To begin, the confusion in some comments in between hard skills and soft skills need straighten out for continuing discussion to be meaningful.
Laconically, the consensus definition about hard skills is occupational to perform certain type of task or activities. Hard skills are easy to observe, specific, and trainable such as job skills like accounting, finance, programing etc. To be good at hard skills needs IQ, the left brain logical center. Hard skills can be learnt by attending educational institution or book reading. In hard skills, rules always stay the same regardless of which company, circumstance or people you work with.
Soft skills are people skills, behavioral. The outcome of which relates to a person ability to interact effectively. Soft skills are personality driven. It usually associates with EQ, the cluster of personal traits, social graces, communication, language, personal habits, friendliness, and optimism that characterize relationships with other people. In soft skills, rules changes depending on the company culture and people you work with.
Which is important to a leader’s success? My view is it is circumstantial. At times, hard skills rank primary, and soft skills are secondary. Other times, soft skills are primary and hard skills secondary. Let me illustrate by a real life example, how a highly paid CEO lacking the essential hard skill was reviled by the public, ousted from power and fell from grace.
A public transport’s CEO, who is ignorant of risk management, encountered her greatest test in her business career. One of the trains broke down without light and air in the cabin; passengers were hemmed in excruciating situation. A pregnant woman was frail and had difficulty in breathing; one passenger took the initiative to break the glass to let air flowing into the cabin from tunnel. The company did not realize how severe the situation was that reverberated and piqued the public, the public’s opprobrium heaped on her requesting the CEO to step-down. The CEO apologized and resigned.
What this relates to our discussion? The problem is there were no risk management procedures in place. The company did not have all round enterprise risk management evaluation. Such train breakdown is an operation risk bound to occur, there must be procedures detailing how employee should respond when situation exacerbates into a convulsive crisis. At what circumstances, the crisis mode must be activated; for example, if the electricity cut-off for more than ten minutes, that will trigger safety measures to evacuate passengers to emergency exit. It is a painful hard skill she did not learn, that cost her millions dollar job. If she had the risk management skill, she would have trained her staff this hard skill to respond to the crisis. This is where hard skills were primary and soft skills were secondary.
During the crisis, incessant communication with the passengers came to the fore. If hard skills were absent, soft skills ascended to primary. However, the train driver’s ineptitude lacked the EQ and communication skills that was the bereft of hope.
Skillset is a lifelong learning process, whether it is hard or soft. When I graduated many years back, I had ample hard skill competency, but my communication skill and conflict resolving skills were rudimentary, that cost me a job when I was in direct conflict with my director due to ethical issue. Someone enlightened me in the job interview. I started to read self-improvement books and observed best practices. My soft skills deficit improved markedly. I am still learning and improving as I grow older.
Some say senior leader does not need to horn their hard skills because they have exceptional soft skills, their wisdom to maneuver political landscape in an organization bestrides the company. That is half true. The vicissitude of business world demands business leader to be equally good at both. For example change management which requires business leader to galvanize the support from various factions of different interests in the course of change process. That draws on soft skills. Business leader needs to keep up to technology progress, such as leveraging social media as a marketing tool to facilitate sales growth, which is a hard skill. When times come, you are equipped with the right skills to tackle different new problems at different circumstances.
Why some SME business leaders cannot cut the mustard by achieving business breakthrough, partly because they do not brush up both skills. Their soft skills may be better than their hard skills, but never go anywhere, because their learning progress in the cycle for both skills is low and flat. Human being needs continue learning to augment better performance. And the learning process is interactive and sometimes complementary; you can sharpen your soft skills by attending seminar, reading books, learning by practicing (hard skills) rather than fumble on your own.
So, it is a non-issue as to which is more important, uplift, sharpen and muster of both for readiness is the key.
2. From Controller to CFO: Do I have what it takes? CFO network 20-2-2012
http://www.linkedin.com/e/-vo80fz-gz60cgfo-5h/vaq/95873349/51826/70373707/view_disc/?hs=false&tok=0bpm7FIs4sll81
There is no hard and fast rule as to how best to move up from controller to CFO. The quicker way probably is by dint of joining smaller companies where you can gain errands of good exposure easily; unlike in large firms where accountant has to follow a rigid hierarchical upward path and a predefined mantle.
Another contributory factor is relating to the industry you join, one characteristic example is to join a company of fast changing industry landscape. You need to muster the necessary skills to facilitate the variegated change process; you progress together with the company in the change process.
I think luck play a substantial role which determines firm you join; and where your career lead to is somewhat circumstantial.
Most bosses treasure CFO to have good analytical skills to complement their weaknesses due largely to senior management works as a team. Of course, you need to be at your top of your technical competency in your field. My reminiscence of my previous job evokes I reported a foreign currency translation loss in my accounts. My boss was an electrical engineer and was in vexation of the accounting treatment. I needed to be able to explicate the accounting standard in layman term how it had happened.
Most bosses like their CFO to have business acumen. When you speak to him in business terms, you find your relationship draws closer.
It is rather the Holy Grail to have a shortcut. Rome was not built in one day. It is a life-long learning process and you be perseverant come hell or high water in order to elevate to the singularly prominent position.
3. An Accountant or a Leader - but rarely both Proactive accountants
In Management lexicon, it is whether you are an administrator (a manager) or a leader?
The niceties are: a transformation leader is proverbial, has the prowess to establish direction through vision and hunker down, be authentic with a sense of purpose, brings about change, inspires, motivates and empowers others to achieve the mission, encourages commitment to the purpose in followers by aligning people, an apostle tenaciously builds team and fosters collaboration, phlegmatically resolves conflicts, takes up the cudgels to render feedbacks and rewards.
Accountant is by far seen as backroom guy, hardly required to lead forward for all and sundry, though the role of accountant is evolving. In my past more than twenty years in the field, it is immanent in my experience to have more administrators (managers) than leaders. In my own context, many want stable, not messy job process, and are contented with managing the process cycle proficiently. Many hate challenging job require them more than just processing accounting transactions, shy away giving feedback to subordinates, and hardly reward good deeds. They are more an administrator than a leader.
It is not ballyhoo, my leadership quality is partly inborn, and partly learning by immersing myself in Management studies. I recall my earlier years of my accounting career. In an acquired subsidiary, I took over mucking up accounting records, key persons left Accounting Department. I was between a rock and a hard place, was foisted to start everything afresh. The company was secluded; public transport was far away beyond reach. I personally visited the neighboring companies to check how they solved their transport problem, looking for opportunity to share transport for my staff. I went beyond what was called for in my job to go extra mile, which seemed beyond the ken that astonished my neighboring managers, my directors and my staff.
In another company, the key positions left due to lack of necessary technical skills to handle business changes. I moved in to exemplify my technical competence to win the trust of my staff. I reorganized and streamlined the Department. I delegated some important tasks to the middle level. They felt job satisfaction due to task significance. I inspired my staff to attend professional course. I built team spirit and praised good work. The pronounced effects boosted morale and spirit.
Everything came natural to me if you ask me whether I had under someone tutelage. I would say yes. I am aficionados of management books, articles and go the full hog to put learning into practice. The upshot is inner satisfaction.
4.Are you a partner or a number cruncher? Proactive accountants
Sad to say that I am no longer a CIMA member. As to this discussion, I offer my two cents of worth.
While the role of CFO has changed a lot, I don’t see there is a major shift towards business partner like involve in championing strategy and innovation. It all depends on size, industry and culture.
I personally agree to CFO role to exalt to a significant business partner, add value by contributing to company’s strategy and innovation.
If you check the job descriptions of many CFO openings, few companies set strategy and innovation as the major recruitment criteria. Though number crunching is delegated to subordinates, it is still part and parcel of CFO’s responsibity, a fait accompli.
Last month, I came across a posting in another group; A CFO asked member for help, for a question read “One customer is very late in paying. I have reserved for the late receivable and the overdue, built-up interest in the A/R reserve. An agreement was reached with the customer to get their account in order and to go-forward according to agreed terms. As part of that agreement, the delinquent interest will be written off. The credit goes to the receivable. Where does the debit go? Interest Expense or the Receivable Reserve?” It is not a laughing matter; it shows CFO is still buried in the number.
I bought a book fifteen years ago, titled “Reinventing the CFO” by Cooper & Lybrand, the book stresses CFO role to move from Financial management to strategic management in a business partnership. Time passes; this change is still not in every nook and cranny. Those reported changes are more forward looking large companies with different culture at length require CFO to assume and participate in value creation, that shifts the role from hemmed in by commodity like litany backroom transaction processing duty to a nifty high end value creation one, making CFO’s a kingpin in business.
I would say business partnership more happens in technology companies than in bricks and mortar main street companies, which is what I mean by size, industry and culture determine what roles a CFO plays.
5. CFO as strategic business partner CFO network
While the role of CFO has changed a lot, I don’t see there is a major shift towards strategy and innovation. It depends on size, industry and culture.
I agree be a change agent, contribute to strategy and innovation are all value-added.
But if you check the job descriptions of usual CFO openings, few companies set strategy and innovation as the major criteria. Though number crunching is delegated to subordinates, is still part and parcel of CFO’s responsibility, a fait accompli.
More forward looking companies at length require CFO to assume and participate in value creation that shifts the role from hemmed in by commodity like litany backroom transaction processing duty to a nifty high end value creation one, making CFO’s a kingpin in business.
This change is still not in every nook and cranny. I would say it happens in technology companies more often than in bricks and mortar main street companies, that is what I mean by size, industry and culture determine what roles a CFO plays.
6 Does small company requires a CFO CFO network
I wish to offer my two cents of worth from different perspective.
First, the title CFO itself is arbitrary, ostensibly means Head of Finance. There are similar Head of Finance positions, but named as Financial Controller, Finance Director, VP Finance, some even Finance Manager. I came across CFO report to Group CFO.
The raison d’être of a Head of Finance is a definite “yes”. In my consulting experience, many small business owners’ Achilles heel is run into working capital problems due to their paucity of financial knowledge. They are too ambitious to grow rapidly and fall into the trap of overtrade. The outcome is deleterious. The cogent reason to have someone with the knowledge will help them to juggle in between growth and working capital management. The risk detrimental to their business will be substantially reduced.
A Head of Finance can be versatile to offer much expertise essential for the existence of a small business, such as internal control, risk management, cost containment, and establish a credible framework for bank borrowing etc.
Better information does not measurably lead to better decision. Too much information falls prey to what management lexicon so-called as analysis paralysis which exacerbates bad decision making. Many small company owners do not have time to analyze information in their day to day running of business. Decision making process does not rely on information alone and financial expertise does not build in one day.
7. Convergence of FASB to IAS
The Accounting World is predominant with the view that principle-based accounting is superior. And FASB is working towards that goal. In the real world, there is no hard and fast rule to determine which is better.
As the business world is increasingly growing in complexity, litigations mount, users wont to explicit rules to tell them what is right and wrong rather than ambiguous principle-based, that is paltry, can be construed in various possibilities. As complications develop, you need more and more rules that make interconnection intractable, to make the standards relevant, you develop a thick Accounting Bible which is more of a labyrinth, you become not see the forest for the trees. This is a real problem.
Therefore, standards setter needs to thread a fine line between the two. It is arduous but achievable. I wrote an article several years back when the issue was in a rash of hot debate. The title is “standards setting process, principled based? Rule based?” in my blog http://www.minfeng.blogspot.com/
8. Why number crunching obsolete fast?
Glorified book-keepers and old fashioned number crunchers are obsolete fast. In my country, in the arena of accounting, any non-qualified or partly-qualified accountants are eligible to handle full set of bookkeeping job. So, where can you add-value to the business if employer can find someone cheaper. You find your position is precarious.
The nuance is: what employer most keen of you is you talk to her in business terms, galvanize her business to exponential growth rather than the stupefying debit and credit or obfuscate accounting standards that creating snafus. If you can make yourself indispensable to her, the better. And when economy is in precipitous decline, you are sure the last one to let go.
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