As finance and accounting teams experience talent shortages, due in part to the retirement of Baby Boomers, limited applicant pools, and a rising demand for new technology skills, many are finding it more difficult than ever to spot and nurture the next crop of leaders.
"There's a war for talent on a global basis," said Gareth El Mettouri, associate director at Robert Half UAE, a human resource consulting organisation.
In order to compete, an increasing number of companies are setting up "talent factories", which Doug Ready, a senior lecturer at the MIT Sloan School of Management, defines as pipelines of high-potential employees that "marry functionality, or rigorous talent processes that support strategic and cultural objectives, and vitality, meaning emotional commitment from management that is reflected in daily actions".
These pipelines can help ensure a steady supply of talented individuals are ready to fill leadership roles, but even when the talent you are looking for is already in-house, you still have to know how to spot them. That can be challenging because the most desirable qualities of future leaders are constantly shifting and becoming increasingly elusive.
As Claudio Fernández-Aráoz wrote in a 2014 Harvard Business Review article, "21st-Century Talent Spotting", organisations and their leaders must transition to a new era in the hunt for stars, "one in which our evaluations of one another are based not on brawn, brains, experience, or competencies, but on potential", which he defined as the ability to adapt to and grow into increasingly complex roles and environments. It's not all about hard skills anymore — those skills must be paired with experience, soft skills, and fresh perspectives.
Finding the finance leaders of the future early has never been more important. A wise finance leader will build an effective team around them and constantly be spotting potential talent. Often, that talent is already working for you. Here are four things to look out for to identify the rising stars on your finance team:
Catalytic learning capabilities
Rising stars are always learning, and because business models are changing all the time and new competition is always lurking around the corner, up-and-coming leaders must be comfortable operating in a continuous learning mode.
When assessing team members for potential leadership possibilities, look for employees who voluntarily take on additional courses, attend conferences, and acquire valuable certificates in key areas.
"You need folks who have almost an intrinsic sense of curiosity, or what I like to call catalytic learning capability," Ready said. "In other words, they're able to absorb a lot, learn from it, and catalyse that learning into productive value for customers." These are employees who are curious enough to look around for trends, are always embracing change, and are perennial learners.
A high-potential professional is willing to try new things and is resourceful when placed in unfamiliar situations. The great ones are those who, even when they run into a roadblock, consider that roadblock temporary and pivot to the future, according to Ready. Look for team members who display creative problem-solving and are relentless in their pursuit of trying to improve things for both the customer and the company.
"The high potentials are the ones who want to see that direct linkage between their contributions and productive outcomes," Ready said. "They want clarity about what the big challenges facing their company are and how they can help."
Rising stars are also extremely interested in feedback — praise as well as developmental feedback that can help them get better. When looking for rising stars, watch for resilient individuals who seek out feedback and can take criticism and use it to improve their performance.
Data and tech skills
Advances in technology are changing the nature of opportunities available in finance, according to James Brent, a UK-based senior business director at Hays, a global recruiting company. You should be looking for individuals who embrace this change and adapt to new innovations in the market.
"There is increased appetite for accountants and finance professionals who can also work as business analysts and data scientists and use their technology skills to their advantage to further their career," he said.
Individuals with a background in analysis or data science, or those who are eager to learn those fields, are likely candidates for leadership.
"A leader needs to have, at a minimum, a deep appreciation for the power of analytics in order to drive a strategy that's based on analytics," Ready said. "It means understanding the power of analytics, big data, and the practical applications of artificial intelligence and machine learning. You can't just relegate that to young people down at the bottom of the hierarchy."
It is vital to ensure that your company is developing a talent pipeline that reflects your customer base, and if your current leadership only represents one subset of the population, you should be looking for talent with new and different perspectives that can help keep your company in touch with the modern era and maintain a fresh wellspring of ideas.
Diverse talent with experience in a variety of work environments across both global cultures and company functions are likely candidates for leadership.
There is a lot of consolidation happening, El Mettouri said, and candidates who have experience working in a variety of environments are better prepared to find solutions that work well in specific contexts.
You should be looking for talented individuals who have already taken, or are willing to take, work assignments in foreign countries, as well as individuals who have a lifetime of experience as an underrepresented minority in the field.
"If your business is globalising and your customers are increasingly diverse, you had better have people in your organisation that are increasingly diverse so they at least have a better chance of understanding customer preferences," Ready said.
Hannah Pitstick is a freelance writer based in the US. To comment on this article or to suggest an idea for another article, contact Drew Adamek, an FM magazine senior editor, at Andrew.Adamek@aicpa-cima.com.