As 'happy staff' generally equals 'significant expenditure', one might expect tensions to develop between the two.
However, the best FDs are actually those who are most effective at nurturing strong relationships with internal and external stakeholders. While a calculated approach to the financials is necessary to keep CEO and shareholders happy, FDs should realise that healthy relationships are indirectly at the heart of keeping a business ahead of its competition - and ensuring its long-term survival. In fact, the best FDs have much more in common with HRDs than you might think.
The usual image of the FD sitting behind a closed office door is becoming a thing of the past. In a recent BDO study, Hot 20 FDs in TMT, there isn't a single FD who does not operate an open-door policy to their finance team. Many elect to sit within their team in an open-plan arrangement and to promote a non-hierarchical working structure.
Coaching and mentoring is also becoming far more important. FDs are increasingly taking on the role of coach and mentor themselves, effectively bypassing the need for HR intervention within their teams. Helping staff develop to the best of their abilities not only rewards the business with a skilled finance team but, by developing existing employees and promoting staff internally, the firm can save on recruitment costs.
Most FDs relish the opportunity for developing staff as a core part of their role. Mark Lightfoot of Chess Telecom takes pride in seeking to promote existing staff rather than recruit externally, while Dave Wilson of GB Group says one of his proudest working achievements is that five young accountants he coached have since become CFOs or CEOs themselves.
The most successful FDs are also effective at managing their upwards relationship with the MD or CEO. Chief executives can be domineering characters and, often caught up in the excitement of the company's plan for growth, need a good FD not just to help them deliver their strategy, but to bring them back down to earth.
Superior people skills are not traditionally associated with making an FD stand out, but they should be. Being a numbers wizard alone is not enough: being able to mentor, mediate and coach is just as important as ensuring the books balance.
Andrew Fabian from Statpro defines this perfectly: "The FD's role is not to say no - it's to say yes to the right things and no to the wrong things." For example, a CEO might see a competitor make a large acquisition, and think he should do the same to keep up. A good FD would give it careful consideration and look at the alternatives. Delivering the verdict in a way the CEO accepts requires skill and an empathetic understanding. Sometimes, the FD even has to make the CEO believe they came up with the idea in the first place.
Indeed, it is this empathy that allows FDs to transcend their stakeholder relationships and singles them out as 'great', rather than merely 'good'.
Julian Frost (pictured) is lead partner and national head of technology, media and telecoms at BDO
