Are Next-Generation CFOs Expanding Their People Skills?

As businesses evolve, it has become clear that leaders that can develop and articulate high levels of emotional intelligence will have profitable businesses and loyal workforces.

What kind of CFO are you? A pretty open question I am sure you would agree, and one that gets a wide range of responses from many CFOs I speak to. Of course, having the financial management skills to steer their businesses to sustained profitability is essential, but I am also interested in how CFOs can develop other skills that directly impact their businesses and workforces.

Deloitte talks about the 'four faces of the CFO,' including the catalyst, steward, strategist, and operator. I would add a fifth face called communicator, as I believe all CFOs must rapidly develop their human skills, including becoming empathic leaders.

Becoming an empathic CFO is difficult. However, in last year's empathy in business survey from EY, 89% of employees agree that empathy leads to better leadership. In fact, 88% feel that empathetic leadership inspires positive change within the workplace, and 87% say it enables trust among employees and leaders. Additionally, 85% report that compassionate leadership in the workplace increases productivity among employees.

“As a result of the COVID-19 pandemic, leaders are working to establish business transformation models to adapt in the new normal,” said Steve Payne, EY Americas Vice Chair – Consulting. “Our research finds that empathy is not only a nice-to-have, but the glue and accelerant for business transformation in the next era of business. Empathy’s ability to create a culture of trust and innovation is unmatched, and this previously overlooked trait must be at the forefront of businesses across all industries.”

Empathy is empowering if these connections are genuine and part of an integrated approach to workforce support and development. But unfortunately, management has been a distant and disconnected part of many businesses in the past. As we move into the post-pandemic era, one of the critical lessons enterprises have learnt is to place customer experience (CX) front and centre of every business process and every customer touchpoint.

CX and EX (Employee Experience) connect closely together to create a deeper connection with teams, the customers they serve and the management team they report to.

Pip Russell, Strategy, innovation, and commercial operations vice-president, Schneider Electric, said it best: "We need people in our workplace who can connect with others, who display empathy and understanding, (and) who understand emotions. More than ever, emotional intelligence is not just a ‘nice to have’ but a core capability for the future.”

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The practical step all CFOs can take today to become more empathic leaders is to become more accessible to their workforces. Regular meetings with teams and individuals when needed create closer working relationships. Workers should feel confident that they can give feedback to their managers without fear of damaging their career progression. Create open discussion forums which include CFOs as this fosters trust and inclusivity.

“If you want to capture a culture of openness, leaders have to walk the talk and act as a role model,” says Jean-Michel Chopin, MD at StratX ExL. I think this should be the guiding principle for all CFOs who want to evolve into more empathic leaders.

CFOs are also now key strategists within their companies. They are now tasked with doing their part to create and maintain a healthy and productive workforce. Therefore, CFOs need to be great communicators able to understand business growth requirements and appreciate the challenges and anxieties of their workforces. This appreciation that business is not simply the drive to profitability at all costs, is critical for all CFOs to understand and develop as part of their business's organisational culture.

So, the CFO that will be pivotal in helping to guide their business to post-pandemic success is a CFO that builds strong relationships with their management team but widens their touch to become enterprise-wide. If you can recognise that emotional intelligence has value and develop these skills, genuine engagement will always result. This engagement translates directly to enhancing business success.

The value of emotional intelligence

CFOs are now the cornerstone of successful businesses, not just because of their financial acumen, but also their abilities to understand how wellbeing, work/life balance and trust are key skills they need to support the development of their enterprises.

EY’s Steve Payne says: "The ability to connect with employees and provide a supportive work environment is more important than ever. Organisations and leaders must prioritise empathy to foster innovation, inspire growth and successfully lead business transformation efforts."

Today's most successful CFOs lead with compassion. And I don't mean that compassion in any way means weaker leaders than CFOs who have traditionally taken a more distant approach to their management style. On the contrary, compassion can mean the exact opposite, in my view: that compassionate CFOs are open and cognizant of the issues facing their business and, vitally, their workforce.

This more open approach can deliver massive dividends of trust and a shift in worker behaviour that results in all-important loyalty – something that many businesses that lament the skills shortage and who have been victims of the 'great resignation' will welcome.