It is certainly much easier to be a motivational leader when the news is good and there are plenty of perks to dole out. When your latest pep talk includes a mention of free baseball tickets or, better yet, bonuses, you can be sure the troops will love you. But when the company is under intense pressure and there is little to announce other than wage freezes and plant closings, even the most fearless leader can be tempted to hunker down and keep his office door closed.
While the urge to hide is an understandable impulse, it is precisely the wrong thing to do. As the recession drags on, many workers are dragging, too, and in need of inspiration. Employees are looking more carefully than ever at their company’s executives, not only hanging on every word but also observing nonverbal cues like facial expressions or other seemingly innocent behaviors: Is that door closed because the CFO is on a personal call, or because layoffs are being discussed?
Robert Sutton, a professor of management science and engineering at the Stanford Engineering School, says that when employees feel threatened they become distracted from their work and devote more attention to watching what their bosses are doing in an effort to figure out what’s going to happen next. “People in the organization are carefully watching every word and action from the CFO to know whether their jobs are at risk,” agrees Alexander Grashow, managing director of Cambridge Leadership Associates. “They’re looking to see what the CFO says while he’s getting lunch, while he’s in meetings, while he’s in the hallway.”
Finance executives can boost their leadership quotient by taking several specific steps to improve communication; some of these actions will serve any executive in a leadership role, but one is unique to finance — and offers an opportunity to not only help the company but also raise the CFO’s profile.
One of the most important ways to provide crisis leadership is also one of the easiest: be there. People take comfort in knowing that top managers are on the job, working alongside them through the business’s challenges. “In a difficult environment, I think employees and external constituents look more than ever to a leader for cues about the state of the business,” says Steven Kafka, vice president of finance at biotech firm Infinity Pharmaceuticals. “One thing I’m trying to do is to be more visible. I’m very optimistic about our business, and I think it’s important for my finance team and the rest of the company to see that optimism.” Kafka says he builds time into his schedule to roam the halls and tries to eat lunch in the cafeteria regularly.
“You have to get out from behind your desk,” agrees Cosmo Alberico, finance chief at Odyssey Logistics and Technology, a transportation- and supply-chain-management firm. “You need to communicate more than ever, not only with staff but with your customers and analysts, both formally and informally.” Alberico now travels more frequently to Odyssey’s various far-flung locations to hold small-group meetings. He and the firm’s CEO hold formal, companywide meetings once or twice a month instead of every other month as they had in the past. The CFO also holds face-to-face meetings rather than conference calls with his direct reports in the finance, IT, and facilities groups. “I think people feel better when they see a C-level guy coming and spending an hour with them,” he says.
CFOs aren’t always known for their communication skills, but with employees, investors, vendors, and customers eager to hear the financial details straight from the source, it’s time to get more comfortable with public speaking. “If communicating isn’t your strong suit, you may need someone to help you,” says Robert Duboff, CEO of communications consulting firm HawkPartners. Duboff suggests identifying a strong communicator in the finance department or working with someone in marketing or elsewhere in the company to craft the appropriate message and practice delivery and presentation before a company town hall, Webcast, or conference call.
Not every communication needs to be momentous. Sometimes just hearing from a senior finance executive can reassure nervous staffers; in the absence of news, many assume the worst. “People I’m coaching will say to me, ‘I don’t really have anything to say.’ A good communicator can always think of something to say,” says Duboff. “Try, ‘Here’s what I’m working on, here’s what we have coming up, here’s what we’re waiting to hear about,’ or simply, ‘There’s no news. We’re still here. We’re making progress. Here’s what you can do to help.’”
At Infinity, Kafka recently participated in a half-day, companywide learning session, which he describes as “a kind of room-to-room event” in which members of each department gave a 15-minute presentation about what they do and how they support the firm’s goal of developing cancer-fighting drugs. “It’s a way to build community and create a sense of a shared mission. It also gives people the chance to ask questions,” says Kafka.
One way that a finance executive can play a unique leadership role today is by making sure the rest of the business has all the data necessary to piece together a forecast for the days ahead. With the entire organization now intently focused on the core concerns of finance, including cash management, cost reduction, and risk, the stage is set for the CFO to take the lead in critical discussions throughout the business. Pamela Craig, finance chief at Accenture, the global business-services firm, says, “Finance can be helpful in times of stress because you can provide some certainty. Looking at how the business did in prior downturns gives people something to react to, something to work with.” Conversations that center on scenario planning can provide a valuable starting point for the management team as it tries to develop a strategy for survival and recovery.
“If you don’t allow your detailed knowledge to bog you down, your expertise can be very helpful to a business-unit leader,” says Alberico, who recently worked with Odyssey’s sales staff to help them understand the profitability levels of the company’s different services. “We’ve been able to help the head of sales focus on the type of services that he should be pushing in order to drive higher margins, which is really a different approach than, ‘We’ve just got to get out there and sell,’” he says.
Grashow of Cambridge Leadership urges CFOs to seize the opportunity to get more involved in strategy development earlier in the planning process. Finance chiefs should work on building informal relationships throughout the organization so that they are included in strategic conversations at the earliest stages, he says. Then they can provide information about budgets and the costs of various ideas to the rest of the company and encourage them to decide how to make the best use of limited resources, rather than weighing in at the end of the analysis with a yes or no. “Try to take the approach of saying, ‘Here’s our budget,’ and then give the choices back to others,” says Grashow.
While providing useful data to business-unit heads can help a finance chief enhance his or her existing role, to expand that role and earn credentials as a strategic leader it is critical to go a step further and address the future of the business. A CFO who takes the long-term view can challenge the stereotype of finance executives as shortsighted “Dr. No’s” who are solely focused on cutting costs.
“This is an ideal chance for the CFO to show that, while he understands the need to keep costs down, he has a deeper appreciation for the sustenance of the business,” says Duboff. “It’s a good time to be asking questions like, ‘What are we investing in?’ ‘What’s our longer-term game plan?’”
“As hard as it is to do, especially in this economic climate, we need to look well beyond next quarter,” says Alberico. Odyssey recently upgraded its technology platform and is also hiring, hoping to take advantage of the greatly improved market for talent. Alberico touts these investments both inside and outside the business in an effort to reinforce the message that Odyssey plans to make it through the recession.
While it may be tempting to deal with the stress of the moment by shutting the door and obsessing over every detail of the budget, those CFOs who recognize the importance of their words and actions as business leaders have a real chance to both help their careers and ease some of the anxiety in their organizations. As Accenture’s Craig says, “It’s an opportunity for finance to have a stepped-up role in the business. Let’s not waste it.”
Kate O’Sullivan is a senior writer at CFO.
If you want to play a larger role in internal communication, speak up.
Many CFOs who are willing and able to address the troops may find themselves hamstrung by a corporate culture in which the CEO does all the talking and the finance chief stays quietly behind the scenes. This is the perfect opportunity to change that dynamic. With concern about the recession and its impact on company finances permeating many, if not most, workplaces, employees are eager to hear directly from the keeper of the numbers. Before you can speak to the masses, however, you may need to have a private conversation — with the CEO. “Too many people say, ‘I’d better not even ask,’ to take on an expanded communications role within the company,” says Robert Duboff, CEO and founder of HawkPartners, a communications consulting firm. “But it’s better to ask than to assume the CEO doesn’t want your help.”
By noting that employees are more likely these days to pose detailed financial questions, and that they might find it most satisfying to hear the answers directly from the expert, CFOs can broach the concept of an expanded role in a nonconfrontational way. Ultimately, finance executives may also have to decide how much such a role means to them. “If you’re a believer that the CFO should be communicating more,” Duboff says, “and the company culture and the CEO are against that, maybe you don’t really want to stay there.” — K.O’S.