Insider Business Club: learning to lead

Do FDs need different skills if they want to become chief
executives?

Nick Eaves, executive director, Badenoch & Clark

There are other skills that are needed. The key thing to emphasise in the a
transition to leading a company rather than a department, is that the stakes are
much higher. So it’s much the same as running a department, but when you’re
running a company, the hiring decisions and decisions who to promote and who to
invest in, they’re going to have a significant impact on the direction of the
company. The ability to make the right decisions and the people you hire define
your career.

That’s never more true than when you are the leader of a company. So a lot of
this revolves around behaviours and competencies. Some finance professionals are
very adept at the use of competencies and behavioural development, but others
are not. And if there’s a gap in that understanding, that definitely needs to be
bridged for somebody to transition to the role of actually leading a business.

In terms of presenting skills in particular, one needs to invest in one’s own
development. And I think there’s an assumption that, because somebody’s paid a
lot of money or has an impressive job title, they automatically will have
certain skills, such as the ability to present. That’s not always the case and
people need to be humble enough to put the time and effort into developing
themselves.

Many people with training join a company and expect the company to train
them. That’s not the right approach. There’s a lot of research on this, but
there’s a current view I’m hearing regularly these days that about 70% of
development should be about your own self-development, 20% might be from your
direct boss and 10% might be from some central training function. In terms of
leadership and can it be taught, people talk about charisma, people talk about
charismatic leaderships – your Richard Branson-type leader. And some of it’s
quite intangible and very difficult to teach and develop. But you can learn
leadership, if you want to learn it hard enough.

They also need to be exceptional at picking the right deputies. And that’s a
real talent. They need to be an expert in delivering through others. At the risk
of using a sports analogy, Steve McClaren doesn’t have to be the best
footballer, but needs to put the right people in the right place. And I think
that’s really the key. For somebody to be an inspirational leader, they need to
know the areas they need to develop in. And humility is very important there. I
think, where I’ve seen it really work well, it’s been where a leader can create
an effective team. And effective teams are about encouraging open feedback. And
when you’ve got an environment where you encourage people to give you
developmental feedback, whether or not they’re your boss, that’s when there’s a
real opportunity to fast-track personal development.

Are soft skills more important than technical skills?

Eileen Arney, learning, training and development adviser, Chartered
Institute of Personnel and Development

If you’re going to lead a company, you need two quite distinct sets of
skills. One is the hard skills of understanding financial issues and so on, and
one is really about being able to read cultural issues and people issues and to
behave in ways that impact on your staff and your peers and your customers in
ways that are about the way you manage yourself.

If you’ve grown to be a chief finance officer in a medium or large company,
you really ought to have made the transition from being a technical specialist
to somebody who has those broader skills already. If not, I guess you’re going
to be in trouble in that role. But when you get into the hot seat of being chief
executive officer, those hard skills have to be assumed and those soft skills
are actually probably the ones that make the difference between success or
failure.

To be effective working as part of a board, you’ve got to be bringing a lot
more to it than technical skills. And if you’re not, your colleagues are going
to be having to cover for you. And if you’re running a department as an FD, your
staff need motivating and influencing and developing and supporting, just as
much as staff in other functions. So if you’re got an FD who doesn’t have those
skills, then either he or she has a really good deputy to compensate for that
lack of skills, or there’s going to be problems in the department.

Some of the skills that you need are easier for some people to pick up than
others but everybody can learn the sorts of skills they need to be effective in
leadership roles.

There’s no one set of skills that everybody has to have to be an effective
leader. But what you do need is the ability to be aware of where you’re strong
and where you’re weak and the ability to learn how to develop the skills you
need in the particular role that you’re in. So that means an openness to
learning how to do things differently than you need to.

If you’ve got to the stage of being FD, that isn’t the ideal time to start
learning leadership skills. One of the most effective ways of supporting
leadership skills and development, is actually through one-on-one coaching
programmes, for example, although you can supplement those with intensive
leadership development programmes, for example.

No CEO is going to score on every single competence that it would be
desirable for a leader to have. So the single most important thing a leader can
have is self-awareness: awareness of where he or she is strong and awareness of
where he or she needs to find ways of compensating for the skills that aren’t
there.

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