Part Five of a series on Ethical Leadership — many more to come.

Have I lost my mind? Honestly — the idea of making the press your friend is obscene!

Hear me out — there is a logic to my madness.

When my team coaches businesses on the inner workings of their business, we ask them to develop a Mastermind group. A group that includes a tax accountant and an attorney. Why? In addition to the visionary participants (marketing/sales), as a business owner you need trusted individuals who will tell you the truth — and don’t have an agenda — because they stick to the FACTS.

Now I will lay all my cards on the table — certain parts of the press are unreliable, sneaky, and downright corrupt (like all areas of business). But there are certain areas of the press who are ethical, forthright, and just. Reporters who stick to the facts and tell it like it is — whether it is good or bad news. Finally, reporters who are in it to report the NEWS and not just get the juicy story.

Those are the people that you sidle-up to and make friends. Why?

Because they are ethical. And they will keep you on the straight and narrow. It is always refreshing to surround yourself with people that will not only massage your ego, but trusted advisers who will tell you the truth AND let you know when you venture into unethical territory.

Now let’s be honest — you don’t have to tell them everything. But if you get a trusted editor or publisher that you meet for lunch on a regular basis, you can be assured that they will tell you what’s on their mind.

And that my friends, is worth its weight in GOLD.

Part Three of a series on Ethical Leadership — many more to come.

In Napoleon Hill’s bestselling book, Think & Grow Rich, he introduces a practice called The Master Mind Group.

As an executive who wants to succeed, you should regularly assemble a grouping of professionals who will help you learn, understand and grow.

They could be an attorney, an accountant, a financial planner, a marketing/pr consultant, etc. At the end of the day, you need a grouping of smart individuals who know their areas cold and can help you with any problem, situation, or opportunity that might arise. You meet with them on a quarterly basis, off-site, usually for a full day (you also pay them for their time).

Let’s look at this idea through a lens to pursue a highly ethical leadership style:
Can you use this Master Mind Group practice to help you maintain (or regain) your high ethical standards? Yes, you can.

Look at the makeup of the group. You need highly reputable professionals that abide by ethical standards in their respective vocations. Now we all know that there are some miscreants who buck the system ethically (we are not talking about them) — we want the best, the brightest, AND the most ethical.

Choose an attorney, accountant, or financial planner of the highest ethical standards . . . Why? Because they will steer you straight ALL THE TIME. Adopt a ‘Definite Purpose’ as an objective to be attained by the alliance, choosing individual members whose education, experience and influence are such as to make them of the greatest value in achieving that purpose.

There isn’t any use in forming a Master Mind Alliance just to have someone to chat with. Your Master Mind will fail if you don’t have a strong motive behind it, and it’s up to you to plant that motive in the minds of the group members. Your allies for this group should be chosen for their ability to help you get to where you are going. Do not choose people simply because you know them and like them.

You want the hard truth — you want these members to steer you straight and give you valuable advice.

When you have established rapport, you will find that ideas will flow into the minds of each of the members and likewise into your own mind. When the Master Mind is in effect, it produces ideas that would not come to your mind alone. I have had that experience many times when sitting in on the many groups of which I am a member on a consulting basis.

But in the end, you want these professionals to keep you on the straight and narrow and to help you when you are pulled into shady territory by investors, the board, your peers, etc. You need a voice of reason to help you navigate these treacherous waters.

I frequently visit the Egon Zehnder International site for their thoughts on Leadership. Here’s a seminal report by Kokkong Chan on rating your CFO:

A Chief Executive Officer in today’s competitive economy can only be successful if complemented by a high calibre CFO. The traditional view has been that the CEO provides strategic direction and leadership to an organisation, whilst the CFO supports him/her with numbers and reports. Subtly, though, there has been significant evolution in the CFOs’ role in that relationship.

In an interesting piece of research by Dirk Zorn of Princeton University, he has found that the CFO role continued to gain increasing importance over a period of 40 years, as a result of various legal, economic and capital market changes. Significantly, the journey from “finance executive” to “CFO” over that time was characterised by greater reliance on the professional judgement, strategic and commercial acumen of the CFO.

The corporate collapses of the last few years leading to recent legislative changes and shifts in corporate governance expectations and the increasing savviness of investor shareholders have further added to the complexity. The tension between governance and leadership has never been stronger. Added to the brew are a myriad of other areas in a CFO’s role that are equally important but have remained out of the headlines.

Consequently, the role of the CFO today can be so varied and broad and expectations so seemingly contradictory that the essence of what constitutes a strong CFO is easily muddied. Yet one of the most important decisions that you will make as a CEO is to select a strong CFO.

I have distilled four key elements for what sets a strong CFO apart from the rest. It includes views of several senior finance executives that we have spoken with on this topic, as well as the views of various external sources.

1. The “intrapreneur” – An “intrapreneur” is someone who constantly seeks to identify opportunities to create value within an organisation. Like an entrepreneurial CEO who constantly identifies and takes advantage of market opportunities, strong CFOs look for internal (and sometimes external) ones. This attribute, referred to by Margaret Johnsson in her piece published in Strategic Finance, requires highly commercial and strategic minds. These people see trends and patterns within the organisation, the effect of external shifts on the company and identifies areas of disconnect that spurs them on to decisive action. They may recognise financial leakages in the form of undisciplined expenditure, or the potential to generate new revenue streams or plug revenue losses that may have been identified by initially attempting to understand a puzzling bit of analysis or the recognition of a trend. Frazer Mackenzie, CFO of Coles-Myer puts it this way, “The CFO has a heavy commercial emphasis – he or she looks for reasons to do things, rather than reasons not to.

This ability is not gained from text-books. Rather it is the consequence of years of experience in honing business judgement – using numbers in making decisions, watching others make decisions, comparing intended to actual outcomes and understanding why.

2. The “Line Manager” - The finance function as a “support” function is fast fading. CFOs that manage their function with a “line mentality” are often far more effective and more valuable to the company. In a company like Qantas for example, the need to make pro-active treasury decisions such as fuel hedging means that there are times when the finance function needs to be more aggressive and assert greater leadership in major corporate decisions. Colin Storrie, Deputy CFO of Qantas describes it like this: “The challenge is to step out of the back-office to proactively helping the business. The modern CFO is not just a custodian, but a value-adder.” A recent study by Booz Allen in the US of 1650 senior finance executives found that fully three-quarters of all respondents believe that focusing on top-line growth will contribute more to earnings than cost-containment. One of the conclusions of this survey was that CFOs played key roles in the company’s growth, and in executing projects that lead to that growth. The line mentality also extends to managing people. Strong CFOs have strong teams. They are motivated because the CFO injects a sense of purpose into their teams, helping them understand that their actions are somehow connected with the top and bottom-line results.

3. The “Confidant” - The quality of trust between a CEO and his/her CFO cannot be understated. The CEO must feel completely at ease to discuss thoughts and ideas, no matter how cursory they may be, with the CFO. Likewise, the CFO must have the confidence in the strength of the relationship, built on mutual trust and respect, to push back for a robust discussion. We asked Mark Fitzgerald, CFO of Crane Ltd, how this works between him and his CEO, and he says, “Greg comes and sits in my office and runs through 20 ideas a week and I tell him if they are good or bad ideas. He uses me as a sounding board, a reality check.” Of all people in the company, it is the CFO who will have the most accurate and up-to-date information about the company’s actual performance. No surprise then that this “reality check” expectation is often associated with them. To what extent this relationship is deepened is largely driven by the CEO. CEOs must feel firstly, the quiet confidence that the CFO is completely on top of the numbers, that there would be no surprises; and secondly, the ability to discuss options and issues in confidence, and receive the value of a robust discussion with someone who is truly a thought-partner.

4. The “Conscience” – This last role has gained the most prominence of late, but is, in the light of all the above, the most problematic. This is not a new idea. All professional accountancy bodies emphasize integrity and healthy skepticism as the hallmarks of the true professional. In the CFO position, however, this expectation is greatly magnified. By virtue of market expectations and professional calling, therefore, CFOs are often seen as the guardians of corporate governance. Yet one can envisage times when this might be at odds with the desire “add value” or be a “thought partner to make it work”. Colin Storrie describes this well when he called it a “conundrum”. He says, “The modern CFO needs to prove that he is not just a custodian, but a value-adder, not just an objective scorekeeper. There is a mixing of the business leadership role with the governance role and it is difficult to balance the two. There is a need to somehow add value whilst maintaining integrity.” The perception that others have of the CFO add to this dilemma. He says, “Anything that you say would be perceived as having gone through that governance mindset. So it is important for CFOs to keep that reputation.” Strong CFOs handle this “conundrum” exceedingly well. Whilst it is often difficult for them to articulate how, our observations have been that they have found in themselves a way to balance out the tension – mostly through years of experience working on various commercial issues that are not clear cut. They have managed to combine the ability to know the extent of “gray” that an organisation should work within, to define a virtual boundary, and then to have the ability to influence others to keep within it.

Of all the people in the management team, the CFO ought to be the “soulmate” of the CEO. The CFO is the repository of actual corporate information. He or she has the regulatory knowledge and the closeness to the business to be able to judiciously use that knowledge to help the CEO form corporate decisions. He or she can help the CEO to greater heights or be woefully unimpactful and unhelpful. How well do you feel supported? How good is your CFO and when was the last time you had a good hard look?

Great leaders translate vision into decisive action — a skill that’s especially vital in tough times. But what are those skills? Do you have a blind spot? Should you be doing more?

First off — great leaders do three things — no more, no less:

1. They motivate their people.
2. They deliver information when required.
3. They help their people with obstacles.

That’s it. As a leader, if you find yourself doing anything else, you’re doing too much. Now let’s look at each one:

They motivate their people.
The most successful leaders are those with the best people skills, especially during the most difficult circumstances. Poor communication and interpersonal relationships routinely thwart leaders who are otherwise technically competent. In order to succeed, leaders must be fully engaged with the individuals who make up their organization. This means an array of capabilities like coaching, mentoring and how to give constructive feedback which reinforces the behavior and motivation of your peak performers. The best tool to learn how to motivate is Dale Carnegie’s: How to Win Friends and Influence People.

They deliver information when required.
What does this really mean? Incredibly efficient two-way communication. And the cruel joke is that most leaders had the chops to make their way up the ladder and succeed — now the skills that got them there (getting things done) have no place in leadership. You now have to communicate to your team to get things done. This is where most C- and VP level executives fail – you need to lead with greater impact by applying emotional intelligence to manage your team. The best tool to effectively communicate is Daniel Goleman’s: Emotional Intelligence: Why It Can Matter More Than IQ.

They help their people with obstacles.
Here’s the mistake all leaders make. When their people come to them with a problem — they spend time helping them brainstorm, choose and sometimes execute a solution. I’ve seen this happen time and time again. Great leaders ask their people to come to them when they have a problem, but they also require their people to come with a solution too. 80-90% of the time, that solution is usually the best one and the team member is further empowered to make those tough decisions. On the off chance (that 10-20%) that your people might be wrong, you’re there to help them investigate other options. For optimal delegation, seek out Michael Abrashoff’s: It’s Your Ship: Management Techniques from the Best Damn Ship in the Navy.

At the end of the day, you need to build a leadership style that creates trust, sets a clear vision and guides your entire team toward greater performance and profit. Give me a call (203.500.2421) — talk to me for 30 minutes — I can help.