Learning how to lead as CFO: the essential capabilities of successful CEOs--allowing leaders to perform at their best during stressful situations, as well as getting the best out of their people--can be learned by CFOs.

• Author: Menkes, Justin
• Position: Leadership

Through their tenure in the chief financial officer role, executives develop strong logic and analytic skills, the courage to ask hard questions and say "no" and the flexibility to successfully adapt to a position that has changed dramatically over the past decade. CFOs also develop comfort in working with the board of directors through significant and regular exposure to the board.

But when boards consider candidates to ascend into broader leadership roles, they sometimes view CFOs as executives who lack experience leading and motivating a 21 st century workforce. To counteract this perception, financial executives must develop leadership skills and demonstrate their potential to lead beyond the finance function. By doing so, finance leaders have an opportunity to both improve their performance in their current role and to better position themselves for future career advancement.

Studies of the differences between chief executives who fail and those who have shown remarkable staying power reveal that the most profound way that leaders can differentiate themselves is through their ability to realize their maximum potential and the potential of their workforce.

It is the essential part of a CEO's job--and the quality that CFOs must develop and demonstrate to prove their own leadership ability.

Research over the course of eight years shows three essential capabilities that allow leaders in today's turbulent world not only to perform at their best, but also to get the best out of their people. These drivers literally set in motion the fundamental function of leadership, and together they comprise the mental architecture that CFOs must develop in themselves to be effective leaders. Each of these three traits is a catalyst of the mastery displayed by the most successful CEOs.

TRAIT #1

Realistic Optimism

Most people manage their anxiety under duress by using coping mechanisms that mask the risks involved in the actual circumstances with which they are confronted. They ignore critical facts and rely on a belief that things will work out. Or they focus on the wrong things--propping up a sapling when the whole forest is burning.

But great leaders remain acutely aware of the reality of the challenges they face so they can focus their efforts on actions most likely to yield results. This attribute is called "realistic optimism." Possessing an awareness of actual circumstances, good leaders balance what is known and unknown to prepare for multiple plausible events. By doing so, they...