Written by: Raj Gandhi
Several years ago, I took the decision to study finance directors who I thought embodied the concept of ‘fully rounded leaders’. Watching and listening to them I began to appreciate certain qualities and character traits which have been hugely helpful to me in my career, both then and since.
First, knowing the numbers is a given. If you don’t then no one else will. But leadership extends way beyond this into deep commercial knowledge, independent judgement, the ability to challenge constructively and adopt a collaborative style.
Listening and communicating confidently with clarity and contributing strategically to board is key. By watching others who had grasped this fully, I learned to embrace accountability and trust my instincts.
One CEO managed to mix tact, diplomacy and respect with a sharp questioning mind. He also had a complete understanding of the relationships between revenue, profit and cash and confidently held centre stage when appropriate. Not only that, but he kept a watchful eye on competitors’ performances and on strategic imperatives, adjusting what we did accordingly. Now that’s a well-rounded leader!
Presence in the boardroom is a different matter; it’s a combination of style and behaviours. How you present yourself, attitudes, the ability to connect and the respect you command are all relevant. A smart appearance still seems to equate to a smart mind.
If you want to become more strategic and influential, demonstrating both commercial acumen and leadership then here are some of my favourite tips for sound leadership:
- Influence: the best FDs practice techniques to become influential and (importantly) understand the decision preferences of their fellow directors
- Board engagement: connect with your non-financial directors and link this with a deep understanding of your business model
- Emerging risks: look-out for any blind spots, threats and opportunities and take great interest in contingency planning and embedding risk frameworks
- Talent management: surround yourself with good people so you can delegate with confidence, freeing up time for strategic matters
Here are some common challenges:
- Strategic Layers: connect the different layers of strategy (corporate, business and operational) and proactively engage in the entire strategic process. To be honest, I have come across many FDs who have never even developed a fit-for-purpose financial strategy….
- Management Reporting: you need to present intelligent information to your boards (succinct and forward-looking with trends and decision choices) and to benchmark these reports against your competition and strategic aspirations. Surprisingly, rolling forecast are not widely used; a vital discipline particularly in uncertain times
- Corporate Governance: this is more than simply sound processes. You need to understand it in terms of proper decision-making behaviours such as avoiding group-think.
In summary while most FDs are certainly up for the challenges and opportunities, it can require a gear shift to be regarded as fully fledged leaders.
Raj Gandhi is an IoD course leader for ‘The Role of the Finance Director‘ and founder and Chief Executive of GGV London. Prior to GGV, Raj was chief financial officer of London Capital Group, global treasury audit manager & business analyst for the Royal Dutch Shell, and treasurer of Empire Stores Group plc.