Developing CFOs as whole leaders.

• Author: Dotlich, David L.
• Position: Chief financial officers - Cover story

In the memorable 1939 Metro-Goldwyn-Mayer (MGM) movie, "The Wizard of Oz," the scarecrow, tin man and lion searched far and wide for a brain, a heart and courage, respectively. Interestingly, it's been proven time and again that however elusive these qualities are, the best business leaders have them. Simply stated, the most successful leaders lead with their head, heart and guts.

Indeed, CFOs don't all have the same leadership abilities, and their differences can result in various outcomes--both negative and positive. To illustrate this point, what follows is a tale of two CFOs, Wes and Will--both of whom are real, and only their names have been disguised.

Wes is the CFO of a Fortune 500 organization with decades of experience in finance and business. He's intellectually brilliant and conducts himself with integrity and high ethical standards. Few other names in business can match him as a recognized corporate leader, and he takes pride in the accomplishments he's achieved in his career. When it comes to understanding the financial aspects of the role of a CFO and acting as the face of the company to Wall Street, there are only a handful of CFOs in the world who can match his accomplishments.

Will is also a CFO of a Fortune 500 company with a track record and background similar to that of Wes. Will is also one of the keenest minds in corporate finance today, and has risen through the ranks of finance in a variety of roles to the top finance job in his firm. As a strategist and manager in control, finance and treasury, Will has demonstrated the ability to lead and communicate with credibility and impact.

Wes and Will have similar, fairly typical CFO responsibilities in large, complex global organizations. Both men are responsible for the overall financial integrity of their organizations and reporting accurate results and forecasts. It is their responsibility to maintain financial control, partner with their CEOs and communicate strategy and results to their boards, on which both serve as full members.

Additionally, both of these CFOs are similar in age, career stage and level of respect and admiration they garner from the outside world. With all their similarities, there is one important way in which these two leaders differ dramatically: Wes is about to be pushed into a retirement he did not choose, while Will is being seriously considered to succeed his company's current CEO.

With so much in common, why do Wes and Will face such different futures? To put it simply, Will leads with his head, heart and guts. He is what can be described as a "whole leader." He has become what CFOs must be in order to manage the complexity of their role--a whole leader able to demonstrate skills in three areas: head (providing strategy, direction and purpose), heart (understanding, working with and developing others) and guts (doing the right thing based on clear personal values).

Whole leaders have all three of these key components, whereas partial leaders have only one or two. Will is a whole leader, and Wes--as smart, competent, and technical as they come--is only a partial leader. Will is going to the top job, and Wes is likely going to the golf course--way earlier in his career than he anticipated!

The Changing Role of the CFO

Developing the qualities of a whole leader, like Will, has become both a business imperative and survival skill for today's CFO. In fact, CFOs who want to have a wide variety of career options available--those who want to have some control over their own career path and the ability to write their own career endings--will need to adapt to an increasingly complex regulatory, legal, political and interpersonal environment by developing qualities that have not often been considered high priorities for CFOs.

As business leaders face greater ambiguity and fewer constants daily, partial leaders--even CFOs--will often find their career paths going the same direction as Wes's. Not every CFO who is a whole leader will become a CEO, but very few CFOs who are partial leaders will find that option even open to them.

No one questions that the CFO's role is changing. Let's start with the always complex position the CFO must occupy between the CEO, business unit leaders and the board of directors. Understanding human relationships, motives, agendas and style is a prerequisite for success--typically the "heart" skills of compassion, empathy and intuition.

Then, there are new challenges the CFO must address in communicating information and setting clear boundaries in an increasingly transparent and connected world of analysts, investors...