For any senior professional in finance, being good at what you do is no longer enough. No matter how technical your speciality, if you lead a function or are a manager then modern business demands that you be a leader as well as using your technical skills in ways relevant to the organisation.
According to one head-hunter,"The demand for good finance leaders is stronger than ever and they're being asked to transcend or widen their band width and their normal finance functions, become stronger and provide more counsel to the boards, rather than being the historical green eye-shade accumulators of data."
An ambiguous leadership
Admittedly, for leaders within rather than at the very top of an organisation, there are constraints. Any leadership provided must always be within the context of overall leadership from the chief executive officer (CEO) or collegiate board decision-making.
The finance leader also faces an eternal dilemma - to what extent should the drive for practical solutions be balanced against the need for technical and numerical accuracy? Knowing when accuracy is needed is critical, yet your contribution is at its most useful when supporting profitable business initiatives. Using analytical skills in such a way as to both enable and restrain can prove a considerable challenge.
Born or made?
Some people even question whether a financially trained individual can ever be a leader. They contend that financial analysis and understanding require a totally different mindset from that required by leadership (by implication an intuitive process).
It is true that the stereotypical view of a leader, 'born that way', driven by an urge to realise his vision and unable to work comfortably within externally imposed constraints, doesn't fit comfortably with the stereotype of a finance professional. But is this 'visionary' picture of a successful leader necessarily correct?
A quick review of the past year's corporate failures and crises, usually fuelled by a leadership 'vision' rooted in little more than optimism and expensive advice, shows us that perhaps an alternative leadership model is something to be desired.
What is successful leadership?
Warren Bennis, an American academic, contends that leaders are made rather than born. He tells us that successful leaders are usually ordinary people, and that leadership is 'mastery over present confusion'. This is something with which most finance professionals are only too familiar.
Leadership is influence directed towards attaining goals. Leaders seek to accomplish change through inspiring people to accept the vision as something worth striving after. The leader therefore needs a number of things, including:
- a vision, firmly rooted in the needs of the organisation, aimed towards meeting those needs in the best possible way, and something that others can accept as their own;
- leadership qualities, in particular the ability to inspire, motivate, influence and persuade. These come more naturally to some than others, but everyone is able to acquire and improve skills in these areas;
- a hunger to continually improve themselves, the disciplines under their leadership and the people they lead and inspire; and
- managerial abilities, as visions are of no use to the organisation unless they can be brought into reality. Management involves planning, organising and controlling, and the leader needs at least to be able to manage others with the necessary management skills!
One of the big challenges is to decide how exactly leadership should best be exercised within the context of a particular organisation. No two organisations are the same, neither are two senior finance professionals. This means that, for each combination of organisation and finance professional, the answer will be somewhat different.
Well led, any finance function can sit at the heart of value creation, driving improvements in quality and standards. This is the finance professional's challenge!
Author: Patricia Scott is founder director of Leadership in Finance and works as a coach to financ e directors and other finance professionals. Email pat.scott@leadershipinfinance.co.uk
This article was published by the Finance and Management Faculty (Issue 132, April 2006).
