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CFOs and their teams are facing a dilemma today. The dilemma is how to embrace the traditional strengths while, at the same time, adopting disruptive leadership strategies and techniques. Can CFOs balance tradition and disruption?
Some believe these concepts are contradictory and that an organisation can choose traditional methods or adopt disruptive leadership. Yet, you shouldn't think of it in terms of traditional vs. disruptive leadership.
Instead, consider it a balance of current and former processes while innovation drives procedures forward.
What does that look like? Let's break down what disruptive leadership is and what it means to consider traditional over disruptive strategies and vice versa.
Disruptive leadership is a progressive approach to leadership. It refers to executives who find that traditional management methods don't work in an ever-advancing digital world. It requires a mindset focused on the positives of business disruptions as companies integrate new technologies into existing systems.
The functions of finance are gaining further importance while advances in fintech impact how companies manage revenue and cash flow.
Finance disruption leaders must instill a disciplined approach regarding innovation efforts. They hold on to conservative approaches while taking risks and challenging the status quo.
Historical reporting activities will continue to be vital, but require less time due to improved efficiencies from automation, consistent data and end-to-end reporting systems. It will require finance teams to shake up processes and leverage increasingly advanced technologies.
Traditional leadership bases its style on the belief that those in power keep up with past procedures and policies, even if they are ineffective. It also rewards seniority over skills, meaning people earn promotions not on merit, but based on office politics and favoritism.
This style does nothing to cultivate a work culture focused on development or expansion, rather it maintains toxic work environments that do not foster growth.
To foster growth, you must facilitate change.
This requires a disruptive leader to step up and be the driving force to initiate this change. Someone with the wherewithal to take what works with traditional methods, to eliminate what doesn't and to accelerate strategies that balance tradition with disruption.
Traditional leadership makes decisions without utilizing or considering insights from the people reporting to them.
Disruptive leadership uses emotional intelligence (EQ) to develop new business strategies and to mobilise and empower top team members while creating even more space for disruptive leadership.
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Source: People Puzzles
Thought leader and disruptive leadership expert John Furth works with CEOs, CFOs and other C-suite executives to develop disruptive strategies that result in growth.
Over the last 25, Furth has worked with large corporations to develop disruptive and innovative leadership teams. Furth states, "Disruptive leaders like Jeff Bezos and Elon Musk have transformed companies… while generating incredible wealth for themselves [and] their investors."
His time with these disruptive leaders has taught him that they carry many of the same common traits:
Their friends often refer to them as "brainiacs." While not all have advanced degrees (some business disruptors have never finished or even been to college), many have a Ph.D. from highly ranked universities. Whether educated or not, they all have a commitment to a lifetime of learning.
Disruptive leaders are not afraid to push accepted boundaries. However, discretion is necessary to keep from destroying everything they and their teams are working hard to build.
A smart CFO will not only push boundaries within the company, but also disrupt their own mindsets to focus on agility and innovation over static processes.
Disruptive leaders in finance are smart CFOs who recognise that data does not always come from traditional sources. They seek insights, information and inspiration in unexpected places.
If you are a smart CFO, you recognise that traditional data sources are, by nature, backward looking, providing a limited view of overall value.
Great disruptors will always ask exceptional questions and listen carefully to every answer. They never know when useful insight could come from an unexpected source.
Not only are disruptive leaders not afraid to ask why, but they stick around for the answer. Smart CFOs are solutions driven and constantly questioning current processes, business decisions and how to approach new opportunities.
Curiosity leads to exploration and growth. You can remove roadblocks by asking why, provide potential inputs on what to improve in the future and gain clarity when making new decisions.
A smart CFO will understand that disrupting an existing ecosystem will cause significant short-term, adverse effects. Companies that cannot remain agile go out of business. Preparing for these temporary disruptions is part of the core competencies seen in disruptive leadership.
The responsibilities of the CFO are changing. There is pressure to be more than a leader reporting on the company's historical financial performance.
As the adoption of new technologies and better practices prevail, the CFO leads business strategies and guides future integrations, taking on the role of Chief Future Officer.
