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.
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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.
How can the level of soft skills be improved? This is the responsibility of both the organisation and the individual.
Most finance functions have made some attempt in recent years to reshape the organisation, teams and capabilities to create the “Finance Function of the Future”. Many have found the transition far from straightforward.
In order to succeed, the organisation needs to create a framework where people with advanced soft skills can flourish, and where others are given the opportunity to develop. This requires unambiguous commitment from everyone involved and for senior management to create positive role models. Situations where soft skills were instrumental in successful outcomes need to be celebrated and rewarded.
Staff need to be given practical help to improve their soft skills. Training courses, mentoring and self-directed learning are all good options. Job rotation provides the opportunity to learn and teach new skills in a new environment.
Career paths need to be redefined to embrace more routes to develop the required expertise.
Addressing this typically requires a fundamental rethink on the shape of the organisation and the nature of finance roles. Many companies are progressing down a transformation route to distinguish between transactional accounting, controlling and reporting on the one hand, and business analytics and partnering on the other, and such a journey can be used to enhance the attractiveness of key finance roles. The irony is that implementing this change often serves to emphasise the scale of the skills and behavioural gap.
The individual also has his/her part to play. Senior finance staff should lead by example, and take personal ownership of their own development.
Witnessing the strategies used by sales directors and others whose jobs rely much more on soft skills can be hugely beneficial. This “looking and learning” approach can also help to build networks.
Finance professionals can also challenge themselves by taking on fresh responsibilities and new projects outside their comfort zone, and should not be afraid to seek help when encountering difficult or unfamiliar situations.
Self improvement can also take place outside the work place. Personal mentors, web seminars and online communities can all be valuable sources of support.
The finance function is at the heart of a company’s operations and has significant influence over the business. In order for this influence to be truly effective, finance professionals need to deploy a range of soft skills alongside harder, technical ones.
Finance functions and individuals should assess their competency in terms of soft skills and develop plans to enhance them. For the finance professional with advanced soft skills, or the desire and aptitude to obtain them, the opportunities have never been greater.
Neil Wolstenholme is a partner and Simon Bennett is a director with Kurt Salmon