In their book, The Leadership Lab, PR guru Chris Lewis and leading economic policy analyst Dr Pippa Malmgren, analyse the modern challenge of leadership. Amongst the many conclusions they reach, perhaps the most striking is the requirement for a change in the culture of leadership. Described in a talk they gave at the RSA in 2018, the theory is that we have reached the limits of what traditional leadership can achieve, and in this age of high frequency change, we need a new approach.
Lewis and Malmgren’s prescription is for leaders who listen. While the traditional idea of a successful leader in business is of someone who sets a direction and pursues it relentlessly, this is no longer a recipe for success. Rather, we need leaders who accept that they don’t always have the answers. They ask questions rather than barking instructions, accepting other people’s input on the right direction for the organisation, knowing that the right strategy for sustained success might change rapidly.
For the leader in finance, this shift in direction creates new challenges. The priority under leadership like this is not for a finance function that balances books, validates strategy, and ensures compliance. It is for one that can answer the questions that come from other leaders, using solid data and trusted methods. Perhaps the ideal is for a finance function that creates its own questions, challenging leaders on strategy, and helping them to refine the company’s direction?
This may seem like a big stretch today, when many finance teams barely have the resource to deliver budgets and close the books without extensive overtime. But if the culture of leadership is changing then finance teams will have to adapt or maybe even lead this change.
There are technological components to the solution: the tools of analysis obviously, and before that, automated systems to offset the increased workload. But really this is a question of skills and will. Is the political will there to drive change in the organisation, and lobby for the resource it will require? And does the finance function have the skills to deliver answers to business questions? This requires a combination of technical skills – FP&A – but also softer skills like communication, to help understand and interpret questions, and sell back the results in a narrative form.
Right now, these skills are in short supply in finance. Junior candidates who can blend these technical and communication skills are being attracted into other disciplines with stronger technology adoption and clearer paths for career advancement. And those already in our finance teams who have them are often buried under a workload of manual tasks where they can’t add value.
This isn’t true in every organisation. In my work, I get to meet finance leaders who are already part of a more collaborative approach leadership, and who have built up the skills of planning, analysis and communication in their own teams. In workshops at last year’s Prophix User Conference we found them sharing their stories with their peers, encouraging others to follow their path. I hope to meet more at this year’s conference in Nashville.
But while these stories represent the minority of businesses, I will continue pushing for change in the finance function. And I’ll try to keep listening.