Talent management: make your own luck

What does it take for ambitious accountants to rise up the ranks and secure
themselves a top position in today’s business world? Hard graft, dedication or
talent? Well, our research at ACCA indicates that you’d do as well to cross your
fingers and hope for the best: nearly 70% of accountants believe that luck has a
large part to play in achieving a leadership position.

The research – the latest installment of ACCA’s Insights Series Paths to the
top, ‘Best practice leadership for finance professionals’ – indicates clearly
that organisations around the world are facing significant challenges in
developing and delivering effective leadership programmes, and most importantly,
in providing the leaders for tomorrow. Truth be told, it finds that many
organisations are failing to plan and deliver leadership development
effectively, if at all.

The bottom line is that organisations of all sizes need to be better at
talent management, leadership development and succession if they are to attract,
develop and retain the good people required to succeed in a complex and
competitive business environment.

For an empirically trained profession usually sceptical of a concept like
‘luck’ in the world of business, a surprisingly high proportion of accountants
believe their promotion is simply a case of being in the right place at the
right time.

The findings suggest that being identified for and enrolled into leadership
development programmes is less systematic than previously thought and, rather
alarmingly, it may mean that those with the greatest potential and most
deserving aren’t engaged in the process.

Timing is critical. The fact is that many accountants in top positions today
only receive leadership training once they’ve achieved the position. Not only
does this defeat the purpose of preparing an individual for the role, it is also
unlikely to be taken up, primarily because of diary pressures. The ideal is for
employers to identify talent shortly after staff qualify and then begin to
provide them with opportunities for the right experience and development five
years after qualification.

Lucky break

Fortunately the research shows that it’s not all bad news. Organisations tend
to offer a healthy range of development activities, but there are some highly
effective activities that are not being utilised as they should, for instance,
secondments (international or otherwise) and peer networking. These schemes
don’t cost much but are rated as highly effective. In contrast, use of internal
leadership courses, while expensive was seen as one of the least effective
development methods.

According to the research, senior executive coaching/mentoring came out as
the most effective, and one of the most used development methods. As one FD
interviewee put it: ‘A great manager trumps all… someone you really respect and
you’re going to learn a tonne from… beats location, industry and what kind of
job you’re doing day to day.’

For leadership roles, breadth of experience is vital. Finance roles across
financial analysis, management accountancy or risk management are key
development platforms and having experience of two or more of these areas offers
individuals a distinct career advantage. While these areas became less important
later on, they were seen as very important at the start of the career as they
provide technical proficiency, analytical skills and business understanding.
Other important areas are working internationally and gaining experience in two
or more organisations.

The research illustrates that setting up a leadership programme and securing
resources for it is an issue in many organisations. One big problem is one of
credibility and trust between the finance function and HR, and the fact that HR
has a poor reputation in many organisations in being able to lead and deliver.
The research also found that an unwillingness to invest in programmes, usually
due to a lack of top-level sponsorship, was another key factor holding back the
development of leadership programmes.

The inside track

Part of the problem is the disproportionate value that many companies place
on sourcing leadership talent from outside the business. Only a quarter of
organisations have a succession plan in place. So, not only are organisations
not making the right level of investments in people development, they are also
not giving insiders sufficient opportunity by giving equal preference to
outsiders. Interestingly, research by Booz Allen Hamilton found that outside
recruits tend to have a higher failure rate when compared to internally sourced
leaders.

The rising and widening expectations of key stakeholders – shareholders,
market analysts, clients and employees – are driving the rapidly evolving role
of the finance leader. As these stakeholder expectations continue to grow,
accountants need to become ‘über-leaders’ – people who can challenge the status
quo, be optimistic and positive and demonstrate a clear vision. Developing these
skills is not something that should be left to chance.

Urgent challenges for the finance leader are sustainability management and
building an ethical culture, while the top three challenges over the next five
years will be to deliver financial value, uphold regulatory requirements and
shape business strategy. And to deal with these challenges, respondents
identified four vital attributes and skills being necessary to thrive –
strategic business insight (97%); regulatory knowledge (91%); change management
(85%) and technical expertise (75%).

It is this understanding of stakeholders’ expectations and key challenges
that must drive leadership development. To this extent organisations should test
how relevant and appropriate their current programmes are. If programmes have
not been tailored for the finance community, this will blunt their
effectiveness. In short, there is much for organisations to do.

The finance leader’s toolkit

Today’s finance leader shares more attributes with their CEO than the members
of the finance team they manage. They are expected to produce change, align and
motivate people and create a culture of leadership.

However, unlike the CEO, it doesn’t end there. Finance leaders are expected
to have a higher involvement in accountability and control in ensuring that
regulatory requirements are upheld and in delivering financial value.

The finance leader and CEO roles are overlapping and complementing one
another meaning that finance leaders must be a sort of ‘CEO plus’.

They have to exhibit similar values as the CEO while ensuring the internal
and external credibility and sustainability of the business.

Tony Osude is head of learning and development at the
Association of Chartered Certified Accountants