industry in the U.S. is in the midst of major market disruption. As systems condense and integrate and
nontraditional players enter the marketplace, guiding this transformation will
require smart, bold action on a variety of fronts.
Human Resource teams and insurance companies have traditionally led
the way when it comes to initiating and implementing improvement efforts. While
they have achieved some level of success, there is opportunity to do more. Surprisingly,
in the abundance of material on healthcare
improvement planning, we find very little that speaks to the role of one central
individual—the CEO. What precisely should be the task of the CEO, and how is
this role different from that of other executives or other stakeholders?
In today’s fast-moving business environment, companies cannot settle for incremental improvement; they must occasionally make radical changes to remain competitive. This is particularly true in the age of market disruption. In this post, we’ll look at some of the market dynamics that are driving the need to improve the healthcare delivery and cost model and examine several best practice actions CEOs can take to help accelerate these improvements, including:
Leading by example
Healthcare as a core
A fundamental management tenant is that leaders
take personal ownership of their company’s toughest challenges. Still, despite persuasive
arguments, many CEOs have not treated health care costs as a central business issue.
They often transfer the responsibility to other internal teams or departments
that lack accountability for the company’s financial performance. This is not
the optimum approach.
Getting CEOs to approach health care costs like they do other parts of
their business can deliver substantial performance results. Key attributes CEOs
can bring to the forefront are their motivational and influencing capabilities.
They can help bolster improvement efforts by
communicating the rationale for healthcare changes, securing beneficial
alliances and modeling the desired changes.
Clear communication. CEOs regularly make gutsy decisions that affect employees, from
closing business units to discontinuing strategic operations. They make clear the
reasons for the changes, and employees acknowledge them as a part of their workplace
reality. Communicating health care changes should be no different.
The area of cost
containment and balancing rising healthcare expenses with employee expectations
is a good example. Controlling costs often requires steering employees to
providers that can deliver high-quality care at the lowest price. But imposing limitations or implementing any
type of healthcare change can be met with stiff opposition—even though the
change may be in the best interest of all parties.
This is where
honest, transparent communication is vital.
Case in point: Walmart confidently uses financial incentives to guide
employees toward a number of pre-selected centers of excellence— specialized
programs with concentrated areas of expertise— for expensive medical procedures.
The practice has resulted in significant cost savings. Employee complaints have
been minimal because the company’s leadership has effectively communicated the reasoning
and logic for the practice just as they do with any other important change in
collaboration. Strategic partnerships are essential for
remaining competitive in today’s highly disruptive business environment. To
become more entrenched in the ecosystems that employees engage in, it’s
important for CEOs to strengthen and expand their alliances with a broader
range of partners in and outside the healthcare market. CEOs are ideally
positioned to work with potential partners to identify ways to work together
for mutual advantage.
The trend toward value-based care will continue to drive companies to closely scrutinize their healthcare options and fine-tune their cost management approach. Business can’t do much about shifting market dynamics. But they can team together to more effectively negotiate with providers and help ensure that healthcare quality is in line with costs. Bottom line: CEOs who form smart alliances and are proactive in their collaborative approach will save more on health care as will their employees.
Leading by example: When substantial financial
risk is at state, CEOs have a fundamental duty to roll up their sleeves and get personally involved. Leaders who give only lip-service
to an improvement effort will find everyone else following suit.
Modeling the behavior you want and
creating a personalized story will help employees buy into in the improvement
approach by answering their pressing questions, such as “What are we changing?” “How will it be implemented?” and “How will
it impact me?” People will go to surprising lengths for issues they believe in,
and a compelling example set by the CEO will establish and reinforce their loyalty
(and participation) in the effort.
CEOs are uniquely positioned with the responsibility
and authority to articulate the strategy, vision and goals that frame every new
business challenge or initiative. This is especially true when it comes to managing
a transformation as significant and sensitive as employee healthcare.
For CEOs leading healthcare transformation, there is no single model for success. But they can place the odds in their favor by focusing on several core leadership actions: making the changes understandable and meaningful; modeling the preferred behavior; building a reliable and loyal team; and relentlessly pursuing results. Together, these efforts can generate the synergy needed to achieve tangible, lasting improvements.
If your business is like most, in the early stages it was
all-hands-on-deck with everyone doing whatever it took to keep the organization
afloat. You likely pieced together a human resources process with several
people taking on various duties.
Managing HR may
be something you can’t – or shouldn’t– use your valuable time to do, depending
on the scale of your organization. If the leadership team of your small to
medium sized business has been handling the HR tasks it may be time to hire an
HR pro. However, how do you evaluate when is the right time to make that
decision – and who you should hire to do which HR tasks?
In this post,
Growing pains that indicate it’s time to add HR to your team
Tactical and strategic HR tasks
Types of HR employees
HR technology and outsourcing
You’ve pieced together
an HR process that seems to be working. Recruiting and hiring are handled by the
business founder who’s been tasked with building a team from scratch. Your CFO
manages payroll and compensation and handles benefits issues. Meanwhile, your
admin or office manager processes new hire forms and requests for time off.
Then you hit a
You’re not attracting the best candidates
An overburdened key employee quits
You face legal and compliance issues
You don’t have a process to make essential hires quickly and effectively
With so many
competing priorities, you may find it challenging to prioritize HR. Perhaps
your top pick for a critical role turned you down because you haven’t had the
time to research what’s in a competitive benefits package, let alone put one
together. You missed out on another candidate when they lost interest because
you spent your time screening candidates for a different role instead of
getting back to them. Then your admin quit because she couldn’t keep up with
her “other duties as assigned” HR tasks while also assisting
customers and supporting your sales team.
If that wasn’t
bad enough, your legal fees are starting to add up. An employee filed a sexual
harassment claim against your company. Then, because you misclassified a team
member as exempt to avoid paying overtime, you’ve got a wage dispute on your
But bad news
isn’t the only reason to add HR to your team. Perhaps you landed a big contract
and you need to add 20 people to your service team – yesterday. An important
client wants you to add a second team to support another of their facilities.
An online marketing campaign is bringing in three times the orders your staff
can handle, and you’re starting to get backed up. HR issues can arise as your
company grows because your existing team is just too busy to do it all. Other
times, it’s because you “don’t know what you don’t know” when it comes to HR.
unemployment, new technology, and increasing employee expectations have caused basic
HR processes to become much more involved. Putting thought into what your
organization really needs in terms of HR support can help determine your
long-term HR strategy. There are tactical and strategic aspects of modern HR
teams. You can hire someone to prioritize tactical or strategic HR tasks: however,
it’s difficult and impractical to hire someone to handle both these types of HR
A tactical HR
team member focuses on the manual administrative and technical tasks of HR.
Post job openings
Track and screen candidates
New employee orientation
Prepare and update employee records
Organizing and storing employee data
Ensuring state and federal compliance regulations are
Track mandatory compliance training
focuses on your organization’s growth and long-term HR planning. A strategic HR
staff person is more likely to be part of your leadership team than tactical HR
staff. In today’s competition to recruit and retain the best talent, adding an
HR strategist to your team often makes good business sense.
Company culture development
Employee engagement planning and implementation
Professional development and training
Job description creation and updates
Hiring to develop future leaders
Employee retention plan
Types of HR Employees
You can learn
more about various HR positions through the Society for Human Resources
Management (SHRM) or other sites such as Human Resources Education. We’ll give
you examples of a tactical HR position and a strategic HR position typical in
small to medium-sized businesses.
Human Resources Specialist (Tactical)
Resources Specialist typically has a bachelor’s degree and is early in their HR
career. They are a generalist more focused on tactical HR tasks rather than
strategic HR tasks.
Coordinate job postings, process resumes, and applications, screen job
candidates, perform background checks and conduct initial interviews
Prepare and update employment records related to hiring, compliance,
promotions, and terminations
Conduct new employee orientation by explaining employment policies, procedures,
job duties, schedules, and benefits
and complaints: Address work complaints and harassment allegations, tracks
The U.S. Bureau
of Labor Statistics notes that the median pay for an HR Specialist in 2018 was
$60,880 or $29.27/hour.
Head of People (Strategic)
You can count
on a strategic HR hire to handle the overall administration, coordination, and
evaluation of your HR plans, programs, and goals. This person typically has
five or more years’ experience in HR and a bachelor’s degree. The strategic HR
hire is your organization’s link between employees and your leadership team.
Develop and administer your HR records, plans, procedures, programs, and budget
and manage other HR staff or personnel tasked with HR duties
Develop and manage compensation program, personnel policies and procedures,
employee handbook, employee evaluation process and benefits, and wellness
Develop staffing plan; create and revise job descriptions and employment ads;
oversee all recruitment; develop interview process; and conduct new employee
Develop employee recognition program and professional development plans; manage
employee relations counseling, and conduct exit interviews
Develop corporate culture with the leadership team and recommend new policies,
programs, and procedures based on long-term goals and current HR best practices
Although the paygrade
for this position will vary greatly commensurate of the candidate’s experience
level, the salary for an HR Manager can be used as a point of comparison. The
U.S. Bureau of Labor Statistics notes that the median pay for an HR Manager in
2018 was $113,300 or $54.47/hour.
You may save on
salary costs initially by hiring a less experienced HR team member, but someone
who has been keeping up on HR trends and technology may save you money in the
long run. Rather than focus on hiring when employee count reaches a specific
number, think about who’s handing HR now and whether that time could be put to
better use generating revenue or innovating new products.
HR Outsourcing & Technology
Now that you
have a better idea of what an HR team member can do for you and what they’ll
cost, you may be thinking hiring another full-time person just doesn’t make
sense at this time. Utilizing HR technology and outsourcing HR tasks may be a
more cost-effective solution for your business.
help you to adapt to your changing HR needs as your business grows. Working
with an HR partners also ensures your HR technology will meet the expectations
of today’s tech-savvy millennial workforce. Your outsourced HR partner will
track and provide data to help you better manage all aspects of HR as you grow
your business and your team.
offers the top HR technology and can advise and customize based on your
business needs. Launchways HR technology solutions ensure your business can effectively
handle tactical HR duties such as:
and application portal
scheduling and tracking
Launchways offers fully-outsourced solutions for payroll, benefits administration,
and compliance. Working with the Launchways team ensures all these important
aspects of your business are handled correctly, while freeing up the time of your
leadership team for more important duties.
organization is experiencing growing pains – and ideally before you run into
compliance and other legal issues – it’s time to add to your HR capabilities.
HR duties are many and varied, from time-consuming tactical administrative
tasks to strategic HR planning to help your organization be more attractive to
healthcare industry in the U.S. is uniquely ripe for transformation. It is a
dynamic and growing market with rampant inefficiencies that attracts new technology-savvy
players seeking opportunity. Case in point: Ecommerce giant Amazon recently
entered into a joint venture with Berkshire Hathaway and Chase Manhattan to
enter the healthcare space. Amazon’s health offering will disrupt long-time
insurance incumbents like Blue Cross, United Health Care, Aetna, Humana and
competitive repositioning will force employees to change the way they consume
healthcare (i.e., go to the doctor, fill prescriptions, etc.). Companies that begin
to plan now for this change will have a significant advantage over those that
In this post, we’ll take a look at some of the key factors driving healthcare disruption and outline several best practice steps you can take to position your company for long-term success, including:
Don’t do it alone
Prioritize the disruption
Extend traditional boundaries
Market forces are
accelerating the pace of change
healthcare, progress has moved forward in fits and starts. Overall, however,
the pace of change is accelerating. We’ve already seen consumers shift away
from brick-and-mortar stores in other markets, and it was only a matter of time
before healthcare followed the same pattern.
are accustomed to quick responses, electronic access to information, and the
ability to be more engaged in decision making. With purchasing power tilting
more in favor of consumers, it’s natural that they would opt for more easily
accessible options when seeking the healthcare services and products they
forces that have managed to disrupt other markets—from travel to media to
retail—have so far made only slight intrusions into healthcare. But that is
changing. Big technology companies like Google and Apple are also moving into
the healthcare space, bringing unique capabilities such consumer recognition, extensive
supply chains and powerful analytical capabilities—all backed by vast financial
market entrants adding to the disruption include leading pharmacy retailers
such as CVS and Walgreens, which are integrating their e-commerce systems with
their numerous retail outlets and walk-in clinics to create new healthcare
delivery platforms. All of these efforts seek to address long-time service
delivery shortcomings while leaping ahead of incumbents.
the coming years we can expect a number of industry trends to play a central
role in re-shaping the patient care and healthcare delivery landscape.
Data as a strategic asset. One of the most valuable resources in healthcare is data. Access to data and the ability to leverage that data is essential to creating consumer-centric models of care, improving outcomes, and reducing costs. To that end, many traditional technology players today are building connected tools, wearable devices and healthcare applications, allowing patients to track and monitor their treatment progress and send data back to the healthcare provider. Meanwhile, insurance companies are partnering with drug manufacturers to utilize patient data to personalize patient care and improve the consumer experience.
Better decision making through AI. According to Accenture, the artificial intelligence (AI) health market is expected to grow to $6.6 billion by 2021—a compound annual growth rate of 40 percent. A number of factors are driving that growth:
Patient management. AI tools can help doctors and insurance providers better identify and prioritize patients to deliver the optimum level of resources to minimize costs and enrich patient outcomes. The technology will be instrumental for analyzing large volumes of data to evaluate and develop future treatments.
Diagnostic insight. AI is assisting researchers and doctors in diagnosis and understanding of complex diseases. Case in point: the FDA recently approved artificial intelligence tools to detect bone fractures and diabetic responsiveness in patients, helping to reduce time from onset to therapy.
Labor shortages. AI tools can help reduce the burden of providers performing documentation and data management. They have also proven highly effective in helping triage patients so doctors can focus on patients with the most critical need.
Most health outcomes are the result of circumstances outside the healthcare
system. These social determinants, such as the conditions in which people are born,
live, work and age, undergird many of today’s healthcare challenges. As social
determinants become a greater focus in healthcare treatment and delivery, care
spending is expected to drop while quality of life would improve for impacted
communities. In many areas, this has already begun, as hospitals and health
insurers work with local health departments to identify social determinants and
address community health concerns.
Taking a strategic approach to transformation
With the healthcare
market poised for major disruption, business leaders are rapidly developing
strategies to remain competitive. Disruption is not all doom and gloom. With
the right approach, it can be as much of an opportunity as it is a threat. How
you respond can make all the difference. Following are some best practice steps
that can help you take control of your response effort and better position your
company to capitalize on this market shift.
Don’t do it alone. Working with a
strategic employee benefits broker is essential for gaining an edge and avoiding
obsolescence in today’s fast-moving digital world. Find digital-savvy partners
willing to challenge traditional thinking and make sure your strategic approach
is aligned with market realities. The right broker will ensure your business is
not only poised to adapt to any market changes, but will also leverage those
changes to your business’ advantage.
The scale, the reach and the quality of the experience are three dimensions in
which digital disruptions can be viewed. Your ability to accurately assess
these dimensions can provide important market advantages. How will the disruption
effect your business and your employees? With new value will it bring? What
challenges will you need to tackle? How will it impact other aspects of your
business operations? Disruptions that impact two or more of these elements
should be given priority focus.
Accelerate innovation. To survive and thrive in the digital era,
companies must be able to innovate faster than their competitors. Driving
innovation at this speed requires a culture that encourages and celebrates innovation. Many organizations have little tolerance for
risk or failure, but risk-taking is the lynchpin to innovation. Companies that
encourage creativity, set bold objectives and aren’t afraid of failure are
better equipped to succeed in the face of market uncertainty. While innovation
is vital to your response strategy, ultimately your company’s core goals and
mission should drive your business focus and transformation initiatives.
Carefully examine what
organizational changes your company may need to become more collaborative and
open. This requires an objective and honest assessment of people, processes,
and technologies across the organization. Be prepared to question beliefs based
on history, long-held practices and accepted patterns. Consider why and how
these beliefs are held and assess and weigh current practices to previous
patterns. Set aggressively high targets
that extend traditional boundaries and requires people to think outside the
box. A willingness to break from established practices can open the door to
creativity, allowing your team to see the possibilities often hidden behind the
it comes to pioneering innovation, the healthcare industry presents a paradox.
Although life-changing medical breakthroughs often come about at a rapid pace,
the manner in which healthcare is delivered has been painstakingly slow to
improve. But change is indeed coming and the winners will be those that figure
out how to best prepare for, navigate, and benefit from this massive
The one decision business
leaders need to make when it comes to healthcare disruption is how to respond
to it. Taking effective action will often requires leading a journey into
unfamiliar territory using new tools and processes. Uncertainty is inevitable.
Instead of trying to change that, explore what is technologically possible,
understand the risk-reward tradeoffs, and then rally the best resources to
bring the vision to life.
approach, one thing is certain: disruption waits for no one—there’s no time to
waste in moving from awareness to action.
The key to a healthy, productive business is to build a team
of the right people and to make sure that employees are in the roles that fit
them the best.
Companies commonly make the mistake of hiring employees for
their technical skills and experience, rather than trying to assemble the best
team possible. It is most important to ensure that new hires are great cultural
fits so that they will contribute to the shared work of achieving your company
mission/vision and stay with the company long-term.
At the same time, you cannot build an effective team if you
promote the wrong people into the wrong positions. You need to have clear and
transparent performance evaluations and promotion policies so that you can
identify ideal candidates, help employees fill skill gaps, and maintain team
Both hiring the right people and putting them in the right
positions is necessary for a robust company culture, employee performance, and
retention. While the stakes are high, you can make a huge difference through a
few simple changes in your hiring and advancement practices. Let’s examine each
component in more detail and explore some simple steps you can take to make sure
that you are on the right track.
Hiring the Right People
Why Is Hiring the Right People So Important?
Why is it important to have the right people on your team?
The fact of the matter is that employees are the life blood of your company and
define your company’s success and its culture. If employees are a bad fit for
the company they can drive down their teammates’ productivity, damage team
cohesion, and cause retention problems.
On the other hand, being strategic in who works at your
company enables you to craft teams with an eye for culture, collaboration, and
productivity. This is why it is important to take a hard look at your hiring
procedures. Bringing on new employees is a huge commitment. You need to make
sure that your priorities in the hiring process match what you need to create
and maintain a team of the best people for your organization.
Hiring Mistakes to Avoid
Before we get into what you should be looking for when
hiring, let’s look at some common practices that cause companies to end up with
the wrong people.
All too often, companies hire for skills only. When they see
the candidate with the most experience and technical expertise, they fight hard
to bring them onboard whether or not the potential employee shows any interest
in the company mission/vision or culture. This is a critical mistake that is
easy to make; most employers do hire for skills and experience. However, nine
out of ten times the reason why they let people go is because they are a poor
cultural fit. Why not skip the middle step and only hire people who fit your
Another trap that employers fall into is believing that
employees will change. They know that the candidate is not a good cultural fit,
but they believe that they will start buying into the company culture and
taking ownership over the mission/vision once they join the team. This is not
hard to do; after all, you believe in what you are doing and the culture that
you are fostering, so why wouldn’t the candidate believe too once they had
experienced life in your company? But the sad fact is that most employees
simply won’t change and become a good cultural fit.
Even when they find the perfect candidate, many employers
miss the opportunity to bring them on board because they aren’t willing to work
with the potential hire to make sure that the job meets their needs. Even if
you have a hard budget and cannot make salary accommodations, it is often worth
it to make compromises on vacation time, remote work, and other quality of life
benefits to bring the right people into your organization.
So, What Should You Do Instead?
The most important action to take to ensure that you have
the right people working at your company is to put culture at the center of
every step of the hiring process. Obviously, it is important to hire qualified
candidates. But hiring people who are great cultural fits will do wonders for
employee morale, retention rates, and productivity. Make it clear to candidates
what your company stands for and make sure that they will buy into and add to
your company culture.
You may be wary of scaring job seekers away by focusing too
much on company culture during the hiring process. Don’t be, you want to weed
out people who are opposed to your company culture. People who will buy into
the culture when they sign-on will appreciate your focus on culture and the
efforts you take to make sure they understand what it entails. If a candidate
believes in your company’s values but is put off by how seriously you take your
culture, then this probably isn’t the best person to bring on to your team.
Another factor to take into account is who you put in charge
of interviews and hiring decisions. You want a “true believer” in your culture
handling hiring. So, do not be afraid of bucking seniority to make sure the
right person is in the interview room. Every person at your organization that
touches the hiring process must strongly believe in the company mission/vision
and be a clear representation of your company’s culture.
Proper Promoting: Get
the Right People in the Right Seats
Why & What
As much as hiring the right people is important, it can be
even more important to promote the right people into the right positions.
Emphasize Performance Tracking and Communication
It is important to determine how employees are doing so that
you can be sure that you are promoting the right people. The more objective
your advancement process is, the easier it is to avoid nepotism and other toxic
promotion practices. Transparency not only allows you to find the right
candidates for each position, it also holds existing employees accountable and
empowers you to move people who are a poor fit for their current position.
You can drive accountability by tracking key performance
metrics, setting clear goals, and measuring success against those goals at
every level. By tracking performance in a clear and objective way, you can see
employee strengths and weaknesses and quickly identify candidates for
Another important aspect to consider is feedback and
communication. Objective numbers and goal tracking is great when available, but
a lot of performance tracking and advancement procedures will still have to be
handled by employees’ managers. Don’t feel limited to annual reviews to
evaluate performance or give and solicit feedback. Try implementing quarterly
or even monthly reviews, encouraging feedback at weekly meetings and daily
standups, and asking employees regularly how they want to expand their responsibilities
and advance in the company. Not only will you have a better sense of which
employees are ready for promotion, you will be able to identify which
candidates are right for which positions based on their specific skills and
priorities by tracking their feedback and performance.
Also, letting employees know how they are doing, and what is
expected of them in order for them to be considered for promotion, helps job
satisfaction and employee retention. That means that the same strategies you
use to get the right people in the right roles can also keep them in those
How to Determine Who is Right for Which Position
Just as in your hiring decisions, it is important to promote
people who buy into your culture. Your managers are responsible for making sure
that their teams are run according to the company culture and that their team
members see how their work plays into the company mission and vision. No matter
how many perfect cultural fits you hire, you won’t see the payoff in an engaged,
mission-driven workforce if your managers are not the best cultural fits of
When considering each specific position, it is also
important to promote the candidate who shows a natural intuition for the
challenges and expected results of the role.
Some candidates may be deserving of a promotion, and absolutely ready
for management, but not have the feel for a specific role. You want to promote
someone who ‘just gets it’ and does not need you to browbeat them with what is
expected of them. It can be helpful to consider candidates who have faced
similar challenges before, and can articulate clearly how their past
experiences relate to the position. Mostly, however, this is a less concrete
component of finding the right person; it is often something that you will be
able to feel out during the interview process.
Of course, you also need to promote people who have the
skills and time necessary to take on the new role. Top performers may be
overworked and unable to take on additional responsibilities. Other employees
might be the perfect fit for a role except for gap in their skills or
experience. In these cases it can be beneficial to figure out a lateral move
that will enable them to gain the necessary experience and continue to grow
within the company.
No matter how perfect someone is for a position on paper,
they will not be a good fit for the role if they do not really want it. You
want hungry managers who are eager to prove themselves, take initiative, and
drive their teams forward. People who can come up with out of the box solutions
and get the best results out of their team members because they genuinely want
to make a difference. Within limits, look for the people who have been chaffing
to change systems and strategies or who have started taking on some of the
responsibilities of the new position within their current role because they
care about seeing the job done.
We’ve covered a lot of ground about best hiring and
advancement practices. Here are some key concepts to take away from this
Hire people who will make great additions to your team, not just who are the most qualified
Put company culture front-and-center in the hiring process
Track performance and encourage constant feedback to identify ideal candidates for each position
Promote strategically, again with an eye for culture but also looking at specific skills, experience, and mindsets necessary to tackle the given role
If you implement these principles in the way that you build
your teams, you will see significant improvements in company culture, team
cohesion, employee performance, and turnover rates. Your employees will be
engaged in their work and in the mission of your organization.
CFOs have built their careers on technical skills and financial smarts, but
performance today is no longer solely measured on those abilities. For the
modern CFO, a new set of soft skills built around emotional intelligence have
become increasingly important in recent years for their ability to help
business leaders build relationships, resolve conflicts, and motivate
From understanding and managing emotions to
aligning talent with business needs, the CFO as coach, collaborator and
motivator is a growing trend. In this post, we’ll look at how emotional
intelligence has become a critical skill set for today’s CFO and examine the
five core components of emotional intelligence and the role they play in
helping to bolster leadership performance.
These key components include:
the CFO skill set equation
The skill of emotional
intelligence refers to the ability to identify, use, understand and manage the
emotions of themselves and others in a positive way. For some individuals, the
ability to understand and assess emotions may come effortlessly, but for
others, not so much.
Since CFOs need to be
able to induce change through others, this ability to inspire and influence has
become a valuable skill in today’s collaboration-centered workplace. CFOs need to
be able to respond to divergent points of view and differences in the way
people think. By extension, they need to harness their emotional intelligence
to get through difficult situations.
With fewer layers of management in today’s organizations, leadership styles lean toward less authoritative. Moreover, the shift towards more knowledge-focused, team-based roles means that workers tend to have more independence and self-governance, even with lower levels of an organization. As a result, CFOs are finding themselves connecting and collaborating with people they would not likely have interacted with in the past.
finance function required a number of core skills, including technical
expertise, analytical thinking, comprehension, and assertiveness. While these
attributes may not have changed, today’s CFO also needs to exhibit a wide range
of soft skills, including an ability to collaborate effectively, build
relationships and perceive, evaluate and manage emotions.
emotional intelligence is important to everyday social interactions, but how
does it relate to CFO performance? When you make tough decisions based on hard
data that can have an impact on non-finance departments, you could come across
as tough or inflexible. Not a good reputation for a leader. That’s where
emotional intelligence comes into play.
need drives resurgence
Emotional intelligence first gained
widespread attention back in mid 90s with the release of a book by Daniel
Goleman simply titled, “Emotional Intelligence”. The subject has since been the
focus of numerous studies, many of which point to it being a better predictor
of leadership success than a person’s general cognitive ability. The
reasoning? An executive skilled at understanding what makes people tick can better
motivate teams and drive more effective interactions.
Several factors are contributing
to a renewed interest and growing need for leaders with strong emotional
Market disruption. New and emerging technologies are creating substantial market disruption and business transformation across industry sectors, resulting in corporate restructuring, flatter hierarchies and greater cultural diversity.
New workplace demands. The digital
age and broader enterprise connectivity is intensifying workplace pressures,
creating the need for leaders with greater self-awareness, better emotional
understanding and superb social skills.
need to innovate. Rapid technology acceleration and the
speed of new service deployments requires better collaboration, agile teams and
a culture that allows for continuous feedback, honest communication and individual
empowerment, which are core emotional intelligence-based attributes.
Service-oriented economy. As we move to a more service-based economy and a more customer-centric focus, relationship building, superior communication skills and better self-management abilities become more important than ever.
Globalization. The ability to empathize and relate to different attitudes, perspectives and cultures is essential in today’s global environment. When managed properly, this diversity can lead to higher performance and better outcomes.
A recent report
from World Economic Forum ranked emotional intelligence as the sixth most
important skill needed in 2020 in order to manage the coming fourth industrial
revolution. Emotional Intelligence wasn’t even on the list for 2015. This
may explain why many organizations have begun offering employees more opportunities
to improve their emotional intelligence.
Gaining a performance
According to the model developed by Goleman,
emotional intelligence consists of five core components.
Self-awareness. Self-awareness is knowing your own feelings and understanding your strengths and weaknesses in relation to how they affect behavior. Leaders who are in tune with their own emotions are better able to control their own impulses and tend to enjoy better relationships. To improve self-awareness, take time to better know and evaluate yourself. Then understand how you relate to others.
Self-regulation. CFOs need the emotional flexibility to collaborate effectively without letting egos interfere. Self-regulation is the ability to control outbursts, disruptive impulses, and moods. It also encourages a “think before acting” attitude. Instead of being held hostage by your emotions, learn to use them strategically as a performance improvement tool.
Internal motivation. Internal motivation is the passion to work for internal reasons such as personal joy, curiosity or mental satisfaction. CFOs need to be continuously monitoring their performance, making sure they’re hitting their targets and dealing with issues when they arise. Internal motivation provides the clarity of focus and the drive needed to initiate change and take action while opening the door to positive feedback and learning.
Empathy. Most of us are not taught how to deal with our emotions or the emotions of others. Empathy requires reading feelings and understanding the needs of others. Learning to control your own emotions will enable you to help others manage theirs. By becoming more aware and understanding how others feel in various situations, you’ll be better equipped to inspire, motivate, and connect with others across the organization.
Social skills. Having good social skills and sound situational awareness can be a powerful tool for leading a team. While a clash of opinions is sometimes inevitable in a cross-functional team, the ability to negotiate the needs and viewpoints of others and find common ground is vital for a CFO. Creating the harmony and agreement needed to move initiatives forward hinges largely on the ability to managing relationships.
It turns out cognitive intelligence and
technical skills are an incomplete predictor of performance. The ability to
influence, collaborate, and communicate effectively across departments,
cultures and generations is a key component of effective leadership.
reality is there is a strong link between the emotional intelligence of its leaders
and the financial performance of an organization. Today’s CFO needs to
be both a strategic and tactical thinker. Not surprisingly, hiring
managers are increasingly placing higher value on emotional intelligence and
are incorporating these characteristics in their leadership search criteria.
While technical and financial expertise is important, CFOs can take their performance to the next level by combining financial know-how with emotional intelligence. Like any form of self-improvement, building and strengthening your emotional intelligence will stretch your comfort zone and challenge some long-held notions about effective leadership styles. The good news is the effort you make to improve your emotional intelligence will pay dividends far beyond the initial investment.