3 strategies to transform leaders into better managers
The emergence of new technologies is bringing major changes to company finance departments.
Some traditional duties and roles may no longer exist in a few years, as artificial intelligence and blockchain are used to complete certain tasks that have been performed by accountants in the past.
As a result, leaders will have to harness and foster new skills for both themselves and their employees.
“When it comes to artificial intelligence and machine learning, I don’t think people realise just how big it could be,” said Szilard Brenner, FCMA, CGMA, the CFO at Valiram Group, a conglomerate of luxury and lifestyle brands based in Malaysia.
He envisions the finance function evolving in two ways. First, accounts payable, balance sheets, and producing reports will be done faster and more efficiently and will become an invisible function. Second, predictive analytics and cognitive planning will move finance away from providing data and more towards providing outlooks, which will be part of helping with future planning.
“It will require new skills,” Brenner said. “We often talk of IQ, intelligence quotient, but I talk about curiosity quotient. This is a skill that is absolutely needed. They [finance employees] are not curiosity savvy. We will need to compare and challenge and assess data rather than just report it.”
Saleem Sufi, who has more than 30 years’ experience as a CFO and founded MECA CFO Academy to coach and train finance leaders, said the most important skill finance leaders can learn is how to interact with people.
“Number crunching is dead,” Sufi said. “Machines have taken over most of that role, and very soon artificial intelligence will take up to 50% of finance jobs. Finance leaders need to become business partners and understand strategy and businesspeople.”
However, he said, some finance leaders currently don’t have the soft skills needed, such as emotional intelligence, and communication and relationships skills.
“They are too black and white. Our systems don’t take into account things such as intangible assets. Look at the way we see people. They are the most important assets in many companies, but we think of them as an expense, not an asset,” said Sufi.
So what strategies can finance leaders implement to become better managers in this time of change?
Connect with yourself
As relationships become more crucial, the first step will be for finance leaders to understand themselves.
“It always starts by being introspective,” said Jarik Conrad, senior director for human capital management innovation at Ultimate Software, a US technology company. Conrad addressed how technology is transforming work at the AICPA’s 2018 CFO Conference in New York.
“Understanding how I am doing at this stuff. How well do I understand my own emotions and the impact that I have on other people? How do I manage my behaviour, particularly in stressful situations? How do I read other people and know how to adjust to them? Do I know them well enough?” he said.
Conrad suggested leaders can no longer think of people within the finance function in terms of a transactional relationship, where they work in exchange for pay.
“They are not commodities. It’s about this transformational journey that we can all go on,” he said.
Connect with employees
Being able to understand employees is going to be crucial for finance leaders, who will need to foster new skills amongst those who work for them to help drive an organisation forward, and this means forming better relationships between managers and employees.
“You think about finance people, you know you think about numbers. You think about the analytical abilities. You don’t necessarily think people skills,” said Conrad.
“There is this disconnect between employees and their managers, and even if the managers mean well, they often at times just can’t connect, because the manager says, ‘I just wish they would tell me what they are thinking or somebody can tell me what they are thinking,’ ” said Conrad.
Thankfully, he said, there is now help in the form of sentiment analysis, a type of machine learning that can analyse responses in surveys and questionnaires to gain emotional information about respondents.
He explained how this new tool works: “In my world in human resources, we used to do a survey and then we would take weeks or months to analyse the results of the survey, and then it was up to our interpretations, so we may or may not have gotten it quite right.
“Now we have this technology that can do this instantaneously. I mean, you push the button [and] we can get all the analysis. It’s much more detailed. It is much more accurate.
“For the first time we can pull out themes, and we can understand certain emotions. And we can use this data to look at group-level analysis, team-level analysis, or even individual analysis,” he said.
Connect with other departments
Finance leaders will also need to take a more active role in an organisation, if they are to help a business grow.
“They have to become business partners,” Sufi said. “They need to learn business strategy and communication skills.”
Brenner added, “We have to move away from telling management about historical performance; they are already going to know about this.
“We have to think about how to present predictive information and look to things such as infographics. This will be a big challenge for people in finance, who often struggle to explain Excel spreadsheets to people — never mind analyse and present findings,” he said.
This means that finance leaders need to forge strong relationships with the other entities of an organisation to understand how finance can help grow a company.
“We need people to understand a company is not just about different entities. We need to move away from looking at ledgers and consider what does this data mean in the context of a company that sells watches or clothes or whatever it is, and what can we do to help provide growth to the company,” said Brenner.
— Richard N. Williams is a freelance writer based in the UK. To comment on this article or to suggest an idea for another article, contact Sabine Vollmer, an FM magazine senior editor, at Sabine.Vollmer@aicpa-cima.com.