Retargeting Talent Acquisition Objectives for Financial Executives
The competencies personified by today’s top financial executives are far different than what was required twenty years ago. Ledgers have been replaced by spreadsheets, databases have cleared out filing cabinets, and dashboards make it possible to monitor performance contemporaneously. What impact should these innovations have on the talent acquisition and development strategies for accounting and finance executives?
As the Peter Principle suggests, demonstrating proficiency at one level of an organization provides little assurance of success at another level. Having the ability to add, subtract and crossfoot a ledger does not demonstrate the business acumen required to determine the appropriate capital structure of a firm. In many ways, technological and occupational evolution have made previous experience at lateral levels equally irrelevant. Once accounting processes are fully automated a manager’s role in the data collection process may be very minimal.
Recognizing that previous performance is often not a good indicator of an individual’s ability to succeed in a new role, HR professionals have responded by deemphasizing the importance of past performance and have focused instead on the competencies relevant to the position being filled. This forward looking methodology is a far superior tactic, but still proves ineffective in today’s complex and ambiguous environments. An approach that made an employee successful yesterday could be entirely ineffective in tomorrow’s work environment. Managing bookkeepers requires a significantly different management style than managing programmers.
Keeping in mind that the role of financial executives is to use information to make more effective decisions, the challenge becomes finding individuals whose business acumen is enhanced by these technological innovations. Claudio Fernández-Aráoz, one of the world’s most influential executive search consultants, published an article in the June 2014 edition of the Harvard Business Review that I believe addresses this challenge.
Fernández-Aráoz proposes that a static approach to talent acquisition will never keep pace with today’s dynamic business environment. He suggests that any strategy that focuses on skill sets or competencies will be quickly antiquated. Rather, he proposes an agile approach to talent management in which recruiters seek out candidates with the potential to adapt to changing conditions.
Rather than focusing on what a candidate has done previously or even what they are capable of doing today, he suggests focusing on what the candidate can learn to do tomorrow. Identifying transferable skills continues to be important, but what has the candidate been able to do with those skills in new situations? The best candidates are no longer square pegs that fit neatly into square holes, but fluid materials that can fill a myriad of voids.
He seeks out candidates that demonstrate curiosity, insight, determination, motivation, ambition, engagement and personal humility. These are traits that are indicative of individuals that have a passion to excel, can confidently face new challenges and work well with a wide range of people. In focusing on these personality traits, rather than on skills or competencies, Fernández-Aráoz has been able to help his clients develop pipelines of top talent for their organizations.
Equally important is the organization’s talent management strategy. Rather than pushing high potentials up a straight ladder, he encourages a development process that caters to the same qualities that made the candidate attractive in the first place. Provide them with uncomfortable assignments, preferably outside of their primary area of competence. Peak their curiosity, help them learn, show them that there is still room to grow in the organization. This will not only accelerate the development of your high potentials, but it will peak their interest and thwart competitors from snatching your talent.
Corporations of all sizes are facing an increasingly competitive environment and poor financial decisions will render any firm unsustainable. Organizational, technological, regulatory and economic conditions will require increasingly dynamic financial executives. The demand for qualified accounting and finance professionals will unquestionably be growing at an accelerated rate. The recruiting and talent management strategy for a company’s finance department has to transcend its existing needs by developing a pool of candidates capable of meeting tomorrow’s challenges.
Benjamin Podraza, CPA/PFS, MTAX, CGMA
October 19, 2015