Developing emotional intelligence
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 organisation’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. EI 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,” Robbins 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 behaviour, 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.
This means being aware that emotions can drive our behaviour 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 EI 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 take an open mind and concerted effort.
Here are six ways for CFOs to implement EI:
Build on the basics. Implementing EI into 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 EI 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.