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5 leadership skills for the OEM CFO

By ArLyne Diamond

The OEM CFO, like the CEO, wears multiple hats. He or she is responsible for both external and internal activities. External responsibilities include successful relationships with the financial community. Internal responsibilities include managing the accounting department and sometimes other departments as well.

In my experience, unfortunately, these executives are often selected for their expertise in one or more areas – but not in all the areas in which they must excel.

Typically, if the past CFO was lacking in his (or her) ability to successfully reach out to the financial community, the next time the board – or the CEO – is looking for a new CFO, the focus of the search and the interview is primarily on this ability, with little or no regard for the other needed skills and talents.

When the job description is given to headhunters the focus is on achievements of a “hard” not a “soft skill” nature. In other words, we measure an executive by the professional talents he or she has – such as being a financial whiz, an outstanding comptroller, or a technical guru. We also think only people with experience in our industry are capable of being successful in our environment. Not true for many functions, especially that of the CFO.

As we climb the corporate ladder, the skills we really need are what are usually termed soft skills. This is as true for the CFO as it is for the CEO.

What are needed more than anything else are solid leadership Skills.

What are good leadership skills?

There are so many, often contradictory, answers to this question. But there are a few that transcend different points of view as they pertain to what leadership skills are most necessary for the CFO of a manufacturing organization.

A leader must be respected by those she wants to lead
Respect – This means both, respect for you as a person and respect for the path you have chosen for them.

No leader will have followers (unless by point of a gun) without first earning the respect of those to be led. Just having the title and the ability to fire people doesn’t guarantee they will follow your lead in the manner in which you wish it were followed.

If you lead by fear, as some dictators have done, you will get compliance, but it will be the minimal that people can get away with. If they fear you, rather than respect you they are not motivated to do their best.

On the other hand, if you are respected, your followers (employees) will want to earn your respect as well and will strive to give you their best ideas, creativity, skills, products and services.

A leader must pull – not push
In other words, to be seen as a leader, people need to believe you will take the risks with them – that you know how, why, where and when the tasks – the path – are completed because you’ve done them also. A leader must have the courage to lead. This means sometimes taking an unpopular stance.

The late Jay Pinson (Dean of Engineering, San Jose State University) said, “A leader is the first one through the minefield.”

We know of executives who fail as leaders because their ideas aren’t trusted. Remember the Pepsi executive at Apple? As talented as he was, he wasn’t trusted at Apple and was stereotyped as a misfit. Because of this he was replaced by Steve Jobs, who, in spite of some personality defects, was considered brilliant and having Apple’s best interests at heart.

A leader leads many different types of people and must have global understanding
Today’s OEM leader must also understand that we are living in a global community and that he is leading and managing people coming from many different cultures and points of view.

Not only are we managing those from other countries, we also have gender and generational differences with dissimilar sets of expectations that must be taken into account in order to lead and manage effectively.

The successful CFO recognizes that the manner in which she talks to people is now different. No longer do the short cuts we use when talking with people from a similar background work. Many words are ambiguous and have different meanings in different cultures. Think of the phrase “putting money into the kitty” and what image emerges. Some people understand it is anteing in poker and others see food being forced down the throat of a baby cat.

Also, sensitivities are different as are how people respond to authority. The CFO must adapt his style to deal effectively with the many different needs, experiences and expectations of the people being led.

Trustworthy CFO leadership
The CFO must be trusted by members of the board of directors, the investment community, the rest of the executive staff and all levels throughout the organization.

Can you imagine what the morale would be like if people didn’t trust their CFO? After all, this is the person with the purse strings.

Especially now, when there have been so many scandals about financial mismanagement and fraud – people are more suspicious than they might have been in the past.

Trust – rather than fear – begets loyalty and a group of followers who are free enough to offer their opinions and to add to the information being gathered. Trust – rather than fear – motivates others to do their best. Any successful leader must be trusted.

Multi-faceted focus of the CFO
The CFO as leader is in the unique position of having to be both outward and inward in focus.

He or she is not only involved with the external financial community (banking, VCs, angel Investors…) but she is also responsible for the accounting department and many other functional groups in the company. Often human resources, administration, and even IT also report to the CFO.

AND, it goes without saying that the successful CFO as leader must have outstanding communication skills and a charismatic personality.

 

Connect directly with ArLyn in GlobalNet community, the largest peer-driven resource and community for electronics supply chain; finance, manufacturing and procurement professionals for gathering information; exchanging ideas and networking to help mitigate risk, reduce cost and make more informed decisions on management concerns, products and services impacting the global enterprise. Learn more.




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