Knowing the numbers is no longer enough. Instead, knowing the business and envisioning its path forward based on data are critical skills for finance executives, according to a new CGMA report on leadership.
As business grows more global and complex, finance executives must be able to communicate strategy based on numbers instead of simply producing a spreadsheet. That’s why CGMAs are equipped to take on a broader role in their company’s decision-making, according The Fast-Track to Leadership – The Challenges, Opportunities and Action Plan.
That communication skill, says one CGMA quoted in the report, “puts you in a position to say: ‘The management, financial and audit reporting function is all there and it’s working, now this is where we can add value,’ ” says Hamant Lad, CGMA, the CFO and chief operations officer of Pelham Capital Management LLP in London.
His sentiments are echoed by data in the report as well as the comments of other CGMAs, including Paul Stahlin, a former chairman of the American Institute of CPAs. “It’s taking the numbers and being able to turn those into a story of what has happened but also what will or may happen,” Stahlin says. “If you don’t have that ability then you really are not at the level you should be and will not be as successful as you should be.”
The report, released Monday, lays out a 10-step plan for career progression. Before taking those steps, it says, prospective leaders must have four qualities: integrity, objectivity, passion and curiosity.
Global, analytical thinking is critical, especially to management accountants, who will become more involved in corporate decisions.
“Management accountants … need to understand the bigger picture and work with and across the business, as well as with external stakeholders, to be able to connect the dots,” the report says.
Working across cultures
The ability to work across cultures is increasingly important as companies go more global but also more virtual. Russell O’Brien, CGMA, a finance executive with Royal Dutch Shell, says the way leaders gain international experience has evolved over the years.
“At Shell, historically we had the ability to develop leaders through international placements in many different parts of the world, and using that experience to the benefit of the whole organisation,” O’Brien says in the report. “But the world has changed, and we now have to build and lead global teams virtually to match the new business structures.”
The report offers ten steps it calls the CGMA Action Plan. Here are a few highlights:
Plan your career, then be flexible and adapt: Don’t simply throw out the goal of being a CFO in five years. Think about your career—where you are and where you want to be. Consider the skills you need to reach your goals and devise a plan to acquire those skills.
Develop your communication capability—written and verbal, across platforms: Are you timid in meetings? Do you shy away from chatter at the coffee dispenser? Then you might need to email less and talk more. Identify your communication weaknesses and work on them. Also, learn to tailor messages to different segments of your organisation.
Invest in yourself—lifelong learning is critical: Taking a class just to get the credit does little to improve your performance. Make your learning relevant to where you want to go.
Move outside your comfort zone – take the unconventional route: “If everything is easy, then you’re probably not pushing yourself enough,” Chris Newman, finance director for global product development at Experian, advises in the report. “If you do what you have always done, you are likely to get what you’ve always got. So try something different.”
Other key points in the report:
Citing an IBM report from May, the report notes that collaboration and communication are the two most critical personal attributes that CEOs seek for future staff.
An Economist Intelligence Unit report from May showed that 55% of global respondents identified “strategic vision” as the hardest skill to find for executive roles in their organisation.
An Accenture report from April noted a disconnect between desired skills and on-staff talent, saying 40% of European decision-makers thought that high-end analytical skills were critical for their organisation’s future but that only 15% of those organisations had the skills on hand.
The same Accenture report said 52% of European decision-makers considered international skills as critical but only 18% thought had that skill set on hand.
Related CGMA resources:
Seven steps to “transpersonal” leadership: As the demands of leadership change, so have the qualities needed for leaders. This report outlines a path from business-as-usual leadership to transpersonal leadership, in which someone considers the needs of all stakeholders.
How to develop a strong and interdependent team: One of the roles of a financial leader is to be the developer of the team’s skills and talents. To be successful, financial leaders must enhance their skills in developing a strong and interdependent team.
—Neil Amato (firstname.lastname@example.org) is a CGMA Magazine senior editor.