As the propane industry continues to evolve, so, too, does the role of the financial professional. Due to the increasing demands of our work environments, strategic financial leadership has continually been a highly requested topic for speaking engagements, training and content. The concept is exciting — a financial leader who morphs into a catalyst for organizational strategy and change.
The topic resonates with financial personnel, opening their eyes to their full potential to drive impact in their organizations and stand out in their careers. No longer is the financial professional reactive and transactional. The strategic financial leader possesses an expanded skillset to power proactive decision-making to reduce costs, execute on process improvements and help shape the organizational agenda.
The concept of strategic financial leadership is not new and is relatively straightforward. However, while a popular idea in theory, many have struggled to put it into practice. Breaking out of the traditional mold of a financial leader can be overwhelming. What skills are required? What is a good place to start? Where and how should I focus my efforts? Becoming a strategic financial leader is a transformative process that requires time, patience and support.
Throughout my career, working as a management consultant, a chief financial officer and a business owner, I have found few things as impactful as this shift in role mindset and responsibility. I have built a podcast and an entire academy dedicated to the subject, because while transforming into a strategic financial leader is not an easy journey, it is a worthwhile one.
Over the course of a decade of coaching financial leaders, I have identified the following six steps as the key mandates that enable financial leaders to revolutionize their role and the finance function.
1. Know the Business & the Market
Financial leaders of the future are intimately aware of business operations and market dynamics. The propane industry, like many others, experienced significant safety, workforce and supply chain threats in 2020. As forces continue to shift, strategic financial leaders must anticipate customers’ needs, understand the market focus and position and identify the true sources of value.
They must continuously educate themselves on the ins and outs of their business and the market to effectively communicate and pull the levers critical to enhancing holistic business performance. As their purview continues to expand into other functions, the strategic financial leader is well-positioned to problem solve and make decisions with cross-business insights.
2. Simplify Everything
To generate and leverage real-time insights, financial leaders must be able to quickly pull actionable data. Therefore, they cannot be bogged down with complexity. Shifting into the role of strategic financial leader does not mean working twice as many hours. Rather, it requires leaders to streamline operations so they can dedicate more time to value-creation activities.
Seek to remove unnecessary detail from processes and systems and simplify the chart of accounts to limit convolution. Identify opportunities to automate and digitize to build efficiency.
3. Measure What Matters
On a related note, in addition to simplifying processes, a key step in reducing complexity is eliminating unnecessary or duplicative metrics. Over the last decade, an extreme surge in data has resulted in overmeasurement for many organizations. Finance functions are left spending too much time tracking metrics that are often nonessential and sometimes conflicting. Leaders are now responsible for shifting their focus from quantity to quality, identifying the key measures of strategic progress and proposing adjustments based on a narrow set of insightful and impactful key performance indicators.
4. Focus on Relationships
By simplifying and streamlining, strategic financial leaders save time to develop the dynamic blend of financial, leadership and strategic skills critical to success. Research shows that high-performing leaders possess the right priorities, the right people and the right relationships to get things done.
Business functions are becoming increasingly integrated, and financial leaders must engage more colleagues across the organization. A strategic financial leader knows that investing in their relationships with others results in enhanced collaboration and performance. Therefore, they spend time assessing their personal leadership styles. They manage relationships by tapping into emotional intelligence. And they build rapport by offering valuable insights to their peers and colleagues, positioning themselves as business partners rather than financial “cops.”
5. Fight Against Waste
The past year has reinforced the importance of agility. As a good steward of company resources, financial personnel must limit waste and ensure resources are funneled toward the most impactful activities possible. To effectively fight against waste, the financial leader’s role has evolved from traditional, return-on-investment analysis to include understanding the competitive behavior and the multitude of organizational activities.
The modern financial leader is being called to centralize and standardize processes when possible, eliminate non-value-adding activities and focus on customer centricity with the overall goal of making the greatest impact with the resources available.
6. Promote Transformation
Not only will the role of the financial professional continue to transition, but the organization will need to change alongside it. With their strategic oversight and cross-organizational awareness, the strategic financial leader continuously seeks opportunities for positive transformation.