In today’s global economy, financial leadership and proper functioning are two leading valuables that build business success and longevity. However, the change of pace is more rapid than ever. Numerous companies are shifting into complex entities, leading you into unfamiliar territory.
Many financial leaders believe they’re spending too much time focusing on the wrong areas in business. A good CFO knows that assessing and communicating value is more important than spending time on reports.
Your objective is to increase the effectiveness of financial risks that carry out long-term sustainable growth. However, you must simultaneously fulfill CEO expectations concerning company performance.
Above all, working more closely in relationship establishment, customer orientation and financial leadership principles through time management are becoming more apparent in business.
What to Consider as a Business Financial Leader
Although financial leaders can agree that traditional accounting skills are still a significant component of a well-rounded professional — strategic thinking, communication and collaboration are the elements that make up a multifaceted business environment.
Strategic financial executives are always looking for ways to provide insight and value. The graph below shows that CFOs spend most of their time on nonfinancial issues, such as strategic leadership and organizational transformation.
Financial leaders also have a clear understanding of their company’s operations. They typically work with other departments such as systems management and IT to gather key information. This helps them develop or make decisions through the use of technology within the business.
If you think about it, there are numerous quality assets a financial leader must retain to foster a company’s success. Here are four key examples to consider based on these valuable attributes.
1. Understanding Technology Is Key to Strategic Thinking
The ability to think and have the bigger picture in mind is paramount. You can no longer succeed without expanding your horizons. With that in mind, data is vital information.
However, it can be easy to focus too narrowly on the information in front of you. Most financial leaders are not always looking at the bigger picture, but it can enlighten your perspective in finance when it’s linked to strategy.
Understanding big data lets you predict scenarios and provide recommendations for management. In turn, this allows you to establish a business partnership at a decision-making level.
One key example of a strategic leader would be a professional in probate planning. An estate planner can think long-term while working with clients in financial, trust fund and taxation matters. Their responsibility falls solely on providing probate cash advances by assessing clients’ assets. They must think strategically about crafting a long-term plan for their clients when working in acquisitions.
Professionals who understand big data can bridge the gap between finance and business. In addition, having this skill can genuinely help companies experience long-term success.
Overall, understanding long-term strategy is one of the most effective skills you should develop as a professional.
2. Maintaining a Dynamic Environment Involves Fluidity
Fluid skills bridge technology and accounting fundamentals. These two skill sets are key to succeeding in business and finance. Fluidity allows you to be resilient and adaptive.
Technology drives a rapidly changing business environment and determines the skill sets of the future. Taking on new responsibilities and adapting to unique circumstances will be a challenge you must overcome.
For example, automation, artificial intelligence and data analytics are the reasons for accelerated business evolution. The ability to gather nontraditional data sources is an emerging skill set and will be something to consider in the years to come.
3. Collaboration Is Imperative for Risk Management
You must have the ability to participate in collaborative decisions when a business environment is uncertain and increasingly complex. Partnering with colleagues and clients can help make an organization run more smoothly.
Business models from decades ago are outdated, and cross-functional teams need to collaborate. Furthermore, collaboration among departments makes them more cohesive.
Financial professionals must understand how other departments function. Listening to others and addressing challenges from different perspectives fosters diversity, better collaboration and growth.
The best way to form this asset is to provide yourself with the right skill sets, especially when it comes to listening.
4. Communication Is Prevalent
Understanding data analysis and complex business processes are vital skill sets to acquire. However, the communication abilities needed to convey the meaning behind the numbers could be lacking.
While communication is effective for collaboration, management relies on accurate information for decision-making. This soft skill is a particular challenge in the business world most of the time.
The ability to convey complex information is imperative for you and your team to understand. Communication should be the top priority you focus on in business. However, this is one of the primary skills that financial professionals lack.
Without effective communication, you miss out on being a top-performing finance professional. You must use the numbers to tell a story, foster business partnerships, manage others and communicate.
Qualities like passion for finances, diligence and vulnerability are all parts of what makes you a leader.
Being vulnerable is not about being afraid about what you don’t know. It’s about what you want to learn and bringing emotion into that aspect of your work.
Financial Leadership Lessons for Businesses
You can build diverse skill sets and ensure growth and professional development. Consider continuing your education to do this.
Educational programs can help with growth and empowerment. As a result, your organization can sustain further success in the long run.
Another thing you must be mindful of is that employees are motivated by more than just income. Your team will make an impact if you provide a purpose for them to work hard. If you want your team to accomplish goals and follow in your footsteps, you must be transparent with them.
Your department needs to know what you’re working for and why. They’ll feel a further connection to their work once they understand what you’re fully passionate about. One way to accomplish this is to be consistent with financial team meetings so your employees avoid losing sight of what’s truly important.
COVID-19’s impact on companies has led 42% of financial leaders to say they need to focus on financial planning. Remembering key numbers at the right moments is essential for making the right decisions. The power of consistency can make the most of difficult times, especially when it comes to investment. With every downturn that occurs, an upturn will be sure to follow.
Finance Skills Leaders Need
Only 11.5% of financial executives qualify themselves as leaders in financial planning, analysis, and risk and compliance.
Understanding and acknowledging your industry’s financial terrain lets you make sound decisions, bolsters your skill set and drives business success. You must be strategic when providing a unique standpoint in the decision-making process.
Here are the top 10 skills you’ll need for success:
1. Integrity
2. Fearlessness
3. Strategic command for finance and technology issues
4. Accessibility
5. Vision
6. Having an interpersonal approach to relationships
7. Embracing change
8. Strong communication
9. Ability to inspire and motivate others
10. Balancing various demands
Financial leaders that exhibit these characteristics can make a lasting and positive impression on their company – and in the business world.
Measuring the Effectiveness of a Financial Executive
The need for financial leaders is becoming more critical as the business world evolves. They are key to an enterprise’s financial health, so it’s imperative to measure their effectiveness to understand how they add value to your organization.
While attempting to do so, you can find out how they help maintain financial success by asking yourself the following questions:
- Do you value your financial leader’s input on strategic decisions? Do their opinions have any influence on business decisions?
- Does your financial leader engage with managers or communicate only with financial managers when forecasting?
- Is your CFO able to analyze financial data based on business strategy or personal input?
- Is your financial executive confident enough to present to potential investors?
In addition to learning about your financial leader’s value, you can assess their ability to handle challenges, including:
- External factors: Market shifts, supply chain disruptions, uncertainty in sales, cash flow and financial considerations
- Internal factors: Strengths and weaknesses, proper decision-making, accurate data analysis
While you examine whether your CFO is helping the company run smoothly, you should also review your entire operations. When CFOs first enter their position, they need to develop a list of KPIs (key performance indicators) to keep track of tasks. Utilizing financial metrics and asking the right questions can determine if your CFO performs at a commendable level.
Developing Valuable Skills as a Financial Leader
Being an effective financial leader may not be an easy task. You have higher expectations from investors, tighter government regulations, global competition and rapid technological advancements as a list of growing demands.
Financial leaders are the key to running a successful organization. Additionally, your skills and expertise are required to go beyond the knowledge of numbers. You can eliminate the barriers to success by ensuring development goals are an ongoing conversation among you and your colleagues.