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Leaders as Communicators

By David J. Elrod, CMA, CSCA, CPA
May 1, 2022

Finance leaders who communicate transparently are more likely to motivate team members and earn their trust.

 

Effective communication gets treated like an old song that’s been overplayed, but it remains a cornerstone for successful leaders. Without it, finance professionals don’t develop the necessary trust in their leader, nor does the team have the level of transparency needed to operate efficiently without becoming mired in uncertainty. Most importantly, poor communication leaves a team rudderless, casting them into the competitive sea unprepared, uninspired, and lacking direction and cohesion.

 

Leaders don’t simply anoint themselves. Rather, they emerge by building trust in those whom they lead through effective communication. Leaders need to clearly articulate their values and consistently embody those values in daily interactions with their team. As team members observe this consistency over time, they develop trust in their leader.

 

Leaders live in the spotlight, and, as challenges arise, their every word will be scrutinized and possibly misinterpreted, putting leaders’ reputation at risk, but effective communication backed by consistent actions can rectify the situation and strengthen trust. In times of stress, there are often many competing priorities, and choices need to be made. Providing an explanation to the team can help to reinforce trust even if the team doesn’t agree with the decision.

 

One of the best managers I’ve ever worked with articulated her values well. No matter what challenges we faced, we knew that she would support us. I needed to build a regional finance team to support reluctant business partners, and she offered guidance and expressed her support for me. I wouldn’t have been successful had I not trusted her.

 

Trust in leaders gets reinforced by transparency. Certainly, leaders can’t expose every salient fact about what goes on in an organization. Performance reviews must be confidential, and certain strategic and operational elements must remain private to preserve a competitive advantage. Nevertheless, effective communication requires an appropriate level of transparency from all leaders.

 

Where there’s a lack of information, speculation will fill the vacuum, and it may not be positive or productive for the team. It’s particularly detrimental in small to midsize organizations because they require a unified, cooperative effort to be successful. Organizations of all sizes that allow opacity to thrive are often beset by rumors, assumptions, and outright misinformation, which often grinds progress to a halt and sends good employees toward the exits.

 

LEADING A GLOBAL COMPANY

 

As organizations grow, transparency becomes more challenging, and leaders need well-honed communication skills to navigate these challenges. This is true at all levels of an organization, not just at the top. The best leaders ensure that their teams have the information they need to do their jobs and communicate that information to the right people across their organization with the appropriate level of transparency.

 

Years ago, I worked for FedEx. Transparency is a significant challenge for all large, global organizations, but the company dedicated significant resources to training its leaders and excelled at keeping its employees informed. When I joined, it had never laid off employees. Its pack­age volume declined after the dot-com bubble burst in the early 2000s, however, forcing it to reduce its cost structure and making layoffs an unfortunate necessity.

 

What followed was a case study in how to handle a restructuring. Leaders were up front about what would happen and how they planned to conduct the restructuring. Their transparency, while not perfect, put most employees at ease as they marched through the process. They couldn’t eliminate all the usual rumors and misinformation, but they certainly minimized them, and the company emerged from the downturn stronger because of the effective communication of its leaders.

 

POWER OF THE GROUP

 

Once leaders have the trust of the team and have embraced an appropriate level of transparency, they can unite individuals around a central idea and use the power of teamwork to achieve goals that are likely impossible for any individual to accomplish. No successful company could’ve reached its current level of success without leaders who harnessed the power of a cohesive group.

 

To build momentum, leaders must provide direction. Simply barking orders at people minimizes their potential contributions to the larger effort and leaves them feeling like a cog in the machine rather than an essential contributor. Leaders’ mandate is providing clear direction toward a strategic vision and organizational mission without being so prescriptive that individual talents are squashed or underutilized.

 

Experienced leaders understand that they must provide direction by establishing the mission, vision, and goals for their organization. The challenge lies in communicating these directives in ways that inspire employees. The best ideas in the world can fall flat if the communication is muddled or confusing. Even if senior leaders initially communicate very well, their messages can become distorted or lost in translation because of middle managers’ poor communication.

 

How do leaders avoid these issues? They keep their messaging simple and clear, repeating it often until it becomes second nature to everyone on the team. When I worked at Microsoft years ago, the company’s stated mission was to help everyone realize their potential. That oft-repeated mantra appeared in all our internal communications. The simple, clear message became our North Star, a guiding principle that required little thought as we did our jobs. The fact that I remember it so well after almost a decade proves the impact of excellent communication.

 

Effective, transparent communication may not have the appeal of flashier elements of leadership, but it remains the hallmark of a successful leader. Without it, leaders will struggle to build trust with their direct reports, and the team will fail to achieve what was envisioned in strategy meetings. With it, even ambitious team goals become more attainable.

 

David J. Elrod, CMA, CSCA, CPA, is vice president of finance at Lightship and a member of IMA’s Atlanta Chapter. You can reach him at davidjelrod@gmail.com.
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