CFOs crave soft skills, but aren’t providing training

I caught the following tweet recently, and it reminded me of my most recent blog post on a survey that found finance people lacking in “value creation” skills:

The tweet links to a story that is based on a survey conducted by Robert Half. Here’s the actual survey release.

The first thing you notice is three out of ten say a lack of soft skills is the biggest factor holding back finance professionals from advancement. Okay, that makes sense.

Strangely the next question asks where training is planned, but apparently only allowed one answer. It really should’ve allowed more, because companies can provide training in multiple areas. Respondents probably picked the area receiving the most attention, which might explain why soft skills garnered only 19% of the vote.

I had several paragraphs written where I speculated on why soft skills weren’t getting training dollars when clearly there is a need, and now that I analyze the poll questions themselves, I can’t use them!

However, I do wonder if “poor interpersonal skills” is code for something else? Maybe a culture fit issue? Maybe some other career-limiting move? Sometimes it might be the other person who lacks people skills, and is projecting!

Finance managers are human

CFO.com has brought to my attention a survey conducted by the CEB of finance managers. They asked finance managers whether they believe their direct reports are “effective in the behaviors and skills that drive excellent performance by the finance function.” The title of CFO.com’s article gave away the answer: Finance Leaders Bemoan Talent Shortage. Not only that, but they’re good at the stuff that sucks and suck at the stuff that’s good:

And on average, finance workers are more skilled in the areas that have the least positive impact on value creation.

You know how everyone likes to think they’re above average? Above average driver, above average intelligence, etc.? This is that. Finance managers believe they’re above average at their jobs, therefore those around them are likely below them, and possibly even below average. It’s OK. They’re human.

I also think there’s an element of confirmation bias at play. They’re finance managers, so they must be above average and have the skills and behaviours that the survey indicates is important.

But back to those hapless direct reports: First, who hired them? If it was those selfsame finance managers, shouldn’t that reflect poorly on their ability to assess competence and develop talent? Whose responsibility is it to put in place succession and training plans? (HR’s, they’d probably say, if surveyed about it.)

Overall, finance managers appear quite dissatisfied with the talent levels on their teams. [The CEB] acknowledges as much. “We weren’t particularly surprised that the ratings were so low,” she says. In fact, she adds, one reason CEB did a report on talent is that when it conducted its annual interviews with CFOs last year, 85 percent said talent was a major concern.

I’m not surprised either. This is never going to stop, until robots run companies completely. Even then we’ll probably sneak a “dissatisfied with direct report talent levels” easter egg into the code, just so robot CEB surveyors can have something to write about. What a chilling dystopian vision; I think the living will envy the dead.

Mercilessly, it continues:

Effective delegating is a capability many finance departments sorely need. “After the financial crisis, finance is overwhelmed with ad-hoc requests,” the report states.

If you’re delegating to staff that you don’t have (because they were all downsized during the recession), it isn’t going to be very effective. Perhaps that’s the reason they’re feeling overwhelmed?

There’s a reason why great people are hard to find: they’re scarce. And once found, smart managers do everything they can to keep them. As well, it’s highly likely those yearned-for “persuaders, strategists and builders” recognize a good situation when they have it. Perhaps that’s the most important takeaway here for finance managers. Build it, and they will come.

Google’s 20% time at accounting firms?

It’s well known that Google encourages their employees to spend roughly equal to one day per week pursuing personal projects, or about 20% of their time at work. The results of this unique policy are numerous and successful: Gmail, Google Suggest, Google News, AdSense and Orkut.

Google logoWhat would happen if an accounting firm allowed their knowledge workers to devote time to personal projects? Would great new ideas surface for snagging new clients, serving existing clients in better ways, or improving processes within the office? I think they would, but it would definitely require some discipline to set aside that much work time away from client work.

I think the benefits from this type of system could be achieved at an accounting firm without needing 20% of available working hours. All that is needed is a method for sharing the ideas with everyone in the organization and a loose structure for obtaining approval to put the idea or plan into action. A wiki on the intranet would be simple to set up and, since they are editable by anyone with access, enable everyone to participate right away.

Google describes “the engineer’s life at Google” with reference to the following pledges:

We listen to every idea, on the theory that any Googler can come up with the next great one.
We provide the resources to turn great ideas into reality.
We offer our engineers “20-percent time” so that they’re free to work on what they’re really passionate about.

I think it would be a bigger challenge to create the type of environment that Google has meticulously cultivated since its inception at an established accounting firm. It’s all too easy to keep doing things the way they’ve always been done, not unlike following last year’s audit plan, in firms. But I believe great things can be accomlished by a firm willing to break out of the mould and take the cue from Google.

Global ethics and international accounting standards

The Publish What You Pay campaign is where international politics, financial reporting, and the developing world intersect. The campaign seeks to force companies in extractive industries (such as oil and gas) to make public their payments to governments in the developing world.

It began in 1999 with an “exposé of the apparent complicity of the oil and banking industries in the plundering of state assets during Angola ‘s 40-year civil war. It became clear that the refusal to release financial information by major multinational oil companies aided and abetted the mismanagement and embezzlement of oil revenues by the elite in the country.”

The campaign is supported by numerous charities and political organizations such as Oxfam Great Britain and Human Rights Watch. They lobby bodies like the World Bank and IMF, as well the IASB, the International Accounting Standards Board.

Publish What You Pay calls for an International Financial Reporting Standard for the extractive industries to include a requirement that extractive industry companies disclose in their accounts all payments that they make to the governments of countries in which they extract resources, and to agencies or representatives of those governments.

Sounds like a good idea to me. It’s actually surprising to me as a young idealist that this isn’t already part of international standards. But the most recent letter sent from PWYP to the IASB on the matter expresses the campaign’s consternation with the IASB’s actions to date, and I have to agree.

The IASB’s proposed standard leaves segmentation up to management’s discretion, rather than mandating country-by-country grouping. The standard is barely even that – it basically just codifies laissez-faire.

I’m dismayed to say the least by the lack of support this has received from the Board thus far. In a few years I will be working primarily with IFRS as Canadian GAAP converges. I’d like to see a greater sense of urgency on their part in matters of this importance.

The PWYP letter smartly points out “companies already need to generate [country-by-country segmenting] in order to complete tax returns in each country of operation, this should not prove an additional burden.” They also use the lingo: “The citizens of [poor yet resource-rich] countries are important, if non-traditional, users of financial information.”

This is one of those areas where the IASB could showcase those pervasive qualities in public accountancy like ethical conduct and protecting the public interest.

Building and rebuilding in the GTA

The Toronto Star has two stories on their front page today about development in Toronto and the surrounding area worth noting.

The West Don Lands development is a community being built over derelict industrial buildings east of downtown. And Vaughan’s proposed corporate centre and downtown is an idea that is seeing the light of day because of the recently announced TTC expansion into the city.

These are exciting developments to me for different reasons.

The downtown residential and commercial Don Lands project appeals to me because it’s reclaiming some prime land that has gone unused for too long in a great location, and it’s the first step to truly revitalizing Toronto’s waterfront.

I’m excited about the Vaughan idea because it just means more business in the area, and more business is good for the economy. It remains to be seen, however, if Vaughan is willing or able to make the necessary investments in public infrastructure.