Finance Leadership: Creating a culture that supports open dialogue

Many years ago when I served in industry, I was part of a large team charged with the task of designing and delivering an ERP system to replace a number of legacy systems.  The project was enterprise-wide and, accordingly, incorporated talent from the business units and support staff.

There was one meeting in particular that has stuck with me over the years.  Many of us were in a conference room discussing the design and the various attributes the system should have.  It was a great discussion with many people contributing and the ideas flowing freely.  It was a great example of how collaboration across business and functional units should occur.  And then it happened.

One of the company's senior executives walked in.

The tone of the room changed instantly.  It was as if the room temperature dropped 10 degrees (fans of horror films will understand the implication).  The problem was that this particular executive had a reputation for undermining his people.  He would say one thing to you privately and when the political tide changed he would reprimand you publicly for doing exactly what he told you to do.  And the people learned very quickly that they should not take risks around him.

In the conference room, that's exactly what happened.  Everyone became quiet and only spoke when the executive asked them a direct question.  And even then it was just the facts and nothing but the facts.  No more creativity and no more ideas.

As you read this you might scoff and shake your head at such non-productive behavior, but my question to you is this:  If you're a leader in your Finance organization, what are you doing to encourage risk taking and idea generation?  Do you create a safe environment for your people to take risks?  Are you sure?

Effective leaders, whether they have the title of leader or not, are people who understand that they and their company can only succeed when the people around them are able to take calculated risks without the fear of failing.  That doesn't mean that there are never consequences for failing to meet expectations, but it does mean that people are safe to create and explore new ideas.  It the role of a leader to shape that culture.

What are you as a leader doing to create a culture where people are free to explore ideas?  What are you doing to stifle it?

Four Leadership Qualities Few Leaders Possess

Tony Schwartz has an interesting post over at Harvard Business Review titled The Four Capacities Every Great Leader Needs (And Very Few Have).Here's a summary of the four points:

1. Great leaders recognize strengths in us that we don't always yet fully see in ourselves.
2. Rather than simply trying to get more out of us, great leaders seek to understand and meet our needs, above all a compelling mission beyond our immediate self-interest, or theirs.
3. Great leaders take the time to clearly define what success looks like, and then empower and trust us to figure out the best way to achieve it.
4. The best of all leaders — a tiny fraction — have the capacity to embrace their own opposites, most notably vulnerability alongside strength, and confidence balanced by humility.

If you're a leader in your Finance organization, how do you score on these four points?  In my experience, most leaders are weakest on point 4.  For all the talk of diversity, I've met relatively few leaders that really seek out alternate opinions and encourge debate.  Far more likely is the leader who surrounds himself or herself with people who create an echo chamber, simply agreeing with the boss.  Of course, many people do this because it's the sane thing to do.  They live in a culture where debate isn't encouraged and could even be punished.

So, as a leader in your organization, what are you doing to encourage debate?  How do you let people know that it's safe to discuss ideas?  And how do you nurture and cultivate ideas that are generated through this process?

Deciding on the Composition of the Shared Services leadership team

When forming a Shared Services Organization (SSO), it's essential to create a governance structure that provides oversight and guidance to the new organization.  Part of that governance structure is the Steering Committee which has overall responsibility for ensuring that the SSO fulfills its mission and is properly funded.

In creating an effective Steering Committee, the composition of that Committee is extremely important.  It's essential that all major stakeholder groups have representation of the Committee.

• Senior customer representatives. From the beginning, an SSO should be a partnership between the SSO and the customers it serves.  This means that the Committee should have senior representatives from the major lines of business.  A good rule of thumb is that if you view the business as a reportable segment for SEC reporting purposes, or if your internal management reports segment the business a particular way, then a senior representative from the operations of that segment should have representation.
• Leaders of key functions in the shared services.  If the SSO focuses on a single discipline such as Finance, than a leader from that group should represent them on the Committee.  It's becoming more prevalent to have a multi-function SSO, so a representative from each group, such as Finance, HR and Procurement should have representation.
• IT.  Whether an SSO is regional or global, IT plays a critical role in supporting the processes of the SSO.  It's essential that IT initiatives support the broader business initiatives.  Representation on the SSO Steering Committee will enable tight integration between the evolution of the SSO and its ability to support that evolution with existing and future IT investments.

Through all of this, the representatives on the Committee must have the organizational and moral authority to lead the SSO and to ensure that it is properly funded and staffed.  When this occurs, the SSO will have the governance structure needed to fulfill its mission and to continue adding value throughout its existence.