With competition being high among candidates in all sectors, developing the right skills at every stage of your career is crucial. But what can you do to make yourself a prime candidate if you're a Financial Director (FD)?
A Director of Finance occupies a critical and influential role within a company, responsible for driving financial strategies, providing expert advice, and ensuring fiscal stability. Their expertise extends far beyond crunching numbers, requiring a combination of hard and soft skills.
People in this role can no longer rely solely on their qualifications to make them a lucrative target for potential employers. FDs need to develop specific skills if they want to stand out among their competitors.
Here are nine critical skills for Finance Directors:
1. Analytical thinking
Analytical thinking is a crucial skill for Finance Directors because it allows them to interpret complex data and make sound financial decisions based on that data. This analytical ability is particularly important in their role as stewards of their companies' resources, as they must be able to analyze a company's financial health and identify any potential risks or opportunities.
Additionally, with the industry's continual evolution due to new technology, the ability to adapt and understand these changes requires strong analytical skills. Thus, mastering analytical thinking can play a vital role in a Finance Director's ability to guide their organization's financial development and strategy effectively.
2. Ability to multitask
Due to the wide range of responsibilities they hold within an organization, it's critical that FDs can multitask. Financial Directors often find themselves managing multiple tasks simultaneously, such as overseeing financial planning, managing cash flow, and evaluating financial performance. These tasks often overlap and require a balance of attention.
However, it's also crucial to note that multitasking should be managed effectively to avoid mistakes, as errors in the financial domain can have serious implications. The aim should be to switch between tasks efficiently, rather than doing many things at once, to ensure accuracy and productivity.
3. Compliance and regulatory understanding
With finance and strategy being at the core of every FD's role, it's a sound assumption that you need to have an in-depth understanding of compliance with regulations that could affect these fields in the near or long-term future. Financial Directors are now more than ever having to apply these skills to help the company make the most of opportunities and identify any potential threats.
4. A strategic mindset
FDs need to be competent advisors to the rest of the company, especially the CEO or CRO. This makes it essential that they have a comprehensive understanding of the business's wider strategy and how its finances will impact their opportunities in the future. Not only does this mean familiarizing yourself with the business model, but also looking into how the different elements of the company complement or cause friction with each other. They need to be able to review financial reporting, interpet what this data means and then apply it strategically to business decisions.
The role of FD is unpredictable due to the often volatile nature of financial markets and business environments. Being resilient allows FDs to navigate through stressful market conditions while maintaining a healthy cash flow for the organization.
Being resilient also helps them to manage the constant pressure of such a role. It improves their ability to adapt to change, lead the company through turbulent times, and learn from crises. Moreover, a resilient Finance Director can think long-term, overcome barriers, and focus on building a robust financial function, rather than just concentrating on revenue. This, in turn, ensures the organization's financial stability and success.
6. Ability to communicate with company stakeholders
As companies become more collaborative, Financial Directors will need to master soft skills as much as the legal and compliance-related requirements of their role. This means they need excellent communication skills. Being able to converse with diplomacy and tact, while effectively communicating your own priorities and concerns, is therefore a valuable interpersonal skill in FDs.
7. People management and talent retention
Employee retention and acquiring the right talent has understandably become a top business priority in recent years, and FDs are no exception to this. Being able to keep your most talented finance professionals and identify the candidates that will best complement or even expand your organization are the type of leadership skills that are essential for remaining competitive. For Financial Directors, there's another priority too, as recruitment and retention are directly linked to how and where the business is able to make investments in the future.
Confidence is an essential trait that aids in various aspects of the FD role. It helps them communicate effectively with leaders and stakeholders, whose judgment of the company's financial stability is often based on their trust in the Finance Director.
Moreover, a confident financial director will be able to deal with challenging situations, such as the loss of clients or key employees, with a more positive outlook and effective problem-solving strategies. It aids in managing conflict, improving communication skills, and fostering a happier work environment. Most importantly, a confident Finance Director can inspire trust within the team and across the organization, thereby promoting a sense of security and reliability.
The ability to seek feedback, learn from failures, and avoid self-judgment, which are all hallmarks of a confident individual, are crucial for a Finance Director's continuous growth and effectiveness in their role.
9. Data integration
More than ever, companies all over the world are realizing the importance of data. Whether this is internal or from your customers, FDs need to understand what this data means and how it will impact business decisions in the future. It's also crucial that the organization understands the data they collect, store and delete from employees and clients. For Financial Directors, this will mean liaising with other specialists to allow for the most accurate fiscal reports or projections.
A Director of Finance needs to embody a set of key traits to effectively navigate the complex and volatile financial landscape. Resilience is paramount, as is the ability to communicate with company stakeholders, approach problems with an analytical mindset and understand complex financial data. All of these traits help successful FDs to manage stress, adapt to change, and learn from crises to ensure the company's financial stability.