AS THE FOOTBALL TRANSFER WINDOW came to a frantic close this week, findings from CEB’s Finance Talent research may shine a different light on Real Madrid’s £85m purchase of Gareth Bale. Eclipsing the £80m paid by Manchester United for Cristiano Ronaldo in 2009, the 24 year old will be earning an eye-watering £300,000 per week, or £29.76 a minute, even when asleep.
Instead of following the Galácticos approach of Bale’s new employer, with a focus on recruiting individual superstars, CFOs should adopt the tactics of his former club, Tottenham Hotspur, which used part of the proceeds of his sale to bring in seven new players to balance their team’s overall competencies.
Indeed, finance heads that focus on building a balanced team will be much more effective at delivering value than those looking to recruit or develop star individuals. To understand why, one has to assess the playing field of finance competencies, much like the positions of a football pitch.
CEB surveyed nearly 700 finance managers at more than 75 global companies looking at the various competency levels of 2,200 staff worldwide. The survey assessed 86 soft skills and 90 functional competencies, including all the technical expertise you would expect of the finance function, but also ‘soft behaviours’ – such as good communication skills or broader commercial awareness – that characterise successful finance leaders.
Analysis of the results yielded three discoveries. First, finance staff exhibit five types of competencies. Second, the average finance team is weak in the competencies that lead finance to provide better business support. Third, finding an employee with a perfect mix of competencies is highly unlikely. The good news for department managers is that there is a better approach to team building.
Most finance teams have taken a Galácticos approach to recruitment, identifying individual candidates based on their ability to execute and learn. These are the traditional “hard worker” competencies that are well represented in most finance teams, and often sourced repeatedly from the same talent pools of those with finance and accounting qualifications to their name. Unfortunately, the technical skills encompassed by the “hard worker” competencies have shown a negligible impact on overall department performance. Much like the first Real Madrid Galácticos experiment of the early 2000s, this type of recruitment strategy has led to ultimately unsatisfying results, with 87% of CFOs reporting they are unhappy with the current state of their team’s talent mix.
A focus on recruiting only star individuals within this traditional wheelhouse leads to unbalanced teams. Progressive finance departments have recognised that non-technical skills, including the abilities to communicate clearly, demonstrate business acumen and foster buy-in from stakeholders have a huge impact on the department’s ability to deliver business value. This non-technical skill set, made up of what we call the “Pathfinder” competencies, makes an outsized contribution to overall team effectiveness.
Unfortunately for managers, only 1% of finance staff excels and demonstrates high proficiency in all three of the Pathfinder competencies. Instead of looking for a new breed of superstar, managers should focus on balancing competencies at the team level. Just like in football, a highly prolific striker rarely has the attributes to double as a holding midfielder or centre-half.
CFOs can bring their teams into better balance by focusing on hiring and rewarding the right behaviors. Currently, too many employee performance incentives are focused on individual performance (akin to goals scored) rather than that of the team (trophies won). This can be rectified in the hiring process itself, by using case study style interviews, which have been shown to be a more effective tool in screening for the Pathfinder competencies. Meanwhile, redesigned performance reviews ensure soft-skill competencies are being recognised and continuously developed, through means such as highly personalised coaching.
CFOs should resist the temptation to seek out the next Gareth Bale of finance. There are too few of them, and even superstars can’t perform at a high level for every competency. Both Real Madrid’s executives and finance leaders need to heed the lessons about improving team performance – both in business and football. For those who focus on a collection of employees with balanced competencies, rather than chasing after the next wunderkind, the results will soon follow.
Kruti Bharucha is a senior director at CEB