Research by Richmond Events, organisers of the Finance Directors’ Forum, finds that FDs of large- and medium-size companies say there is a difference between the characteristics that make a good business leader and those that make a good finance director.
The ability to inspire and motivate is a very important attribute for a leader, according to 72% of finance directors surveyed, closely followed by effective communication skills (64%) and the ability to communicate a vision (60%). However, respondents say the most important attributes for FDs do not include many of the ‘softer’ skills of leadership. In fact, an ability to inspire and motivate, and communication of vision, ranked towards the bottom of the most important FD attributes.
Unsurprisingly, perhaps, FDs feel that personal integrity (79%) and decision-making ability (72%) are more important than shouting from a soapbox. But developing business strategy also ranks low on the list.
It appears that FDs do appreciate the growing importance of getting the finance message across to other business functions, ranking general communication skills third. But never ones to blow their own trumpets, FDs rate communication as their key leadership weakness, closely followed by an inability to inspire staff, and communicate a vision. Worryingly, 10% of respondents also say poor personal integrity is a major weakness – perhaps due to the recent raft of accounting scandals.
When FDs were asked to identify the key area of improvement to the quality of leadership in their organisations, communication is a recurring theme, with “clearer internal communication of our vision and updates of progress”, “more face-to-face interaction between top management and lower level management” and “we need more time to walk around and talk to staff”, among the top responses. In addition, “we need one clear leader”, “the entire management team should share the vision”, and “people need to leave their personal agendas at home and focus on the business and shareholders”, were some of the more worrying responses.
Inflexibility is cited as a major problem for businesses, with 27% of FDs saying that keeping up with the pace of change is their company’s main leadership challenge. Staff issues such as recruiting, retaining the best people and getting staff to work effectively together also feature as top business leadership problems.
When asked what would make FDs better leaders, respondents generally thought that finance has become too insular and needs to understand other areas of the business. One respondents believes FDs should be subjected to enforced secondments in sales departments and another feels FDs should be moved into a commercial department, perhaps in a country or subsidiary manager role, for as long as a year. Finance directors also want more management training, as “too often FDs are expected to know it all”. One respondent even believes army training would be beneficial for FDs.
When asked to rate themselves as leaders on a scale of 1-10, where 1 is highest, 40% of FDs plumped for 4 – one above average. Only 5% of FDs gave themselves a top leadership rating of 1, and no respondents gave themselves a 9 or 10 – even though one FD cited a lack of charisma as the biggest leadership challenge.
The Finance Director’s Forum will set sail on P&O’s flagship Aurora on 4 November, returning on 7 November. Contact Lisa Green at email@example.com or phone 020 8487 2269 for details.
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