NOT SO long ago, life was relatively simple for a company's finance professionals. They were judged on their technical expertise, independence and integrity. Today, however, having exceptional accounting-based skills is no longer enough. While such expertise is still the foundation of the finance role, "soft" skills are becoming increasingly important for finance professionals to be effective.
There are two reasons for this. First, the global nature of business has led organisations to seek staff who have the necessary skills to deal with colleagues and customers who are remote both geographically and culturally. It is no longer sufficient to simply present figures and comments in a report. Finance experts need to be able to explain their meaning and relevance to an audience that could be based in Birmingham or Beijing.
Second, in the current climate, companies are unable to justify the cost of having a department that "just deals with finance". They demand more from their finance staff and are looking for individuals skilled in a number of disciplines who can take on complex, high-profile business partner roles. Where they cannot find the right staff within finance, they are willing to reallocate responsibilities to other departments, recruit externally or even outsource.
This means that if finance professionals are to succeed, they need to acquire the requisite soft skills to sit alongside their technical abilities. Some find this relatively easy but for many it can be a difficult challenge.
What do we mean by soft skills and why have they been neglected in the past?
Soft skills are those which enable people to interact effectively with clients and colleagues at all levels. These include communication skills, the ability to negotiate effectively, build teams and relationships, and being able to think creatively.
They are important because people with advanced soft skills are able to judge their own and other people's behaviours, feelings and needs, and are sufficiently adaptable to adjust their approach accordingly. They are more effective because they can harness their IQ with EQ – emotional intelligence.
Historically, finance tended to operate within a silo and was not encouraged to interact with the wider business. Consequently, finance functions employed people who were more comfortable with data, systems and processes, while soft skills were given less focus.
Why are soft skills important now?
Of course, it is worth pointing out that it is important to understand that soft skills should complement hard skills, not replace them. Technical expertise will always remain an essential part of the finance professional's armoury – there is little benefit in being an excellent communicator if you have nothing insightful to communicate.
Hard skills, however, require soft skills to make them truly effective. For example, unless figures in reports can be expounded in a way that others can relate to, their use is limited. Hard skills deliver reliable information as an input to decision making; soft skills support decision making and help deliver lasting and effective change.
Increasing competitiveness, pricing and cost pressures are causing companies to demand that senior staff become multi-faceted business partners in order to create extra value. Today's world is as much about winning hearts and minds as it is about having the correct information and undertaking the correct analysis. Organisations increasingly value people who work across the company and can influence, listen, communicate and take decisions – those with exceptional soft skills. This provides significant opportunities for finance professionals.
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