“I would also argue that in management the keys for success are beginning to tilt toward some qualities that women bring to the table... With all the data available to everybody, it’s becoming more about communication, collaboration, bringing people together, understanding the information that’s out there, and sharing the information.”
Sallie Krawcheck, former president of the Global Wealth & Investment Management division of Bank of America and CEO of global women's network 85 Broads.
Traditionally, leadership positions in finance have demanded both functional expertise and organisational skills to run the function.
As finance departments transform to become better business partners and support decisions in a challenging business environment, there’s a desperate need for a new set of skills, which go beyond the typical hard-working, project management and implementation competencies.
Corporate finance leaders are required to be more collaborative, emotionally mature, and persuasive. They need to focus on developing people in their teams, creating a collective vision, and fostering team spirit.
CEB’s recent research on finance talent issues found that competencies, and not technical skills, were the ultimate drive of success. When reviewing and quantifying competencies among thousands of finance team members across the globe, the research found competencies divided broadly into five distinct types, which can thought of as behavioral profiles:
1. Doer (strong implementation skills, persistence, project management).
2. Learner (openness to new ideas, flexibility, willingness to change).
3. Builder (ability to develop and manage talent by using a portfolio of skills).
4. Persuader (strong communication, ability to simplify complex ideas).
5. Strategist (understanding of business operations and technology).
The research showed that most finance teams exhibit strong doer and learner competencies but lack in the builder, persuader, and strategist competencies. Unfortunately, it’s the final three, together called the “pathfinder” skill set, that matter most. They define strong business support and have greater effect on department outcomes.
In short, the ability to communicate effectively is now a necessity for finance leaders. When seeking the next generation of these people to lead organisations, it is clear that female entrants in finance can make up a huge portion of the current competency shortfall. This is backed up not only by cognitive differences, but increasingly, as women continue to outperform in academia and on the job.
Unfortunately, most organisations continue to ignore the female talent pool to source future leaders, despite a shortage of candidates with these skills. Women account for a very small number in executive positions, with less than 12 percent of female CFOs among Fortune-500 companies. Overall, women hold just 20 percent of the most senior positions in finance, despite actually representing a majority of lower-ranking positions.
There are many reasons behind this unequal representation, but perhaps the most problematic is the way senior leadership positions are presented to female employees. For many female employees, leadership roles’ long hours compete with family time, while the associated cost of childcare also make them less desirable.
Within companies themselves, lack of appropriate coaching and mentoring to address particular needs of women leaders further widens the gender gap in executive-level positions. Women executives are also found to be paid less than their male counterparts. On average, women CFOs earn 16% less than the male CFOs.
The good news is that the most progressive companies are transforming their finance functions to become better business partners, and are following robust talent management approaches as part of the transformation initiatives. In particular they:
• Actively scrutinize leadership roles and promotions procedures to ensure they are truly gender-neutral.
• Focus on building these “pathfinder” skills in their teams and branding these as requirements for high-performance.
• Are more creative at sourcing candidates, expanding their talent pool to encourage more women leaders.
• Support the growth of strong women role models, mentors, and coaches to encourage greater participation by women.
As finance departments prepare their pipeline of future leaders, they should not overlook a crucial source of talent – i.e. women – who exhibit exactly the right combination of competencies to lead teams in the modern world.
Jean Martin is executive director at global business advisory service CEB