Time to Step UpBy
It’s easy to get lost in the swirl of change over the last decade and to fail to see the forest for the trees, but the message is clear: Our profession has changed irrevocably. We’re no longer just recordkeepers who dutifully process transactions and create reports for business leaders to use.
The seemingly infinite increase in computing power over the last two decades has rendered those manual tasks obsolete. We’ve progressed from recordkeepers to advisors to leaders, but what does it actually mean to be a financial leader now that we’ve come this far, and how do we ensure we’re on the path to success as our profession evolves?
A financial leader focuses on running the business and guiding decision making. Gone are the days of simply providing information for others to use to run the business. The forces that have disrupted our profession now provide us with the opportunity to step up and lead in a way that we’ve never done before. That opportunity was born of the very things that made us successful in the past—gathering, sorting, organizing, and understanding the very data that courses through the veins of every business. Since we understand this data at a visceral level, we’re in the perfect position to lead our companies into the future—but to assume this role, we need to hone our skills, improve our lines of sight, and adopt the mentality of financial leaders.
THE RIGHT STUFF
Technology continues to evolve at a rapid pace, and how businesses operate will change in tune with those technological developments. As financial leaders, we must continue to update and improve our digital skills not only to understand the business world but also to leverage the technology to help us be more effective leaders.
Despite the pervasiveness of technology, the financial leader skill set isn’t all digital. As professionals dedicated to the standards set by IMA® (Institute of Management Accountants) and other organizations, we must keep our finance and accounting technical skills up to date. These technical skills are table stakes for our roles. Everyone outside our profession expects this of us, and if we aren’t sharp in this area, our credibility as leaders suffers greatly.
Not all of the required skills are hard skills. While we work on our digital and technical skills, we must grow and develop our interpersonal and relationship skills. Our success as financial leaders will be predicated on our ability to communicate and influence stakeholders inside and outside our function. To lead so broadly, we must be able to take sometimes complicated concepts and boil them down into simple ideas that can be communicated to other parties to improve understanding and drive action. Without these soft skills, we’d be like a carpenter without blueprints; it’d be difficult to build the house as a team.
All of these skills are critical, but the financial leader must also develop and improve business knowledge, which is very specific to a company or industry. Without this knowledge, a financial leader lacks credibility. Given the many levels at which a financial leader must work, it may be difficult to get a deep understanding of the business quickly, but it’s critical that we step outside our comfort zone and delve into the operational details with our business partners. This effort will reward us with a fundamental understanding of the results and give us a better view into the future as we bring all of our knowledge to bear.
LINES OF SIGHT
While skill development and refinement provide a critical foundation, financial leaders must be able to see the horizon clearly. In his IMA research report “Management Accounting Competencies: Fit for Purpose in the Digital Age?” Raef Lawson wrote about the four lines of sight:
- Oversight. Use resources to monitor and control the business;
- Hindsight. Examine results and understand them at an in-depth level to learn and take necessary actions;
- Insight. Take the plethora of data that exists about a company and turn it into business intelligence that can be used to guide decision making; and
- Foresight. Anticipate the future to guide strategic planning, competitive moves, and innovation.
Financial leaders must be masters of these lines of sight and be capable of moving among them effortlessly. Oversight and hindsight fall into the traditional aspects of our profession, while insight and foresight are more recent additions to our required competencies. To be financial leaders, we must maintain more focus on insight and foresight because these higher-level analytics provide the most value to our organizations and give them and us the competitive edge necessary to succeed in today’s global marketplace.
THE MENTAL GAME
The role of the financial leader involves lofty expectations, many of which fall outside the traditional role that finance professionals have played in years past. Our comfort zone, so to speak, lies in the more technical aspects of our profession where our expertise shines, but that’s no longer enough to ensure success. We have to step up, and part of doing so is having the right attitude.
Financial leaders must adopt a business-owner mentality and have the courage and confidence to own the results of the business. No amount of technical skills or experience will make up for the lack of ownership. In general, leaders must accept responsibility if they’re to be taken seriously as leaders. Financial leaders must take responsibility for the results—absorb, understand, evaluate, and react in a way that leads the business forward.
A financial leader focuses on running the business and guiding decision making. To do this, a financial leader must have strong digital, technical, and interpersonal skills in addition to a fundamental understanding of the business and industry. A financial leader is a master of the lines of sight including oversight, hindsight, insight, and foresight and must adopt the business-owner mentality to be a true financial leader. This is a lot to take in as our profession evolves, but it’s time to step up. Our future demands it.
IMA LEADERSHIP ACADEMY
The IMA® Leadership Academy provides leadership opportunities for all members. From leadership assessment to leadership courses offered in person as well as through WebEx to participation opportunities in mentoring, be it reverse or traditional, the IMA Leadership Academy can help you meet your leadership goals and improve your leadership skills. For more information, please visit the Leadership Academy website at www.imanet.org/career-resources/leadership-academy.