How Can Companies Foster Leadership in Their Finance Teams?

Fostering leadership within finance teams is crucial for organisational success.

Finance professionals are increasingly expected to provide strategic insights and drive business decisions.

Many companies are recognizing the need to develop leadership capabilities across their finance functions. 

A survey by recruitment firm Robert Half found that 82% of CFOs believe leadership skills are more important for finance professionals now than they were five years ago.

Developing these skills requires a multifaceted approach. Finance leaders must create an environment that encourages growth, provides opportunities for development and rewards initiative. 

They must also lead by example, demonstrating the qualities they wish to see in their teams.

Communication is key to fostering leadership. Finance teams need to be able to articulate complex financial concepts to non-finance stakeholders; this requires not just technical knowledge, but also the ability to translate data into actionable insights.

Emma Seymour, CFO at shift-work management platform Deputy, emphasises the importance of investing in personal and professional growth. 

She says: "Investing in your team's personal and professional growth through formal training and career development opportunities shows that you're committed to their future and drives loyalty and motivation".

Transformational leadership tips for financial directors

Transformational leadership is an approach that can be particularly effective in developing finance teams. 

This style of leadership focuses on inspiring and motivating team members to exceed their own expectations and achieve extraordinary outcomes.

Financial Directors can apply transformational leadership principles by fostering a culture of innovation and continuous improvement. 

This involves not only managing financial performance but also leading with a strategic vision that aligns with the broader goals of the organisation.

Alex Wyatt, head of finance at digital bank Zopa, stresses the importance of open communication and support. 

"Be interested and available for questions or ideas," he says, adding: "Ensure you provide opportunities to ask for clarification and direction along the way – especially with a junior team who may need more direction than an experienced team.”

Intellectual stimulation is another key aspect of transformational leadership. 

Finance Directors should encourage creativity and innovation by challenging the status quo and promoting critical thinking; this can lead to improved financial strategies and more efficient processes.

Developing critical traits in finance leaders

Research by Wharton Business Consulting and AICPA & CIMA identified four critical traits that successful finance leaders need to influence the future. 

These are: connected influencer (actively listens and gathers insight), authentic disruptor (questions existing ways of working), inquisitive storyteller (tells the real stories behind the data) and rational value creator (reads into the numbers into the value for stakeholders).

Liz Hirst, senior director at Wharton Business Consulting, explains that these traits are linked by a shared element: purpose. 

She says: "Leaders should help their teams understand the purpose of the organisation, the finance function's role in driving that organisational purpose, and critically, each person's individual purpose and how that connects and intersects with the others."

Developing these traits requires a focus on both technical and soft skills. 

Finance leaders need to provide clarity to their teams on the wider capabilities and mindset shifts that are critical for taking on a strategic finance role.

One way to develop these traits is through reverse mentorship programs. 

Fostering leadership within finance teams is an ongoing process that requires commitment from both leaders and team members. 

Through creating a supportive environment, providing opportunities for growth and focusing on developing critical leadership traits, companies can build strong, capable finance teams ready to meet the challenges of today's business landscape.