyone in a company through our systems. This actually helped do that, and fostered that greater collaboration.

It was refreshing to hear an FP&A company so eager to talk about fundamental culture and talent problems - issues that can't be solved on spreadsheets. These insights should prove fruitful as Planful expands its own workforce planning products. The classic/persistent HR - Finance divide is a major obstacle to the better opportunities ahead - and that divide refers to people, processes, and data.

It will be interesting to see how Planful's return-to-office plans fare. I will not be surprised if those plans are postponed or disrupted - that's just the nature of pandemic life. We're managing it a lot better, but curveballs and setbacks are part of what lies ahead. It's how we overcome those that will define us.

The timing may change, but offices will certainly factor into workplace life. The question is how? And how do we cultivate the type of culture Halloran advocates while we are still in flux? Frameworks and feelings are an interesting way to define the solution. Perhaps the ideal role for planning and analytics is to help bridge the two.

Updated, 8am UK time, December 18, with a few small tweaks for reading clarity.