‘Everything rises and falls on leadership’

IT IS generally accepted that within any organisation that the finance function is a crucial department and if the finance function sneezes, the whole organisation catches a cold. Therefore, the finance function plays a leading role in the success or failure of an organisation.

Consider whether leadership is required in each of these situations? ◆ Ensuring that the finance function is an effective partner to the organisation, ◆ Effectively developing your line staff by ensuring they achieve their peak individual performance for the betterment of the organisation, ◆ Playing the balancing game of the various stakeholder interests by allocating scarce financial resources. To understand the critical role that financial management plays in organisational success, we must understand why leadership development is important.

John Maxwell stated that, “Everything rises and falls on leadership.”

Leadership has inspired the great kingdoms of old and in modern times, great corporations have risen to spread their tentacles over the entire globe.

Henry Kissinger noted that “the task of a leader is to get their people from where they are, to where they have never been”.

The Industrial Revolution of the 19th and 20th centuries saw the evolution of leadership and management studies. Theories were established to assist industrialists deal with the complexities of a growing workforce.

The three major questions of the day were how to deal with the workforce, increase productivity, and grow the business.

Taylor concluded that “management is a science, not a rule of thumb practice”.

The methods proposed by Taylor and others saw the elevation of the role of managers at the expense of support staff, who were viewed as tools that could be manipulated for one purpose; to achieve the organisation’s goals.

Enter the classical theorists a few years later, comprising Herzberg, Maslow, Drucker and McGregor. They were driven by the objective of finding how organisations could push towards greater productivity primarily through motivation.

The studies evolved from the initial studies of physical conditions to the study of the influences of human behaviour.

During this Information Age, Peter Senge published “The Fifth Discipline: The Art and Practice of the Learning Organization (tLO)”.

He describes the organisation as an organism. Just like life, it can either be growing or dying, never stagnant.

Therefore, the leadership has the role of shaping this growth and future trajectory. tLO is any organisation (function) that understands itself as a complex, organic system that has a vision and purpose.

It uses feedback systems and alignment mechanisms to achieve its goals. The organisation values the role played by the team as well as the role of the leader plays in achieving this purpose and vision.

Two of the key elements he proposed were team learning and shared vision.

All components of the organism had to grow in equal proportions and in the same direction. One leg should not to grow at a rate faster than the other leg. Hence, both legs (leadership and team) have equal value in moving the team forward.

Bill Gates shared his view on leadership when he said, “As we look ahead in the next century, leaders will be those who empower others.”

Rudyard Kipling summed it up best by saying, “The strength of the pack is the wolf and the strength of the wolf is the pack.”

Therefore, you are only as strong as your weakest link. As a Finance Leader, what is your department’s weakest link?

Since the country is repositioning itself to take on a new trajectory, by embracing the “Zimbabwe is Open for Business” mantra, how are you as a finance leader preparing your team to ensure that it can robustly comply with the demands of the global investor community which demand closer scrutiny of financial information and related disclosure requirements, greater accountability of financial forecasts for investment planning, the need for adherence to strict internal controls to ensure protection of their investment in addition to timely and credible financial reporting?

Until next week, ponder the following question: On a scale of 1 to 10, with 10 being the highest level of satisfaction; how satisfied are you with the current performance levels of your finance function?

Would the rest of your executive committee agree with this rating? Everything rises and falls on leadership.

This article was originally written for The Sunday Mail based on research by Lionel Tarumbwa, an accounting and finance enthusiast; and Umoja Phiri, a chartered accountant (Zimbabwe) and a registered public auditor (Zimbabwe) on behalf of SAFiM.

This piece was generated as a source of general information and should not be viewed as a formal professional and legal opinion. Despite the fact that reasonable skill and due care has been taken in the creation of this literary work, SAFiM does not offer any warranty on the accuracy of the information shared.

The information is not intended to replace the need for expert legal opinion on the relevant legal, technical or regulatory provisions. SAFiM does not accept any responsibility for any loss or damage you or any third party may suffer as a result of utilising the information provided herein.