The Importance of Knowing Your Leadership Competencies
Before we begin, I want to define leadership. It’s the ability to guide, direct, and influence people. There are four types of ability that a leader must know about themselves. Those include the following:
- Unique Ability
Know What Your Incompetencies Are
First, you need to know what your incompetencies are. Incompetent indicates the activities that you are not good at and the things that you don’t do well. Everyone is incompetent at something. Some incompetencies could be translating the numbers to something the CEO could use to make decisions, knowing the ins and outs of your accounting system, or working with technology. Before you can start to figure out what you are competent at, you need to know what you are not good at.
Write those incompetencies down. If you are asked to do work in those areas, either defer or delegate. It is not worth your time to invest in those areas when they are not profitable.
Know What Your Competencies Are
Then identify your competencies; these are activities that you are okay at, but the majority of others are better. In other words, the general population is good at that thing. For example, all accountants will know where assets, liabilities, and equity go on the balance sheet.
What Are You Excellent At?
After you have identified your incompetencies and competencies, then ask yourself… “What are you excellent at?” This refers to the activities that you excel at, but so do a few others. If you have a knack for knowing where to unlock cash after just looking at the financial statements, then it may be time to focus more of your energy there. Not everyone will have this skill though.
Know Your Unique Ability
Finally, know your unique ability. Your unique ability are the abilities only you possess. These are activities that drive value for yourself and others. In addition, your unique ability must be valued by society.
Strategic Coach outlines the four areas that you need to look at when identifying your unique ability:
- Superior Skill
- Never-Ending Improvement
Inventory of Role
If you want to be really effective as a CFO and a financial leader, then you need to know what you are already doing and what your CEO wants more of. In our Financial Leadership Workshop, we walk our participants through an extensive inventory of role. Some of the areas that CEOs wants more from there financial leaders include:
- Serve as a sounding board for new ideas
- Fund the growth of the company
- Provide solutions rather than identify problems
- Improve productivity
- Provide financial leadership to all functions in the organization
The Role of the CFO
While the CEO must balance the vision, growth, implementation, cash, and profitability of the company, the role of the CFO is to compliment the skills and unique abilities of the entrepreneur. You would not find Steve Jobs or Jeff Bezos in the accounting department, but they sure need(ed) support from their financial leader to make innovation happen.