PracticeAccounting FirmsTaking the lead

Taking the lead

A key difference between a leader and a manager is that leaders bring about transformational change, while managers manage the status quo

Transformational leaders, who have the ability to inspire confidence in the
people needed to attain organisational goals, are needed at every level within
finance.

Every organisation is different, but most share the need for transformational
change.

Just recently, I was leading a discussion on leadership with a group of
finance directors when one explained that his key objective was to ensure his
accountants knew exactly what each balance sheet account represented. Knowing
the movement wasn’t enough, it was the balance that was important.

What the finance director needed to do was transform the culture within his
finance department, so that his staff recognised that accounts are records of
things in the real world, and not just numbers. This was a dramatic
transformation by anyone’s standards, and will have beneficial repercussions
within his organisation in many other areas.

Another finance director was showing me around his company and explaining the
changes he’d made since joining in the middle of a financial crisis 18 months
earlier.

Not only had he spearheaded a massive rationalisation to avert the crisis,
but he was also taking steps to ensure that business managers had all the
information they needed to make better business decisions.

Every line in the accounts, budget and actual, was broken down and analysed
over the customer base. That way the organisation could know exactly which
customers were profitable and which weren’t, and could take steps, either on
volume or on costs, to improve returns.

The key to all these transformations is that they are firmly rooted in
organisational reality. They will all lead to improved understanding and
performance.

It’s imperative to inspire those delivering the transformation. A successful
leader also needs to know when to stop leading and start managing – set
directions and create a future for the organisation, but always remember that
you need to manage the delivery as well.

Pat Scott is partner and executive coach of Woodbridge Partners

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