Given today’s fast-paced economy, proper financial leadership is becoming extremely valuable for the longevity and success of a business. The changes are rapid, and companies are turning into more complex entities. Many CFOs (Chief Financial Officers) find themselves in a more unfamiliar situation. To keep up with the changes, today’s financial leaders should be more effective at taking financial risks to achieve long-term sustainable growth.
Here are five tips for showing financial leadership.
1.Translate Accounting and Finance Jargon
Given the ever-changing landscape in financial accounting, management reporting, and regulatory frameworks, it’s the finance leader’s responsibility to assess and manage the processes of changes, new regulations, and standards. Then they should explain these processes to others, as it’s essential for establishing an effective team.
There are certain aspects in which decrypting the requirements to ensure clarity for the board is essential for establishing an understanding of the impact, encouraging decision-making, and achieving commitment for projects and changing initiatives deployed in response to the requirements in accounting and finance. As a modern finance leader, you must effectively communicate with stakeholders and convert finance jargon into a language easy for everyone to understand while presenting concepts and ideas that the audience can easily comprehend.
Finance leaders who communicate well will more likely motivate team members and gain their trust. Effective communication is like an old song played repeatedly, yet it remains a cornerstone for successful leaders.
2. Be Transparent
Finance leaders must share financial data with internal stakeholders once they get a hold of the latest company figures. Aside from providing information related to the income statement, finance leaders should give information about the inventory and how much money goes to receivables. They must also provide details regarding the current debt load.
Financial data must be presented in contrast to the prior periods to identify trends. Sharing metrics that can foster company growth and increase profit can help encourage stakeholders to invest more and improve company performance. If the company is financially sound, leaders should invest more in its employees through expanded benefits, bonuses, office amenities, personal development, and more.
Financial transparency is essential for various reasons. If left without explanations, people would assume things. And in most cases, these assumptions are way off-base. When employers compete for the best talents, it’s essential to be transparent about expenses, pay, and other non-financial business perks. If finance leaders communicate the company’s financial performance well and educate employees on why this matters, employees will perform better and have a vested interest in the company’s success. Transparency also helps tamp down gossip, encouraging people to focus on facts while giving staff a sense of ownership and engagement.
3. Develop Leadership Skills
The responsibilities and pressures of finance have significantly increased over recent years, along with the varied roles available in the sector. Data analysts, scientists, internal auditors, and financial controllers are some of the “newer” positions in today’s complicated world of finance. It requires a skilled leader to coordinate and orchestrate these different roles, allowing them to harmonise and produce workflows of better value, both efficiently and effectively. There are several great bespoke training courses available which will help financial leaders tailor their training to meet their needs.
Finance leaders should find ways to develop their leadership skills. CFOs should possess the leadership required to establish a complex team that can meet the various financial needs of the wider business and has enough room to grow and respond to change. The best way to do this is through leadership training.
Leadership training helps CFOs in implementing the most suitable leadership style in the world of finance. There are various leadership styles, and each has unique advantages and disadvantages. Leadership training can help finance leaders identify the leadership style that best suits them and ensures they leave a positive impact on others. Leaders should find ways to motivate the team and inspire sustained improvement and growth. If the workplace culture encourages motivation, the finance function can serve as an inspiration to the organisation and influence a culture of resilience and innovation.
4. Motivate Employees
A growing business provides employees opportunities to make an impact and leave their mark on it. Employees will always want to have a role in the company. They want to have achievable goals and purpose. Therefore, you must make clear the ethos behind your company and its strategic goals and objectives. In this case, maintaining clear and consistent communication is essential. Excellent communication will result in more engaged employees, encouraging them to be more productive and remain loyal to the company’s vision.
Another way to motivate employees is by encouraging air of professionalism. Professionalism and proper interpersonal behaviour nurture pride and develop team loyalty. While demonstrating professionalism, motivate employees to achieve their level of skills. Finance leaders must remember that preparation is better than perfection and being prepared will lead to more success in the workplace.
5. Tackle Problems Immediately
Finance leaders should deal with problems the moment they arise and ensure the entire team is on board and aware of the issues. In any business, dealing with financial problems can be very stressful, but there’s always help and advice to help you address them before it becomes too much to handle. There are also steps that finance leaders can take to minimise the impact of these issues, such as resolving priority debts first and finding ways to improve cash flow management.
One of the most common worries of CFOs is meeting deadlines. Without the right resources, finance leaders could miss critical deadlines because of poor workflow visibility. For instance, finance leaders must pass audits regularly and document compliance requirements. Without the right tools, a finance leader’s ability to push for accountability is narrow.
Poor practices in project management are also stressing out many of today’s CFOs. For example, when the finance team is required to present accurate data in real time, yet the numbers are delayed or inaccurate, the finance team has to spend a significant amount of time correcting inconsistencies.
Thus, to lessen the burden on financial leaders, they must immediately look for the right technology that will allow them to access information in a centralised hub. An automated solution can benefit a finance leader and help drive business initiatives.
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