What Makes A Good Finance Leader?
When you think of a good finance leader, the first things that may come to mind may be:
Technically minded
Strong experience
Great education
All of which are important, but it definitely doesn’t stop there. It requires all-rounded skills and mindsets.
To be a finance leader, especially if we’re talking at CFO level in a large organisation, your responsibility would be to not just ensure things run smoothly in the finance department, but you’d be making the most crucial financial decisions, whilst considering any investments, stakeholders, and long-term directions for the organisation.
Here are 5 things that we think make a good finance leader:
SOMEONE WHO IS WILLING TO GET STUCK IN
Basically, somebody who isn’t afraid to get their hands dirty...
The strategic and commercial aspects of finance are generally more interesting to most people, and once you progress to a leadership level, these things will become your main focus. However, the best finance leaders are happy to get involved with the transactional side. Many leaders make the mistake of thinking that getting involved with the day-to-day tasks is below them and essentially a waste of their time, but we disagree.
Getting involved is important for two reasons:
Firstly because it improves the morale of the team.
What is the point of being a leader if you don’t lead? Supporting the team with tasks, won’t just ensure that things run smoothly, but it’ll help your junior staff members learn more and develop faster. Good leaders want to make more leaders and being directly involved will support that.
Day-to-day tasks could include:
Processing invoices
Preparing and reconciling bank statements
Managing accounts receivables and payables
Monitoring the flow of funds
Reporting on financial performance
These are all tasks that as a finance leader, you would’ve done before to climb the ladder, which means you have extensive experience and knowledge to pass on to the rest of the team. By getting stuck in and being approachable, you show your team that you value them and you want to see them progress, leading to higher productivity and retention – something that directly reflects your success as a leader.
Secondly, participating in the transactional side gives you more context when taking on those bigger responsibilities, especially when it comes to decision-making around software, financial performance, or team productivity.
THEY HAVE A LONG-TERM FOCUS
One of the main responsibilities of a finance leader is to determine the long-term financial strategy of a business. Therefore, Finance Directors or CFOs must have a long-term vision and a plan as to how they can achieve it for the business to execute any plans needed to deal with upcoming events and shifts in the market.
The ability to forecast and plan accordingly is paramount and whilst there may be more short-term shifts necessary for the business, these things are simpler to solve and tend to not have as big consequences if they’re not solved. Finance leaders need to have the state of the company’s financial health at the front of their mind at all times which means going above and beyond to look ahead and be prepared.
THEY CAN TRANSLATE FINANCE JARGON INTO PLAIN LANGUAGE
There’s nothing worse than people having to sit in meetings with you whilst you talk about things they have little to no understanding of. Not only is it disengaging but it can also be misleading if you don’t just break it down to them.
This will help from an employee point of view when training and developing junior staff, but it’s also vital to adopt plain language when speaking to senior stakeholders or external investors.
You may think that using as much financial jargon as possible will show you as being reliable and clued up, but it can also lead to things being misunderstood. For instance, when you have to explain your company’s financial position, show them the stats of course, but ensure you explain it in a way that is engaging, simple and easy to digest, leaving room for them to ask questions for clarification.
This will enable these stakeholders to make crucial and relevant business decisions that will ensure the success and growth of the organisation.
THEY HAVE GREAT PEOPLE SKILLS
Finance is at the centre of every business and there are a lot of moving parts to a finance department, which means you need to be approachable and easy to communicate with.
A finance leader doesn’t just oversee and direct the operation but they need to be able to:
Jell the finance team together to optimise its function
Communicate well with other departments
Build rapport with chair members and stakeholders
A finance team is a complex machine, meaning the finance leader the golden oil.
The finance department can get a bad rep, sometimes unnecessarily, but sometimes for good reason and as a leader, you need to be aware of that and work to rebuild trust and set a good example to your staff.
This means having the ability to coordinate well and work closely with different department heads is essential to the operation and future success of a company.
THEY ARE BUSINESS AND COMMERCIALLY DRIVEN
When getting into finance, the idea of anything business, commercial, sales, or marketing-related wouldn’t really come to mind. What would come to mind however would be bookkeeping skills, your ability to use a spreadsheet, and maybe some strategy. But to become a leader, you have to use all those skills and apply them to business.
If you’re responsible for the financial health of a company, you have to be interested in the business partnerships, the investments, and the commercial decisions. This means having the business acumen to forecast and recognise constant changes in not just your company, but in the overall market and economy.
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