In this first part of the finance excellence series, Denny Taylor explains why finance executives must master both a business leadership and executive influence role to be successful.
By Denny Taylor
Editor’s Note: In this article, the first in a series of four, we will explore the concept of Lateral Leadership. Subsequent entries will appear each month on the Foresight blog where we invite your commentary.
The pillars of Lateral leadership involve acting like a business leader while applying the skills of an executive influencer. This means approaching your role as a businessperson first and a finance person second regardless of your functional specialty. Doing so requires a degree of knowledge peripheral to your domain and the boldness to share your views on general business matters. If you can secure a level of commercial credibility with the line, it will broaden your potential for having a strategic impact on commercial decision-making above and beyond your day job.
From a knowledge perspective, it is important to build a comfort level and a clear understanding of the organization’s finances and key commercial drivers underpinning business performance. This includes a level of insight into the company’s broader customer, competitor and regulatory environment.
Another feature of top performing finance professionals is the discipline to hold the tension between immediate, short-term demands with longer-term, forward looking objectives be they corporate, compliance or customer-related. Building this muscle enables an appropriate mix of informed, yet realistic risk management with an appetite for calculated risk taking and growth. Those who are most successful are able to get outside of their functional, role-driven biases and show sensitivity to the issues and needs of their market-facing colleagues outside of the corporate center.
In addition to having an overarching commercial outlook, the second element of lateral leadership relates to the ability to scale one’s influence. For many finance professionals, the concept of influence is a question of applying their expertise in certain narrowly defined situations, e.g. closing the books on the fiscal year, creating a financial forecast, etc. However, strategic influence goes beyond displays of technical knowledge. Yes, building credibility through your contribution is extremely important, but so is the ability to communicate in a way that transcends a particular situation or audience. Acquiring knowledge and learning techniques to enhance your presentation skills are common practice.
More difficult to master is interpersonal savvy. A finance leader’s most effective method for gaining commitment is their relationship power. Often, finance directors are too reliant on adding value as an expert and provider of knowledge. While educating others on finance matters is helpful, do not underestimate the boost to your impact from developing a cadre of strong personal relationships. The ability to engage people through their emotional energy and values rather than logic, intellect, or business reasoning alone will enhance your influence. The investment you get from widening your network and establishing alliances with a variety of senior leaders outside your immediate functional chain of command will pay dividends in terms of the strategic leverage and organizational intelligence you gain.
The final element you need as an executive influencer relates to the ability to challenge openly and productively. Working in the finance sector requires a clear, consistent and active display of values and ethics. Steadiness and determination lead to trust, but you also need a knack for questioning people and handling confrontation with integrity. There is a fine line between acting in a policing role (finance leaders get a bad rap sometimes for being characterized as ‘Dr. No’) versus asking tough questions to get the business to think differently about its decisions.
While we will speak to being a Champion of Rigor in a forthcoming post, having poise when holding an opposing or contrary view is a requisite for operating as an equal partner and emblem of effective Lateral Leadership.
Dennis “Denny” Taylor is a certified coach and holds an MA in Organizational Psychology from Columbia University and a BA from Middlebury College. He is a Managing Consultant at YSC Ltd., a global boutique, where he has spent the last seven years working to unleash the power of senior executives. Prior to his 14 years of consulting, he worked in corporate HR, training and design roles in the finance and publishing sectors.
Latest posts by Denny Taylor (see all)
- Financial Excellence Model: External Advocate, Part 4 - April 28, 2015
- Finance Excellence Model: Champion of Rigor, Part 3 - January 26, 2015
- Finance Excellence Model: Strategic Function Builder, Part 2 - November 25, 2014