By Guest Blogger Jack Park, CPA, MBA, CSP
Financial leadership is composed of two major components: accurate accounting and creating organizational value. Today’s successful financial leaders direct a department that accurately records and reports the financial status and results of the organization, and they help create organizational value.
There is a major difference between simply administering the accounting department and being a key member of the management team as a strategic business partner. Managing the accounting department is a cost, while financial leadership creates organizational value and is a profit producer. There are endless opportunities for financial professionals in 2016 to play major roles in transforming visions and strategies into successful and actionable programs at every level of an organization.
Financial leadership is influence. It is not a position on the organization chart; rather it is having the courage and spirit to move the organization to levels of higher achievement. Financial leadership is developed, not discovered. The effectiveness of a person’s work will be determined by his or her ability to lead and influence others.
The building blocks of exceptional financial leadership consist of eight essential core competencies and abilities. Three of the eight are:
- Continuously Develop Yourself
- Create and Understand Your Organization’s Culture
- Continuously Develop Your People
See all eight at www.picpa.org/cfo.
Core Competency: Continuously Develop Yourself
Self-development is a multifaceted process, not an event. It is an ongoing journey with no specific destination. Great leaders never stop expanding their knowledge, skills, and insight. The following five C’s describe the foundation and characteristics of self-development:
Character is defined by the way people live their lives and the choices they make – their moral fiber, disposition, and make-up. Actions are the real indicators of character. Most leaders will never rise above the level of their character. Dealing with adversity does not necessarily build character, but it definitely does reveal it. Integrity is being upright and honest in all endeavors. Trust is an unconditional belief in another individual, and trust is at the heart of all relationships.
Developing competence is a lifelong activity of learning, doing, and reflecting. Competence emerges through experience and the degree to which an individual learns and adapts. Successful leaders surround themselves with capable people, and always seek methods to improve themselves, their colleagues, and all aspects of their organizations. Competent leaders are active listeners, address every issue with an open mind, and continually look for ways to improve results.
Commitment begins in the heart and always precedes achievement. It begins with deciding what is worthwhile, and normally involves short-term sacrifices for the benefit of long-term gains. Commitment is leadership by example. It separates high-achievers from talkers and dreamers, and drives outstanding performance at all levels of an organization. Actions always speak louder than words.
Courage is taking steps into the unknown and frequently leaving comfortable settings. What is required to improve performance is frequently not easy or comfortable. Winston Churchill defined courage as the first of human qualities because it is the quality that guarantees all the others. Courage inspires confidence in others. Strong leaders practice “smart courage” rather than “knee-jerk reactions.” A leader’s power and influence will expand in relation to their “smart courage.”
Confidence is a belief. It is faith in abilities and capacities ― our own and those of others. Confidence is an emotional security. It stresses belief in oneself and others without any suggestion of conceit or arrogance.
Core Competency: Create and Understand Your Organization’s Culture
Culture is essentially “how we get things accomplished around here.” Leadership creates the culture of the organization, which then determines how people within the organization behave (get things done). That behavior determines the organization’s outcomes. Outcomes include how well the company’s products and services meet the needs of its customers and the organization’s level of financial success.
Culture is created by the combined values, practices, policies, and principles present within an organization. It is the driving force behind how and why people within an organization behave among themselves and with people outside the organization. Organizational culture is defined by all of the life experiences, education, strengths, weaknesses, and upbringing of the employees.
Core Competency: Continuously Develop Your People
In essence, this is the skill of delegation. Effective delegation is the assignment of authority and responsibility to another person to perform specific activities. The person delegating the activities remains fully accountable for the outcome. Consider the following when deciding what and when to delegate:
- Is this a task that should be delegated?
- Is there someone else who has the ability or potential to complete this work?
- Does this task provide an opportunity to develop another person’s skills and abilities?
- What is the person’s current workload?
- Is this a recurring task or a one-time project?
Action steps for effective delegation:
- Be crystal clear in your own mind about the activity to be accomplished.
- Clearly communicate all aspects of the task, especially the reason for the work (the why’s). Ask questions to ensure the other person fully understands the assignment.
- Agree upon milestone dates and a final completion date.
- In general, leave determining the method of completion to the person performing the task (the how-to’s).
- Be available for questions and follow-up as planned. Don’t be a micromanager.
- Provide feedback, offer appreciation and recognition, and avoid reverse-delegation.
Download these action steps at www.picpa.org/cfo.
Leaders first earn trust, then they establish a crystal-clear standard and prepare others for accomplishment. Commonplace leaders maintain the status quo, successful leaders have a plan, and superior leaders have a system.
Financial Leadership 2016 focuses on developing and refining financial leadership skills and abilities, followed by to best apply these leadership talents.
Jack Park, CPA, MBA, CSP, is a top-rated developer and presenter of financial seminars and workshops. In 1989, Park founded Financial Insights, a consulting and seminar development firm. Prior to that, he spent 22 years gaining experience in controllership and financial leadership at four major corporations in positions including CFO, vice president of finance, controllers, and manager of cost accounting. His consulting practice assists organizations with improving their profitability and financial reporting. Park has held adjunct faculty positions at five universities and is in the currently the leader-in-residence at Franklin University Leadership Center. Outside of his role as a teacher and consultant, he is a football radio commentator and analyst for the Ohio State Buckeyes football program and Sports Radio 97.1 The Fan and a best-selling author and columnist.