Salveson Stetson Group (SSG) recently conducted a survey on CFO Career Satisfaction, and one of our questions elicited some thematic responses I was not exactly expecting. When asked what skills they felt were most critical for success in their current roles, CFOs’ most popular answers were business acumen and emotional intelligence.
The first response isn’t all that surprising. Over the past two decades, the CFO role has emerged as first among equals on the senior executive team and one which CEOs and boards of directors are increasingly turning to for broad operational and strategic input. While not universal, we have also seen companies invest in a more well-rounded development plan for their high-potential finance leaders, where leadership assignments outside the function or management of special projects with board exposure are becoming increasingly commonplace.
While things like analytics capability and M&A experience were also cited as critical skill sets, a deeper dive into survey responses leads us to believe CFOs employ these skills and experiences to provide the broader perspective CEOs ask for. Increasingly, whether in the title or the scope of responsibility, we see the CFO position continues to evolve into a role with much more operational and strategic responsibility than was prevalent in the previous generation of finance leaders.
Developing Soft Skills
Whether or not a CFO has a textbook definition of emotional intelligence (EQ), it is apparent that effective communication skills, empathy, and an interest in their teams' personal and professional development are considered critical to performance on an individual and organizational level. Underneath this broad heading, the ability to build strong relationships up and down the organization, as well as strong cross-cultural competency, were valued as beneficial skills for the CFO to possess.
If soft skills truly differentiate success in the CFO ranks, then what can a financial leader do to increase their competency in this area? Like any other skill set they have developed in their careers, practice, discipline, and individual/organizational support are required to increase a CFO’s EQ. In our experience, focusing on the following areas can help accelerate development.
1. Practice Active Listening
Few of us give colleagues our full attention in individual interactions. But those of us who develop trusting relationships demonstrate a genuine interest in the colleague in front of us, whether they are a superior, peer, or subordinate. Combined with the empathetic orientation derived from high emotional intelligence, strong leaders and active listeners build resilient organizations that can solve problems and adapt in personally and professionally safe environments.
2. Focus on Team Development
Being a champion for professional development within your team is only table stakes for a highly effective CFO. Being a strong and empathetic communicator is vital to creating a positive work environment, but I have found that a CFO who can delegate accelerates team development. The former creates trust in the CFO, the latter shows the team that the CFO trusts them. Delegating tasks that stretch team members in an environment where they can fail encourages innovation and expands organizational capacity.
3. Be Open to Feedback
Creating an environment that encourages colleagues’ input into your observed behavior will provide a feedback loop that may be crucial to your personal development and the success of your organization. In asking for feedback, use various sources for input: one-on-one conversations in environments where trust has been earned, piggybacking on employee surveys, or having a coach (see point 4) collect feedback on a 360-degree basis.
4. Invest in an Executive Coach
Enhancing any skill is difficult; without support, it is doubly so. In my experience, partnering with a capable executive coach can greatly benefit a CFO seeking to increase their effectiveness, particularly in organizationally complex environments where building positive relationships is key to success. While coaches have a variety of backgrounds and approaches, to develop greater emotional intelligence, consider a coach with a background in psychology.
So, by their evaluation, today’s best CFOs might be more empathetic business strategists vs. skilled functional technocrats. Not long ago, the CFO was counted on primarily to guarantee the integrity of the numbers, focusing their attention on what was vs. what is to come. Building overall business acumen over the past two decades has increased CFOs’ value to their companies while creating increasingly attractive career opportunities, particularly for those already at the top of the finance function pyramid.
The next step in CFO evolution will add emotional intelligence to the toolkit. I say evolution intentionally because, like other wins for the function, it will only happen through practice and over time. CFOs who want to operate at the highest levels and deliver the most value must consistently commit to behavioral change that creates trusting work environments and durable, open relationships. Only then can a CFO unlock the potential of their team, their organization, and themself.