Eric R. Alexander, CPA, president of advisory service company Six Arrows Consulting, discusses the lessons he’s learned throughout his career in finance and what being a finance leader means for him, and other insights from his upcoming book, Stewardship Leadership for Stinkin’ Accountants: Serving as the CFO.
He shares key strategies for developing as a stewardship leader, including how he holds himself accountable, how he views his role as a trusted adviser for organisations, and the steps he has taken to improve in the relational and people aspects of the finance function.
“I’ve been most effective in my work when I’ve functioned as a steward, meaning I understood things had been entrusted to me to be responsible for,” he said. “I was accountable to people, and fundamentally, it was not all about me.”
What you’ll learn from this episode:
- Why Alexander says the CFO role is not about you as a finance leader.
- Key elements of stewardship leadership.
- How to hold yourself accountable as a finance professional.
- Why getting into the finer details can complicate decision-making.
- What it means to own your results.
- Tips for enhancing people and soft skills.
Play the episode below or read the edited transcript:
— To comment on this episode or to suggest an idea for another episode, contact Steph Brown at Stephanie.Brown@aicpa-cima.com.
Transcript
Steph Brown: Hi, listeners. Welcome back to another episode of the FM podcast. I’m Steph Brown. Today I’m joined by Eric R. Alexander, CPA, author, speaker, and president of Six Arrows Consulting, a company which brings coaching, mentoring, and advisory services to leadership teams of community banks and other mid-market companies.
Listeners who read our features on FM might be familiar with Eric. He has written some feature articles published on FM over the past two years, including an article called “Accountability: Inescapable, Challenging, and Valuable”, published in September.
Accountability is something we will be touching on in today’s episode, along with other advice on stewardship leadership that Eric will share from his career and his book, Stewardship Leadership for Stinkin’ Accountants: Serving as The CFO.
Welcome, Eric.
Eric Alexander: Steph, I’m so grateful you have me on for a conversation. Looking forward to this.
Brown: You’ve written a book on accounting, and one focus area is stewardship. What, in a few words, inspired you to explore that component of finance leadership?
Alexander: That’s a great question, Steph. It’s really the heartbeat of my book — which comes out end of July — Stewardship Leadership for Stinkin’ Accountants. It’s about the role of the CFO.
And 40 years of finance, 20 years of that in CFO roles, I realised at one point — I’m now no longer working actively in finance. I’m in advisory roles, as you described in my new company. I realised at one point, when I reflected back on my career, the times I’ve been most effective in my work is when I’ve functioned as a steward, meaning I understood things had been entrusted to me to be responsible for. I was accountable to people, and fundamentally, it was not all about me.
I’m a fiduciary. I have these things — significant, consequential things — to take care of for the benefit of others. And when I approach my work that way, it ennobles my work, how I think about my work, and it makes me contribute in a way that’s much more beneficial and a stronger contribution for the organisation and for the people all around me. And I’m not saying I’ve always done it that way well, but when I reflect back, stewardship is right in the middle of what we do as finance people.
Brown: That’s interesting because one quote from the book that I’d like to talk about — how you introduce readers to the book — is talking about that, you know, this book is about your role, but it’s not really about you. How do you think about and understand your role from that perspective, by taking yourself out of it?
Alexander: In a sense, that’s true for every leader. I’m focusing in the book on CFOs and finance leaders, but it’s general principles of leadership.
Think about what a CFO is doing all the time. There’s lots of administrative, logistical things going on. But in the core of what the CFO is responsible for in his or her team, there’s making sure decision-makers have information. It’s being involved in strategy. It’s protecting a variety of things about the organisation.
I get a benefit out of the role. I get a lot of satisfaction, sense of accomplishment, helping people grow, watching people grow, the joy of relationships. But I’m doing all those things for somebody else. Yes, I’m part of the management team, but I’m delivering information and strategic insights for the sake of the whole company, the management team, interacting with the board to make sure they have what they need to make decisions.
And then as I look at the financials — a big chunk of my career was in banking. It’s easiest to see in banking, maybe compared to some other businesses. Everything on the balance sheet, I look at it, and there’s a person on the other side of that. Those loans we hold, that’s where we’ve extended credit to people for important things in their lives or their businesses. Those deposits on our books, that’s not our money. The whole bank is stewarding that. As a CFO, I’m helping us steward that for other people.
And sometimes it can feel like, well, if it’s not about me, then why bother? But there’s something powerful about giving my professional talents and my energy and my leadership focus to something that includes me but is bigger than me. And that’s a really exciting reason to get up and go to work on a Monday morning.
Brown: I think that’s a great summary, I suppose, of the philosophy of what leadership is. But in the book, you also set out five essential elements of stewardship leadership. What are those, and briefly, why are they important?
Alexander: So, the five elements, I alluded to them indirectly along the way as I was talking about how I view stewardship. It’s me being responsible for what’s been entrusted to me. Me being accountable for the people that have entrusted things to me. So, I’ve got my bundle of responsibilities. I have the various people I’m accountable to.
There’s trust that’s embedded in both of those. So, trust is an inescapable part of it. I have been entrusted with things by people who are entrusting. So, the sense of which I have to be above reproach. I have to be highly competent. I have to make sure my team is competent. We have to deal in integrity.
But then, fundamentally, the central thing of it is it’s not about me. It’s a mindset of service for others.
Brown: I’d like to expand on accountability. We’ve probably at some point in our lives all made unnoticed mistakes. But as a finance professional, hiding errors can erode trust, which, as you’ve pointed out, is essential for being a stewardship leader.
So, what steps can professionals take to get better at owning their mistakes?
Alexander: OK, that’s a fascinating question. If I could, I’d like to back up for a minute and talk briefly about how I view accountability to give a context for it.
Accountability happens when there are expectations that have been communicated. There’s a monitoring of performance, and then we take some kind of appropriate action on the gap. Bosses do that with their subordinates: “Here’s what I need you to do.” “Did you get it done?” If you did, great. Here’s the pat on the back, the appreciation. If you didn’t, how do we adjust?
We also can do the accountability upwards of, I need to know what you expect of me so I can perform. Here’s how I’m doing relative to that performance. “Boss, I’m running behind.” Or maybe the branch president at the bank is saying, “Our deposits aren’t up to the level we planned for in the budget and we’re working on it.” There’s a sense of what’s expected, and how am I doing? None of us as professionals, as individuals, like to fall short of appropriate expectations.
So, I think a couple of things are important. I need to be monitoring my own performance. I need clarity about what the expectations are for me. And when there’s a problem, I need to bring it to the attention of my boss and not wait for my boss to discover it. I’ve had this happen several times where I’ve messed up something or somebody on my team has messed up something and I’m accountable for my team. I’ve gone to the boss and said, “CEO, I have some bad news. We did not intend this for sure, but here’s what happened and here are the consequences and here’s what we’re doing about it.”
I was fortunate that I had a CEO who regularly would say, “Eric, I know you didn’t do that on purpose. There was no malintent. Don’t do it again. Let’s make sure we don’t do this again.” So, part of it is having the humility and the courage to self-report. And I had a colleague who would say, “If you let me know when something’s gone wrong, I will be your advocate. If we have to find it and then deal with the mess after it got worse, I will not be your advocate. It will feel like I’m your adversary.” I don’t remember exactly how he said it, but something along those lines.
So, part of it’s the humility and the courage, and then also realising we’re humans. We will do that.
Brown: Eric, the title of your book is quite provocative. So, I have to ask, what is a stinkin’ accountant?
Alexander: What is a stinkin’ accountant?
You mentioned that I’ve written some for FM magazine, and the editor that I’ve been working with on those articles, he said, Eric — I don’t remember exactly how he said it — this title is challenging for us. So, let me give you some context on it.
First of all, the book is not technical. It’s about leadership, stewardship leadership, in a technical environment.
I had a CEO I worked for. This is the same one who would say, “Eric, I know there was [no] malintent. Thank you for telling me and don’t do it again.” He would call me the stinkin’ accountant. Now, it’s a disparaging term, but it’s not a nasty, disparaging term. It’s kind of a, you know, I’m poking fun at you. I’m pretending like I don’t think a lot of you. I could never get him to admit that it was a term of endearment. It may or may not have been. But I use it in the title purposely to be provocative and not at all to diminish the role of a CFO.
Our role is significant. We are entrusted with vital, consequential, important things, and we need to take our role very seriously. And we do as professionals. But I don’t have to take myself too seriously. I can understand not everybody will understand me. Not everybody will appreciate what the CFO is doing or the whole finance function, but we have a vital role. Let’s deliver, even if they call us the “green eyeshade”, “CF-No”, the “bean counters” — there’s a variety of other terms out there. We can still steward really well but don’t have to take ourselves too seriously.
And yes, for marketing purposes, it creates a little bit of, “Hey, what’s this about?”
Brown: You reference some of the sort of stereotypes that maybe are kind of subsiding but are still how some people frame the role of CFOs.
In your experience, are there any consistent misunderstandings about what the CFO does, the CFO’s role, that actually hinder effective collaboration with other business functions?
Alexander: Yes, there are. And sometimes we will play into those by being the “CF-No”, the person who’s always saying no. We have a challenging responsibility where sometimes we are the ones who have to say to the rest of the executive team, “No, this won’t work and here’s why.” Or, “Here’s a serious impediment we cannot ignore.” That’s part of our stewardship responsibility.
But when we wear that as a badge of honour where I’m always going to be the one that says no. Where we don’t understand the broader value contribution; the broader value creation that’s going on throughout the organisation, we hinder strategy. We can dampen and weaken culture if we embrace this: I’m going to be hard-nosed and not pay attention to business issues beyond the numbers.
I need to know my numbers cold. But if I hide inside those, will not collaborate, or if I shut down conversations or progress based just on financials — my perspective of financials — I’m not being a good collaborative, strategic steward leader. We generally know our numbers really well. We’ll know them to more decimal places than a lot of the other people around us. We know the GAAP better. We know the tax rules. We have to. Our technical competence and the competence of our team has to be high.
Sometimes when we’re reporting to management, or we’re reporting to the board. I’ve seen this happen where we’re so proud of what we know about the numbers, we will go to a level of detail that’s not helpful in terms of what’s significant at that moment in that conversation. Or I’ve seen this happen. You’ll see a financial presentation where a billion dollar balance sheet is presented to the nearest penny. Now, US dollars, OK? A big balance sheet presented down to two decimal places. Once you get about 1 billion, 368 million, any of those other numbers off there to the right are not material often for the discussions.
I pride myself in the accuracy. My balance sheet balances to the penny. Great. It needs to. For the conversations, though, if I get too focused on precision at an unnecessary level, I actually can be making it hard for the decision-makers to understand the data without having to work harder.
Brown: That’s a great note about getting too into the technical aspects of our role and not communicating in ways other parts of the business can understand what that means.
One quote kind of related to this that I’d like to touch on from the book is, “Outcomes are the only things that ultimately matter. Decisions are really only the starting point.” And this point brings me to a technical question around business relationships. Because I guess while financial data can help guide decision-making by predicting a range of possible outcomes, people are famously unpredictable. So, how can CFOs help organisations assess the cost of stakeholder trade-offs against the potential value of decisions?
Alexander: OK, several concepts all boiled together there.
Let me talk first about that last part, the trade-offs. And it’s interesting you bring that up. I was in a conversation with somebody just yesterday for my own podcast, talking about the various constituencies that we as leaders have to balance. And a big part of that is maintaining awareness of everybody.
The word stakeholder is used for a good reason. Everybody who has a stake in the decision, or at least in the outcome, needs to be considered by the people making the decisions. There may be some weighting we do in our head of what’s most important. Is it the shareholders? Is it the employees? Is it the customers? Is it regulatory? Is it our communities? At minimum, we need to maintain an awareness of what the effects are in all of those.
And you’re right — going to another part of how you set this question up — people are highly unpredictable. Now, people as a group, we tend to see similar behaviours over time. But any individual interaction, there’s no telling how it’ll go. We love numbers as finance people. One of the harder things we deal with is people, and all the complexities of relationships and all the needs and the emotions and the motivations.
It makes our leadership hard. It makes our predicting of what could happen in a business outcome hard. We may go into an M&A negotiation and expect a certain path, and then somebody loses their temper, and a deal falls apart for a nonbusiness reason. All kinds of strange things could happen.
So, part of what we need to do as finance leaders is know our craft, know our numbers, but broaden our view to try to take in these other stakeholders: people, people issues that are harder to quantify but super significant in a lot of decisions.
And where you started about outcomes, that really goes back to accountability. I had a colleague, we’d worked together and he heard me talking to a finance team about accountability. And I went through my definition of clarify expectations, monitor performance, and take appropriate action on the gaps. He said, “That’s great. Here’s how I think about it: Own the results. Don’t just tell me what you did. You are accountable for your outcomes. Yes, you’re accountable for your efforts, but we’re doing the efforts towards outcomes. So don’t just try to impress me with how busy you’ve been. Let me know what you accomplished. That’s what you own.”
Brown: One thing that you highlight in the book is that finance professionals, where they do struggle can be within what we refer to as soft skills. What would be your advice for finance professionals where that’s sort of the one part of their role that maybe is letting them down and they’re really struggling to bridge those gaps?
Alexander: Realise you’re not alone.
We talked earlier about some of the stereotypes. One of the reasons stereotypes exist is because we tend to have some shared behaviours. And when we’re very strong analytically, it’s often paired up with we’re not as strong relationally. Not always. But I think at least an awareness and an honest assessment of I’m not as strong here as some of my peers.
I’m an introvert who pretends like he’s an extrovert. I will never be a natural extrovert. I’ve worked for them. I’ve been around them. We’re just different forms of people. [I] understand that that’s who I am. I will not necessarily ever be as personable as some other people, but there are behaviours I can learn. Maybe partner up with somebody else who I see doing it well. “How’d you do that?” Tell me how you prepared for that interaction. Tell me how you went back and helped deal with that conflict. Find people that you can talk to.
There are lots of good resources out there, too. We can learn behaviours, not to pretend, but to be effective in those softer skills. And you’re right, that is some of what I talk about in the book. And those are some of our bigger challenges. Those human-related aspects where we get out of our numerical, quantitative comfort zone.
We won’t change our personalities. We shouldn’t have to. But we can learn some behaviours and develop some habits that will help us be more effective.
Brown: I think that’s a great note. That self-reflection of just knowing that you’re not an ineffective leader, you just lead differently to other people. And that could be, I suppose, part of the value that you add to the organisation as well.
I’ve really enjoyed our conversation about all these elements of stewardship leadership. Is there anything that we haven’t maybe highlighted in this conversation that you think is really important to mention?
Alexander: Oh, there’s a whole lot to say. I’ll just say this: I’m a finance person. I have an appreciation and an affection for people in finance and people in other roles like finance who serve in the supporting functions where we often aren’t recognised for our contribution.
A stewardship mindset can help us do that in ways that are significant, even if nobody ever knows how well we’re doing, how much value we’re adding. Let’s go add that value. Not everybody will recognise it, but we will still have a sense of accomplishment of having done something significant for the sake of the organisation. We’re doing important stuff. Let’s do it really well.
So grateful to get to have the conversation.
Brown: It’s been a pleasure to have you on, Eric. Thanks for coming on the podcast.
Alexander: Thank you. It’s been a pleasure.
