Finance leaders acknowledge emotional intelligence (EQ) as a vital skill in the evolving role of CFO. Here are 8 ways to build it, drive strategy, and foster relationships from our executive recruiting and finance experts.
In the high-stakes world of finance, you would expect a CFO toolbox to be filled with skills like strategic planning, risk management, and financial reporting. But shockingly, there is another crucial skill that gets less time in the limelight. We recently surveyed CFOs asking what skills they felt were vital in their current roles, and it revealed a surprising answer – emotional intelligence (EQ).
EQ might not be the first thing that comes to mind when you think about CFO (Chief Financial Officer) competencies, but as our respondents pointed out, it is critical for success in their roles.
How the CFO Role has Evolved
In a recent article on CFO.com, John Touey, Principal of Salveson Stetson Group, discussed that in the last two decades, the CFO role has transformed. No longer just number crunchers, CFOs now wear multiple hats – strategist, operator, and even mentor. More increasingly, teams invest in the development plans for high-potential leaders. Thus, it was no shock to find that business acumen, analytics capability, and M&A experience remain crucial CFO skills among the respondents. But survey insights reveal that these skills provide the broader perspective that CEOs now desire.
As CFO responsibilities expand, so has the CFO mindset. What we were surprised to find out from the survey was the importance they place on emotional intelligence in their own success. So, while CFOs become increasingly more integral to other aspects of organizations, interpersonal and cross-functional skills are paramount. And this unexpected asset, our survey reveals, sets the stage for the CFO evolution.
The Evolving CFO: Embracing EQ
Whether or not an evolving CFO has a textbook definition of emotional intelligence, it is apparent that competencies including empathy, communication skills, and interest in their teams’ personal and professional development are essential to individual and organizational performance. Beneath this broad heading, the ability to build strong relationships cross-functionally and cross-culturally was valued as a beneficial skill for the CFO of the future to possess.
How can a financial leader increase EQ? Like the other skills developed over your leadership journey, with practice, discipline, and support, CFOs can master EQ. Below are 8 steps to help you increase your emotional intelligence in this new era of finance leadership and thrive as a CFO.
Evolving CFOs enhance their emotional intelligence by being aware of their decisions, behaviors, and how this behavior affects others. Recognizing your behavior’s impact on those around you can increase your CFO influence, create trust within your team, and strengthen connections and relationships across the organization and cultures.
2. Social Awareness
Social consciousness is the capacity to perceive and appropriately react to others’ needs, experiences, and sentiments and understand social interactions. By improving their social consciousness, CFOs can encourage robust teams, promote effective communication with stakeholders, and make decisions considering the effects on all involved parties.
Additionally, showing a genuine interest in others’ perspectives and learning about their experiences helps CFOs develop empathy, a key component of emotional intelligence.
As a CFO, a staple occurrence in your role is experiencing highs and lows—particularly in these times of uncertainty. Managing your reactions to stressful situations and emotional stability will inspire confidence among your team and cultivate trust.
4. Relationship Management
Building strong interpersonal relationships, navigating conflicts effectively, and providing constructive feedback are all ways a CFO can increase their emotional intelligence.
5. Embrace Active Listening
Full attention in interactions fosters trust, indicating genuine interest in colleagues, regardless of their position. With empathy from high EQ, active listeners catalyze resilient organizations, fostering problem-solving in safe environments.
6. Champion Team Development
A top-notch CFO supports professional development and excels as an empathetic communicator, creating a positive working atmosphere. Delegation as part of your CFO strategy is critical to accelerating team growth, building mutual trust, and spurring innovation and organizational capacity.
7. Welcome Feedback
In this CFO role evolution, leaders must cultivate an environment that values colleagues’ insights on their conduct, establishing an essential feedback loop for personal growth and organizational success. Seek diverse sources including:
- Employee surveys
- 360-degree coach feedback
- Trusted one-on-one dialogues
8. Invest in an Executive Coach
It is difficult to enhance your skills without support or mentorship. A proficient executive coach can significantly aid an evolving CFO in striving for effectiveness, especially in intricate settings where relationship-building is crucial. Coaches vary, so if your goal is increasing emotional intelligence, consider a coach with a background in psychology.
The Future of the CFO Role
Undeniably, the role of a CFO has evolved. In their self-assessment, today’s leading CFOs are empathetic business strategists rather than functional technocrats. CFOs identify themselves as empathetic business strategists rather than just expert functional technocrats. There was a time, not so long ago, when the primary expectation from a CFO was to ensure numerical accuracy, focusing more on past data than future possibilities. But over the last two decades, developing robust business acumen has enhanced CFOs’ worth to their companies and opened lucrative career opportunities, especially for those at the finance function’s apex.
Looking ahead, the next stage in the CFO evolution will incorporate emotional intelligence into their skillset. This is no overnight transformation. Like all substantial developments, it will require consistent practice and time. CFOs who desire to operate at the highest echelons of business and deliver maximum value must commit to a behavioral change that fosters trust-filled work environments and cultivates durable, open relationships.
In this dynamic world of finance, only through such commitment can a CFO truly unlock the potential of their team, catalyze organizational growth, and achieve personal development. The journey may be challenging, but the personal and professional rewards are immense.