10 Ways to Cultivate Up-And-Coming Finance Leaders

How exactly did you get to be a senior financial executive? Was the deck stacked against you? Did you hurdle obstacles? Or were you groomed from day one and drawn through the ranks? Was it a straight line from cubicle to corner office or a series of fortuitous digressions? Did you signal your aspirations early or let your achievements push you into the boss’s seat?

Regardless of one’s path, I believe great leaders are ultimately made. Or, at least, they make themselves.

Even when a future leader is born with abundant aptitude, he or she needs to take on progressive, surmountable challenges to flourish. Ideally, many of these challenges will be delivered intentionally, continuously and systematically from one’s employer.

Since today’s leaders are tomorrow’s retirees, leadership development should be constant. Just as farmers amend their soil for the future even as they grow this year’s crops, great organizations never stop cultivating leadership potential.

In many organizations, leadership development is urgent. CFOs and VPs of finance collectively rank leadership within [our] organization as the highest priority of eight finance areas potentially needing improvement over the next year in Protiviti’s 2018 Finance Trends Survey Report. Sixty percent rated that area an eight, nine or 10 on a 1-to-10 priority scale.

After nearly four decades ascending the ranks and grooming successors, I’ve come up with 10 bedrock leadership development principles that apply to any finance organization:

1. Hold today’s leaders accountable for the next generation. Developing the next wave of leaders is a central responsibility for any current finance leader. Long-term business performance depends on it. Make it clear to executives and managers that leadership identification, development and inspiration will be expected, measured and rewarded.
2. Create a feedback-rich culture. Nobody loves criticism, but employees with high leadership potential hunger for improvement and will absorb constructive suggestions without resistance. (In fact, research shows millennial workers, whether leaders or not, are particularly interested in frequent feedback.)
3. Review the entire workforce. Have current finance leaders periodically come together specifically to identify and assess emerging leaders in their midst. Evaluate progress and get promising candidates the support they need to grow. See if you can spot any employees showing leadership potential for the first time. Keep it positive: The goal is not to pick winners and losers or cull the field, but to help every legitimate candidate advance.
4. Review both ways. Enable subordinates to review upward. Invite them to assess their superiors so you emerge with 360-degree assessments of all finance leaders, including the current ones.
5. Get the data. Someday companies may be able to delegate leadership identification to standardized tests, predictive analytics and individual e-learning plans. We’re not there yet. What companies can do is assemble all the “data” they can around good people – their talents, attitudes, behaviors, achievements, interests, experiences, stretches, rebounds and self-taught skills – and develop a true story around each person. (Then the emerging leaders can write the next chapter.)
6. Mentor. Employees with high leadership potential always want more knowledge. They will thrive when given direct, liberal access to experienced leaders who can accelerate the learning process one on one. Make sure every finance employee has a mentor and, if possible, is a mentor.
7. Give stretch assignments. This is a hallmark of my company. The only way for a high-potential leader to grow is to embrace new challenges. My company provides emerging leaders with diverse experiences in a variety of settings – small stretches – before inviting them to make bigger stretches. Clarify that mistakes are a natural part of the learning process and are acceptable as long as one recommits to progress. There’s no greater joy than seeing an emerging finance leader nail their first stretch assignment.
8. Help leaders identify themselves. Ask every employee about their aspirations, interests and hidden talents (such as foreign languages) as well as their preferences for relocation (or not). Formalize this information-gathering in your HR software so that when you’re looking to fill new opportunities, the right candidates rise to the top. Many CFOs are looking for improvements in analytical skills, digital technologies/automation and core business skills, according to the latest Deloitte CFO Signals report. Also make it clear that diversity is valued at all levels as a matter of both fairness and business performance.
9. Do behavioral interviews. In conversations with your emerging finance leaders, get them talking about what they’ve accomplished. Leadership is ultimately about performance, not potential, and accomplishment is where the rubber meets the road. Train all your leaders to interview through this lens. It sets the tone and reinforces what’s important.
10. Cultivate learning agility. This quality is one of the greatest predictors of leadership success. Learning agility is an employee’s ability to: learn just about anything that will help them perform; navigate a large, complex organization; rebound from failures; embrace change; and demonstrate a growth mindset. If you consciously look for learning agility in protégés, you will recognize it when you see it.

Embracing principles like these will help you ensure that your leadership development is deliberate and productive. Action with intention is important because even born leaders are ultimately made – and made better through systematic processes.

Not everyone needs to be a leader. But for those with the right stuff, there will continue to be varying paths to senior positions. While candidates themselves need to do the hard work, senior financial executives can make sure that the paths are clear, well-marked and connected to the right destination.

Thomas A. Lawson is chairman and CEO of FM Global.