As the CFO role has expanded, so, too, has the value of a top-notch finance chief. Today’s CFOs have more oversight and responsibility – and a role in setting an organization’s strategy. To keep up with the rapid evolution, CFOs must ensure that they’re developing emotional intelligence (EI).
The term EI has grown in popular culture and, more recently, spread into the workplace. Emotional intelligence is defined by Steve Robbins, an author and speaker, as “a toolbox of competencies that contribute to the successful achievement of goals in an emotional context.”
Robbins, who has a Ph.D. in communication science and regularly presents to corporate clients, calls that description the professor version. “The lay version is the ability to read, manage, and leverage emotions to achieve goals,” he said.
Managing emotions in a pragmatic way is a vital leadership skill. “To get in touch with our own emotions and understand what’s driving our behavior, that’s important to be effective leaders, to be effective at influencing others,” said Dan Griffiths, CPA, CGMA, director of strategy and leadership at Tanner LLC in Salt Lake City in the US.
This means being aware that emotions can drive our behavior and influence people positively and negatively, and then understanding how to manage the emotions of ourselves and others, especially when we are under pressure.
For some CFOs, having strong emotional intelligence may come naturally, but for others it’s something that will need practice. Whether EI comes naturally or not, possessing the associated skills may not be enough to apply them to your workstyle. It will also take an open mind and concerted effort.
Here are six ways for CFOs to implement emotional intelligence
Build on the basics
Deploying emotional intelligence in the workplace is not a substitute for the continuation of traditional skillsets obtained through education, finance, and accounting experience. A CFO’s role will always have a focus on numbers.
However, for any successful business, the key is a good marriage of resource allocation and competing resources. CFOs need to fully understand the business in order to properly allocate corporate resources. For this to happen, CFOs must step out of their traditional comfort zone and become much more outgoing, able to relate to people, and able to see the big picture and beyond.
They need to speak to their counterparts in person and use their emotional intelligence skills to find out where resources are truly needed. They cannot just focus on reporting numbers and allocating funds instinctively.
Have a strong rapport with your advisers
A CFO should have a solid team of top advisers and be in regular communication with them – and not just to talk numbers. These relationships should be mutually beneficial, so take full advantage of each other’s knowledge and expertise.
A business is a puzzle with many pieces that must fit together. Having a strong relationship with your team is critical. Don’t try to solve the puzzle alone.
Ask non-finance questions
Ask questions to get to the numbers’ root causes. Get information from the sales team, IT, the president, CEO, and the customers. All of this knowledge should be compiled by CFOs leading and participating in more strategy meetings about the budget and other financial numbers.
These strategic meetings are when the non-finance questions are asked: “What are we going to spend?” “Why are we going to spend it?” “What return on investment will we earn that’s more than monetary?”
When a CFO participates company-wide at a strategic level, he or she will be able to give input on things such as a sales process to make customer experience better, which adds recurring value, and ultimately enhances a long-lasting relationship between the company and its customers.
Having a variety of skillsets and personalities is healthy for a company. Change things up. Spreading out and sharing more information throughout the company, rather than departments operating in silos, creates more opportunity for change and opportunity.
It’s common for the sales team and operations team or sales team and finance team to bump heads. CFOs should lead by example and show others how to embrace their differences. Use your professional diversity by being friendly and open to new ideas.
Shake up the internal reporting tree
Today’s evolving CFO needs to be part of the whole ecosystem and have a finger on the pulse of the entire organization and all its departments, as well as the ownership of the company – be it a board, an individual, or stakeholders.
A shake-up of an internal reporting tree will help a CFO better understand people with different thought processes. When you manage a team of people, you have to be able to understand what makes them tick, if and how they’re growth-oriented, and how to challenge all different levels of employees to help them grow.
Attributes associated with EI are needed to do so. These kinds of changes lend to the holistic approach that is needed to obtain the solid understanding of each team and department. With this holistic approach will come improved customer engagement and satisfaction.
Be a master of communication
CFOs must be strong and comfortable communicators, both verbal and written, to internal and external groups. High-level points must be made understandable to all parties.
Be honest and accurate with the facts but include the stories you’ve learned behind the numbers to bring them to life and make them relatable.
A CFO can be a strong brand ambassador. Know the company’s elevator pitch. Be able to explain why customers should do business with your company, and be a true leader.
Tell the story the way it’s supposed to be told – honestly, with encouragement and no embellishments.