Workplace Issues

Accountants Need to Show Their Softer Side

Almost 60 percent of CFOs, controllers, and senior finance execs said communication skills and the ability to focus on a corporation's goals were l...
Kathy HoffelderMay 7, 2013

This is the first of three articles in a special report looking at accounting and finance skills. Also included are New Hires: A Skills-and-Demand Balancing Act, which explores U.S. staffing needs, and Non-U.S. CFOs Donning Green Eyeshades, which looks at the qualities most needed among accounting and finance staff abroad.

When staff accountants become company experts in something as challenging as cost accounting, they are able to advance to a reasonably high place in a corporation. But reaching senior management levels typically involve the development of a broader sense of the company’s business.

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The divide between skills typically associated with accounting and finance staff and those that typify upper management seems to be growing deeper, the result of a March survey of 422 public and private CFOs, controllers, chief accountants and other senior finance executives suggests. 

The results show that today’s accounting and finance staffs have more than enough data skills. But they often lack the ability to wade through the numbers successfully to communicate with senior management, according to the respondents, who represent U.S. corporations with sales of between $50 million to over $1 billion.

What skill is most lacking in today’s finance and accounting professionals?  “Communicating with other groups” tied for first place among the respondents with “thinking about the company’s goals and focus as a whole.” Each answer drew a 29 percent response rate, followed by 25 percent who said “displaying abilities to take charge of situations,” 9 percent who chose “applying IT skills,” and 8 percent who said “traditional finance understanding.”  (See Figure 1.)

As one respondent pointed out, more effective communication skills should help accountants advance to higher levels in a firm. “The ability to communicate across all functional areas is critical to both the finance/accounting professional and the organization. Without good communication the finance/accounting professional’s ability to positively influence the strategic direction of the company will be limited,” notes a controller at a small auto concern.  

Ware Grove, CFO of CBIZ, a finance and accounting advisory affiliated with Mayer Hoffman McCann, the firm’s public accounting arm, concurs. Accountants struggle verbally in presentations and in writing, he says, a shortfall that can hold them back from rising into senior management. “The people that rise to the positions of senior team leadership or controllership typically have those skills.”

Focusing on data is a typical quality of most accountants, from entry level on up, says Grove. But they often underestimate the importance of softer skills like effective communication. “If people are frustrated with the controller, it’s not that the controller isn’t working until 8 p.m. or attending to details, it’s because he perhaps doesn’t communicate well,” he says.  

Some of that comes with the territory. Finance and accounting jobs in general require a lot of precision, accuracy and technical knowledge, which is not so easily communicated to others—even within the same team. According to Grove, it’s easier for an accountant or a member of the finance staff to just do a complicated task than to stop to explain it to someone else. Even though teaching someone else to do the task is an investment in the future, he says, “sometimes accountants are reluctant to do that.”  

But good communication can pay off.  That’s especially true in finance and accounting units within more people-focused industries like entertainment. Jim Blake, CFO, vice president and treasurer of Morey’s Piers, owner of an entertainment complex based in Wildwood, New Jersey, finds that accountants and finance staff “are really good crunching the numbers and coming up with the right data”  but they lack the ability to communicate orally and in written reports, he says. “When I’m looking for new help I’m looking for people that have those skills.”

Even in more industrial fields, however, it’s important to have finance and accounting units communicate better with the rest of the organization. “There’s so much data thrown at people today that one of the things we’ve been trying to have people focus on is communications,” says Brian Valentine, CFO and corporate vice president of The Lubrizol Corporation, a specialty chemicals company and wholly-owned subsidiary of Berkshire Hathaway based in Wickliffe, Ohio.

Lubrizol seeks to deepen the skills of its finance staff  via a training program that rotates finance staff among different accounting positions every three years. But Valentine also says the training tries to broaden the perspectives of the group by introducing such values as focusing on the customer. The rotation could take trainees to “a number of different places once they are done with this program,” he reasons.

Such “big picture” thinking is precisely what the CFO of a small non-profit firm who took the survey noted. “Often times accountants go through the motions without having a clear understanding on why they’re doing something and how what they do impacts others within financial services and the organization as a whole.”

Similarly, as one vice president of accounting at a $1 billion telecommunications company said, “finance and accounting professionals need to be able to look at the numbers and ask ‘why’ as opposed to simply calculating results and putting them on spreadsheets or PowerPoint presentations.”

Indeed, thinking strategically was cited by 65% of the respondents in the survey as “important at the higher levels and at the lower levels” of accounting and finance positions. In contrast, 33% said thinking strategically was “important at the higher levels, not necessarily at the lower levels.” (See Figure 2.)

As Lubrizol’s Valentine notes, “the base accounting and finance technical skills are a given and something that we really want to ensure people have as they come into the fold.” But it’s people that can “step back and understand the big picture” that the company is looking to hire.

To him, therefore, it’s crucial that finance and accounting staff “partner” with Lubrizol’s business units to understand the strategies driving the company and be able to bring a global perspective to their jobs. Lubrizol, which has more than half of its business overseas, expects more expansion in Asia, particularly China, where it is building a new facility.

Partnership is a common theme, one with which the controller of a mid-sized chemical supplier who took the survey is familiar. “The [accounting] team has traditionally been responsible for closing the books and making entries. I am pushing them to become partners with the business. This is a challenge because they are having to think about business matters more than debits and credit matters.”

If such thinking takes number crunchers all the way up the corporate ladder, that’s an outcome with which CBIZ’s Grove would be comfortable. “I want to find people who have some ambition and want to grow. It’s fine with me if everyone wants to be the next controller or CFO down the line.”

But too much strategic thinking and not enough actual doing can be harmful as well. As the senior finance director of a travel and entertainment company that takes in more than $1 billion a year noted, corporations need to be careful that the business is not filled with an “over ambitious strategic thinker at every level.” After all, “someone needs to do the work,” he adds. “Everything has value.”

More Talking, Less Crunching
So what’s the solution? Among the remedies to correct part of the skills void, survey respondents said, more schooling in communication could help. Potential future members of accounting and finance staffs should focus on improving their oral and written communication skills while they’re in college and afterwards in courses yielding Continuing Professional Education (CPE) credits, according to one mid-sized CFO at a private financial services firm.  

Similarly, a senior vice president of a 1 billion telecom granted that universities teach the basics of accounting and finance. But “they do not do a good job of teaching analytical skills, data presentations, the need to create strong relationships, or how to put together data models.”

Overall, survey respondents did not express much dissatisfaction with the current undergraduate finance and accounting programs of U.S.-based schools and universities. They just want some of the softer skills, like communication and strategy, added into the mix.

More than 80 percent of respondents said they would either “agree” or “somewhat agree” with the statement that undergraduate finance and accounting education at U.S. based institutions provides the right skills needed for professionals in those today.  That compares well with only 10 percent who said they would “disagree” and 4% who said they would “strongly agree.” (See Figure 3.)

There was, however, a fair amount of criticism of the current state of finance education. Respondents said that not enough ethics was being taught, that professors lacked practical, hands-on experience and that students weren’t inquisitive enough.

As one controller at a small private manufacturer put it, “there is still a focus in the colleges on only what is needed to be successful in a CPA firm—which is important, but not what drives success at most corporations.”

Leading the Charge
Ehud Sadan, associate managing partner at Anchin, Block & Anchin, an accounting advisory servicing private corporations, summarizes some of those missing finance and accounting qualities in one word: leadership. In both experienced staff and new hires, he says, “we are looking for leadership capabilities as much as we are looking for technical skills.”

To him, the ability to learn and learn quickly, interpersonal skill, knowing how to solve problems and the ability to motivate others can make a good leader out of an accounting and finance professional. “We want these people to be able to communicate with business owners in a professional and a correct way. We are looking for all these interpersonal capabilities.”

Such demands come straight from clients, Sadan says. “Over the years our clients expect much more from us. Our clients expect us to be business advisers and look at areas that are not just accounting and tax but personnel, future operations, exit plans, and communication with other family members [as private wealth clients]—dealing with challenges that are much beyond the traditional accounting.”

Leadership qualities were cited in the survey by several respondents as a skill that is decidedly lacking among some newer accounting and finance staff. For a senior vice president of finance at a $1 billion auto concern who took the survey, that could have dire consequences. The need for leadership skills is only going to increase as the youngest baby boomers approach retirement. 

The same leadership concerns were found lacking in even the more experienced accounting and finance staff. “We still have a large population of tenured professionals who just get the basics done but do not have the curiosity or the passion to dig deeper to identify opportunities and create a compelling case for change,” noted an executive vice president of finance at a $1 billion private retail operation.

This is the first of three articles in a special report looking at accounting and finance skills. Also included are New Hires: A Skills-and-Demand Balancing Act, which explores U.S. staffing needs, and Non-U.S. CFOs Donning Green Eyeshades, which looks at the qualities most needed among accounting and finance staff abroad.

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