Date posted: 01/12/2016 5 min read

5 changes to make you an exceptional leader

To be successful leaders, accountants and finance professionals may need to adopt new habits and discard some ingrained ones

In brief

  • Accountants may need to unlearn some entrenched habits to transition into leadership roles
  • An accountant’s dominant logic, such as factual thinking and attention to detail, may need to soften
  • Finance professionals are in a unique position to become successful business leaders

By Tony Malkovic

When it comes to leadership roles in business, accountants and finance professionals have an edge over other professions.

Their insights and acumen are highly prized by the corporate sector, says Dr Byron Hanson, an associate professor at Curtin Graduate School of Business in Perth.

“The language of business matters now. If you can’t speak finance, it’s very hard for you to be a CEO or senior leader,” he says.

“I just see CFOs all the time being the heir apparent to large companies. They hold the cards that so many other people in the organisation don’t have.”

Perhaps the not-so-good news is that accountants and finance professionals might have to unlearn some of the things that made them experts in the first place, in order to successfully make the transition to leadership.

Hanson has been researching the gaps in the training and skills of finance professionals, particularly with regard to leadership development.

His paper, Leadership by the Numbers: Transitioning Finance Professionals to Leaders, was published earlier this year in Massachusetts Institute of Technology’s Sloan Management Review.

Several years ago the CFO of a large company told Hanson he was concerned the business only had a 30 per cent success rate in promoting finance people into leadership roles. What could be done to improve the situation?

Less can be more

In practical terms, it turns out that turning finance professionals into business leaders doesn’t just involve adding to their skill sets but can also involve subtracting, or at least downplaying, entrenched ones.

“The first thing I would really encourage them to think about is what they need to unlearn,” says Hanson.

“We so often think that leadership and learning is to keep on adding, but we have to unlearn some things and change their [finance professionals’] framing about how they’re seen — what they value, and what they have done day-to-day for success, is not going to make them successful in leadership roles.”

As part of his research, Hanson interviewed 35 finance professionals and he identified the five key leadership capability gaps as:

  • Strategic thinking
  • Influencing across boundaries
  • Motivating/empowering others
  • Leading and implementing change
  • Innovation

But he says such generic leadership skills can be a bit hit and miss for specific professions such as finance.

What’s often needed is for people to change from the dominant logic — the mind set or mental models — of their profession.

In effect, they might have to shake off some of the ways of thinking that they learned over years, maybe decades.

Five transitions

Feedback indicates the dominant logic of finance professionals involves such things as factual thinking, attention to details, adherence to rules, and viewing things in a structured way.

But Hanson argues there are five critical changes, or transitions, that finance professionals need to make to become successful business leaders.

From the expert to leveraging expertise

Hanson says finance people pride themselves on their expertise, which belongs to them and can seem like a secret language to others.

But, despite what some people think, you don’t have to be the smartest person in the room to be a good leader.

Making the most of your expertise can be more important for leaders, and he gives the example of leadership work he’s done with technology companies.

“Tech people like to be the smartest person in the room, they hate to lose their technical expertise,” he says.

“And there’s a feeling of loss, ‘I’m no longer the person to go to for coding’.

“They desperately try to hang on to that (expertise), at the expense of being the leader they need to be.”

Hanson says finance people need to realise that the transition to leadership doesn’t mean a loss of expertise, but rather an opportunity to leverage the skills they’ve honed in a more valuable way.

From apprenticeship model to a coaching model

Hanson says much of the finance profession, especially accounting, involves an “earn your stripes” style of learning and acquiring skills.

In many ways, it’s a white collar apprenticeship.

Junior finance professionals learn through observing and working with seniors whose oversight helps them avoid mistakes. If the work is complicated, the senior accountant might step in and complete it.

A “doing the work for the team” approach and the apprenticeship model might help hone people’s technical skills but leadership involves coaching: less doing, and more motivating and influencing.

But it’s a big ask for some people.

Or as one survey respondent put it: “Typically, finance people are quite detailed oriented ... it is in our DNA … it can be hard to delegate and let someone else get on with the detail.”

From reporter to translator

Hanson says finance professionals who step into leadership roles need to recognise that providing the numbers is not how they add value any more.

Their leadership transition might instead involve creating meaning, simplicity and an informed point of view for their organisation to make better strategic choices.

In effect, you can’t expect the numbers to speak for themselves or tell — or sell — a complex story.

That’s a leader’s job: explaining financial data and translating it, communicating it and telling a compelling story, one that people can understand and follow.

What might be obvious to a financial expert isn’t always clear to others.

“I remember sitting in a session with a finance professional, and we were having an interesting debate about narrative,” Hanson says.

“He said: ‘The numbers are right here, the numbers tell the story’.

“And I said: ‘No they don’t. You (have to) tell the story’.”

Finance professionals who step into leadership roles need to recognise that providing the numbers is not how they add value any more.

From the right answer to multiple answers

For most finance people, delivering the right answer or set of figures is essential.

But Hanson says leadership can be more ambiguous. Sometimes there may not be a right answer but multiple options.

Finance professionals are taught to see problems as complicated but having a correct answer. Leaders might have to see things differently.

He cites one CEO, who used to be a CFO, who says finance people sometimes come to him and say they’ve analysed things and have the answer to an issue, but without considering the bigger picture.

“I tell them you’ve got to understand your environment and the context in which you’re presenting these numbers. And is that really the right answer?” the CEO explains.

“You need to unleash your thinking a bit.”

From a value protector to value creator

Hanson says the final leadership transition for finance professionals is to learn how to create wealth, rather than think in terms of being risk-averse and a protector of wealth.

That’s because a leader’s success is often measured in terms of how much value they create.

He quotes one former CFO who has made the transition to managing director: “Business leadership is trying to turn one dollar into two dollars and that is quite different … you can see (finance) people almost have a lightbulb moment sometimes when they’re transitioning between the two.”

Hanson says finance people need to challenge their mind set.

“Leadership is a little bit about risk taking and courage and making mistakes,” he explains.

“Yet if you say to a finance person that it’s okay to make mistakes, they literally start to vibrate.

“They go: ‘No, no, that’s not what we do’.

“And you say ‘That’s not what you do — but that’s what leaders do’.”

The bottom line

Hanson says the bottom line is that finance professionals have a unique opportunity to become business leaders. When they make that transition they provide their organisations with a unique competitive advantage.

He tells them that, in effect, they have a head start in two areas.

“You speak a language that is going to matter more and more to businesses, you need to leverage that and believe that is something that nobody else really can bring,” Hanson says.

The second thing that finance people bring is an understanding of the importance of values and ethics.

“If you develop those things early, you are so geared for executive leadership roles, much better than other professions because you have both this language and understanding of what really matters.”

Tony Malkovic is an award-winning freelance journalist.

This article was first published in the August 2016 issue of Acuity magazine.