It is generally accepted that FDs tend to be much stronger in terms of analytical and technical ability than in the so-called soft, interpersonal skills. But this should change, says Stephen Schneider, managing director of CPS, a consultancy specialising in executive mentoring and boardroom development.
“I see the world in terms of triangles – consisting of person, role and task,” says Schneider. “For leadership, you need to have skill in all three points. Finance people tend to be more comfortable around task – analysing monthly figures, feeding them back to the board. Where they have shown themselves in need of development is around person-centred issues, such as engaging people in discussions about their performance and getting them to behave differently.”
This can be a problem because the more senior a role tends to be, the more often success depends on being able to influence colleagues and win other people around to your point of view. “The whole point about leadership is that it is a gut thing, it’s about passion; it isn’t always just about intellect,” says Schneider. “People think they can turn up with their brain and solve a problem, but that isn’t necessarily going to work. Leadership, as opposed to management, is about engaging with the opposition, using emotion to move people’s thinking and behaviour, and not just relying on statistics and figures.”
Schneider believes that confidence in interpersonal skills also improves performance on the board, not just in being able to influence other directors’ opinions, but also in feeling able to challenge board-level colleagues from different disciplines. “This is an issue because you are not on the plc board just as a finance director; you do have responsibilities outside your silo,” says Schneider. “Finance people may prefer to stay within their silo, their comfort zone, but as a finance director I should feel comfortable challenging the HR director about staffing issues. I am a board member with responsibility for finance, but I am also responsible for personnel, marketing and operations, on behalf of the shareholders.
I am on the board to exercise my judgement and not to hide behind my finance label.”
Schneider believes there are parallels between the accounting profession and medicine, where patient-related issues such as communication skills have recently moved up the agenda. “Doctors also much prefer analysis and they are highly professional people, but their training is now starting to take softer issues into consideration,” he says. “Doctors didn’t used to be valued for this, but now they are. Part of their training now includes work in psychoanalysis and interpersonal skills. I don’t think enough finance people are trained in this area.”
Part of the problem is that finance professionals, like doctors, have not traditionally been valued for their interpersonal skills. However, as intangible assets become more vital for determining corporate valuations, such softer skills are becoming more important for all board members.
Management ability and credibility, as judged by the investor community, is one key element of a company’s intangible asset chest. “Finance people should see working on personal issues as an opportunity, rather than a problem,” says Schneider. “I would encourage them to explore what are quite complex and sensitive areas, but ones vital for their success.”
CPS provides mentoring or counselling to senior execs from a range of disciplines, often people about to move into a board-level position for the first time. “We have a specific model, because we believe that in order to make serious change you have to commit to a serious journey, and our journey is based on 20 one-and-a-half hour meetings over a 52-week period,” says Schneider. “Meeting roughly twice a month allows enough time between meetings for people to experiment and try moving beyond their comfort zone. It’s about taking them into the area of uncomfortableness (sic) and encouraging them to live in that state of uncertainty for a period of time. We can give people feedback, but we are not here to judge.” Part of the benefit of the course comes from simply being able to talk to a disinterested party outside the executive’s organisation, he says.
Schneider says that there is hope even for those who feel particularly daunted in the interpersonal arena. “Our evidence is that people who never dreamt they could make change, can do so,” says Schneider. “With the proper commitment and support, people can make serious change – and go on to greater success as a result.”