Guiding principle 2: Learn to behave like a leader

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There was once a view that leaders are born with an innate capacity to lead. But recent thinking suggest that great leaders are more often those that practice leadership behaviors, and that these behaviors can be taught, learned and cultivated. In a time of uncertainty, volatility and rapid change, leadership becomes increasingly important in providing vision, direction and inspiration for the finance function.

In our research, “leadership and team-building” emerged as the No. 1 priority in equipping future finance leaders to transition to the CFO role, exceeding other areas, such as “a breadth of core finance skills, from control to tax and audit” (see Chart 2).


Chart 2: Leadership and team-building to the fore

EY - Chart 2: Leadership and team-building to the fore EY - Chart 2: Leadership and team-building to the fore

But while leadership is arguably more important in today’s rapidly changing and globalized world to facilitate the smooth functioning of the team, it also presents significant challenges.

For Claude Changarnier, Vice President of International Finance, Microsoft International, the key to good leadership is knowing the people you lead, despite the geographical challenges of managing an international team of more than 700 finance professionals scattered all around the world. “Microsoft is a people company,” he explains. “Yes, we sell products, but we are a people company, and what I’ve always wanted to do in the finance organization is to be a people organization. My job is to know our people. I travel 130 days a year.  I spend most of my time visiting subsidiaries and assessing people. I want to assess the good, the bad, the very bad and the very good. I also want our people to know me. I want to have an opportunity to share my vision.”

  • Balancing the left brain and the right brain

    Strong leadership is a rare commodity in finance, and at a premium. Finance roles have traditionally favored the left brain. Logic, analysis and facts are central to the rigorous, analytical nature that organizations expect of their CFOs. However, much of this knowledge is becoming increasingly commoditized as it is codified and available online. Finance leaders will increasingly be characterized by more right brain attributes – such as empathy, innovation and imagination – that will help them inspire and generate loyalty.

    “You have to be seen as more than just the numbers person — someone who is able to take risks and inspire an organization. Being an inspirational leader is not often a skill required of the CFO. You are the solid, ‘responsible’ person, and so that's where perhaps the biggest challenge of being an effective CFO is. As the CFO you are required to be a visionary, inspirational leader. But those are skills that CFOs aren't often called on to build.”

    Deborah Gibbins, CFO, Mary Kay

    As organizations become flatter, and remote working and virtual teams become more common, close supervision and micromanagement will no longer be effective. Emotional intelligence, cultural agility and the ability to build trust across boundaries become the foundations for how people and teams operate effectively. Communication styles will also need to change to become highly adaptative. Digital channels and formats – from tweets to blogs and beyond – will be important elements of the CFO’s communication toolkit to reach internal and external stakeholders effectively.

  • Viewing performance through the lens of purpose

    There is a growing body of evidence that purpose-led organizations outperform their peers against a range of different criteria, including talent management and financial performance. Organizations that pursue a stated aspirational goal that is broader than financial performance, and use that purpose to guide decision-making, are able to attract and retain more self-motivated employees, who will invest themselves more deeply in pursuit of the organization’s purpose.

    Measuring performance against purpose is essential for organizations to demonstrate to internal and external stakeholders the impact of their purpose. Some CFOs have already begun implementing integrated performance measurement including a broad range of measures (see “Finance leadership at adidas Group: moving to integrated performance management”). For future finance leaders, this is likely to be an increasingly common element of the CFO role.

    Finance leadership at adidas Group: moving to integrated performance management

    For Robin Stalker, CFO of adidas Group, CFOs should take a role in creating a holistic view of company performance, and in measuring against it.

    “We have an initiative called ‘integrated performance management’ that is really just recognizing that performance cannot just be measured by whether we made money or not,” he explains. “We might make money today, but ultimately our goal as an organization is to be sustainably successful. Sustainability is not just to do with environmental impacts, but sustainability in the sense that the business model thrives and becomes more beneficial and profitable to stakeholders over time.”

    This vision of the company’s ultimate goal then provides the framework for driving enterprise decision-making, looking beyond tangible financial measures.

    “When we make decisions, we can’t just consider one particular factor,” Stalker explains. “Good decisions take into account many factors, and they are not limited to financial measures. These factors might be tangible, but they may also be intangible. How do I value employee engagement? How do I value the consumer response to our initiatives or engagement with the brand? How do I value the quasi-governmental or other bodies who have an interest in our regulatory compliance, or others who might have an interest in our environmental footprint?

    “These are all factors that are important to certain stakeholders who will be responsible for judging whether our company is successful. The big challenge therefore becomes how we get all the information that helps our decision-makers make the big decisions in view of all these tangible and non-tangible interests.”

  • Building leadership strength through diversity and inclusiveness

    A finance function culture that embraces and leverages diversity and drives inclusiveness can realize significant performance benefits and help tackle key issues facing the finance function. For example, our research shows that finance leaders are committed to driving finance diversity to resolve talent gaps. Sixty-six percent of finance leader respondents worldwide said that “organizations will need to recruit from diverse pools of talent to find the next generation of finance leaders.” It is a particular focus for finance leaders at large companies, as well as for younger CFOs (see Chart 3).

    Chart 3: Diversity and inclusiveness on the agenda

    EY - Chart 3:  Diversity and inclusiveness on the agenda EY - Chart 3:  Diversity and inclusiveness on the agenda

    This finding reflects the fact that organizations are increasingly recognizing that diversity is key to high performance. For example, EY global research report into gender diversity – “Women. Fast forward: the time for gender parity is now” – outlined the positive impact of women’s advancement. The performance advantage included a positive correlation between GDP per capita and gender equality, and how a better gender balance on boards correlates to a better share price and financial performance.

    Addressing conscious and unconscious biases

    At the core of helping to meet the diversity challenge for aspiring finance leaders will be acknowledging and overcoming conscious and unconscious biases. For example, in the area of gender diversity, of our sample of 769 finance leaders from organizations with revenue greater than US$100m, only 117 were women, and 652 were men. And yet, only 57% of women finance leaders and 49% of male finance leaders we surveyed believe that “not enough female future finance leaders are emerging.” This points to an unconscious bias for both men and women, both of whom seemingly underestimate the obstacles to finance senior leadership for women, albeit slightly less for women.

    Increasing awareness

    To start addressing their own and others’ biases, finance leaders can:

    • Take care  the “tone from the top” is right, by first understanding your own biases and developing strategies to manage them.
    • Implement targeted interventions, such as training. Over half of finance leaders (52%) believe “training for all staff, including leaders, to address conscious and unconscious bias issues” is important to increase appointments of female CFOs.

    Deborah Gibbins, CFO of Mary Kay, who describes herself as “very optimistic” about female leadership diversity, believes that flexible HR policies are critical.

    “I'm very optimistic,” she says. “Obviously, I have made it as a female CFO and in our organization we are very balanced regarding men versus women in leadership positions in finance. I think Sheryl Sandberg probably hit the nail on the head by saying the biggest challenge will be getting younger women not to drop out. I think HR has to work with the businesses to decide ‘when can we flex?’ How can we do that in a way that's fair – so that people don't feel like someone has been treated unfairly or be given favorable treatment? That it's available broadly across an organization in a way that makes sense.”

    As Chart 4 shows, in addition to the right HR policies, finance leaders believe that role modeling and effective communication are keenly important approaches in increasing the number of female CFO appointments.

    Chart 4: Fast forwarding female finance leaders

    EY - Chart 4: Fast forwarding female finance leaders EY - Chart 4: Fast forwarding female finance leaders
  • Creating your leadership action plan

    As they look to tackle these complex issues, aspiring finance leaders need to think holistically about the leadership skills and behaviors they need to mobilize and inspire diverse teams, and how to secure those skills. A program of personal leadership development must include a range of initiatives, including experiential learning, personal coaching from a mentor and academic study that draws on a wide curriculum, including psychology, history and philosophy. Aspiring finance leaders need to imagine what sort of inclusive, globally agile leader they want to be, and use that as an aspirational model to take steps to shape their development activities.

    For Kelly Wong, CFO, KIDO Group, finance leaders need to overcome any reservations they have about using a mentor. “There's something about our discipline that no one tends to come up and say, ‘I want to learn from you,’” he says. “Maybe it's an ego thing? But I think getting a good mentor is important because it is such a broad discipline. It means that you have someone to guide you as to what's important today or tomorrow and how to build that skill set.”

    “I still have a coach who is the global CFO of my previous company. We have quarterly calls and meet once a year. Coaches can give you a different way of thinking. They are not telling you what to do, but they can change the way you are thinking about doing business.”

    Chris Chen, COO & CFO, DDB Greater China

    Today’s CFOs looking to develop the strengths of their finance talent bench can help aspiring finance leaders build their leadership skills by considering the following:

    • Assess the development programs open to your finance teams. Learning programs should reflect the breadth of skills future finance leaders will need, and should include a balance of technical skills development (such as large-scale project management) with softer skills (such as inspiring and leading diverse teams, addressing conscious and unconscious biases, and fully using different skills, experiences and perspectives on teams to generate ideas relevant to your team members’ evolving needs).
    • Create varied experiential learning opportunities. Skills such as motivating teams have to be honed not only in theory, but also in practice. Academic training should be complemented by opportunities for emerging leaders to put into practice their leadership skills and to learn from their mistakes and experiences.
    • Make feedback loops part of your function’s modus operandi. Regular feedback from direct reports, peers, internal clients and superiors all help build self-awareness, which underpins strong leadership behaviors and solidifies positive decisions. CFOs have an opportunity to embed authentic feedback as a feature of the culture and processes of the finance function, rather than relying on formal HR processes or biannual reviews.
    • Facilitate and support mentoring relationships for finance professionals. Mentoring relationships can be invaluable in helping finance executives to enhance self-awareness, build relationships and think strategically about their careers – often for both the mentor and mentored. CFOs can consider creating formal or informal mentoring programs within finance, or simply encourage this behavior as a way of advancing skills and opening communication.
    • Begin leadership development early. Finance leadership development has historically tended to focus on a small number of high-potential finance executives who have achieved a degree of seniority before they are considered ready for development programs that are often major investments of time and money. However, leadership skills should no longer be considered the realm of a special few. Leadership development should be accessible to all in the finance function, not just those already identified as on track to be senior executives.

    Why leadership development should not be the privilege of a special few

    • Inspirational leadership is not just required at the senior executive level, but across the finance function, particularly as business partnering becomes the main focus of finance activities.
    • The level of change the function faces requires people at all levels of the organization to lead change associated with new technologies, new business models and ongoing economic volatility.
    • The earlier you start, the more you’ll learn.


  • Hanne Jesca Bax
    EY EMEIA Managing Partner Markets & Accounts, Ernst & Young Nederland LLP
    Tel: +31 88 40 71325
  • Robert Brand
    EY Global CFO Agenda Leader
    Tel: +1 201 872 5692
  • Rick Fezell
    EY Americas EY Vice Chair — Accounts
    Tel: +1 312 879 6568
  • Annette Kimmitt
    EY Asia-Pacific Accounts Leader
    Tel: +61 3 9288 8141
  • Tony Klimas
    EY Global Finance Performance Improvement
    Advisory Leader
    Tel: +1 212 773 5949