Many finance departments are witnessing a shift from governance to guidance functions, but in a recent survey four out of five chief financial officers (CFOs) report their staff lacks the skills needed to deliver in these roles. To remedy, the best finance departments are redesigning hiring strategies around critical performance drivers and embedding them into their skill development and performance management protocols.
To identify the performance drivers that matter most, CEB (formerly Corporate Executive Board) studied 2,200 finance professionals across 75 global companies, based on its Finance Competency Model, which includes 86 soft skills and 90 functional competencies.
The model includes all the technical expertise traditionally expected of the finance function, and also includes soft behaviors that characterize successful finance leaders. A factor analysis of the survey results yielded three discoveries:
Finance staff exhibit five types of broad competencies: doer, learner, builder, strategist and persuader.
The average finance team is weak in the competencies that lead to superior guidance for business partners.
Finding an employee with a perfect mix of competencies is highly unlikely.
Tim Raiswell, senior research director for CEB, explains that finance managers have traditionally sought and rewarded the "hardworker" skillset. Made up of "doer" and "learner" competencies, hardworkers are characterized by their strong execution skills and willingness to try new ideas. Hardworkers have been well represented in finance departments but have not been found to exert a strong influence on overall department performance.
The "pathfinder" skillset, made up of "builder," "strategist" and "persuader" competencies, is characterized by skills such as talent development, clear communication and a deep understanding of a company's business objectives. Pathfinders show a significant impact on the overall performance of finance departments.