Essential interpersonal skills for senior finance professionals
Navigating the complex human dynamics that underpin stakeholder engagement and organizational success can be key for mid-career professionals looking to move up the ranks.
By the time you reach the mid-point of your career in the finance industry, you are likely to have developed considerable subject matter expertise and analytical skills.
But moving to the next step on the career ladder often requires a different set of interpersonal skills, according to Lucy Standing, an occupational psychologist and Founder of Brave Starts, an online community and structured coaching platform for experienced professionals.
As senior finance executives take on broader roles, they are expected to act as strategic partners, drive collaboration across matrixed, multi-generational and multi-cultural organizations, and interact with high-level stakeholders. Without the ability to influence, negotiate and have difficult conversations, they may find it challenging to get buy-in, lead change or drive performance.
“You need to be able to build productive relationships where people trust you,” said Standing. People may often not have direct knowledge of the depth of your competence in your field, so the deciding factor in whether they decide to trust you may be how you make them feel, she added.
Keeping it simple
Much of this boils down to communicating clearly and strategically.
Dan Whitehead, Founder and Career Coach at City Career LAB, said: “Whether it’s for the people working for you, clients or board members, it’s how you distill some of this complexity down into understandable concepts and bring them along for the ride.”
Communication and other interpersonal skills have become all the more important in the era of artificial intelligence (AI). The insights derived from data science and AI are only valuable when combined with effective communication and collaboration to drive change.
For Standing, the ability to win people over is something you can work on.
“Personality is relatively fixed, but attitudes are changeable,” she explained. “For example, someone who is highly extroverted is more likely to enjoy and get energy from going out and meeting new people. But whether they can charm them depends to a large extent on whether they have enough self-awareness to ask questions and actually listen to the responses.”
Some people may be more inclined to speak up than others, she said. “But the skills around learning, asking questions and not barreling people with all of your knowledge and insight — those are all things that are 100% developable.”
Harnessing emotional intelligence
Scott Taylor, Professor of Organizational Behavior at Babson College, has spent much of his career researching how firms assess and develop their leaders to determine which approaches work best and to develop new ones.
In his research spanning more than two decades in several countries, Taylor has identified one quality particularly associated with outstanding leaders: the ability to create a positive emotional environment. Emotional intelligence — the ability to recognize and manage emotions and their implications in yourself and others — is critical to good leadership.
“That doesn’t mean that they don’t have a bad day or get frustrated,” said Taylor. “But overall, they create a positive, energizing environment.”
The perils of not doing that are clear.
“If they create an overall negative climate — high stress, threat, fear, antagonism, anxiety — they suppress innovation and creativity. So, if a leader comes in and says, ‘we’ve got to solve this problem, everybody’s getting fired if we don’t,’ they’ve just shut down the innovation and creativity that they need to solve the problem.”
Taylor has two vital ingredients for creating a positive environment: self-awareness and empathy. While internal self-awareness, or how you see yourself, is well-known, external self-awareness, is often neglected. An understanding of how others experience you, he said, is essential to good leadership, but requires honest feedback.
“In an extreme case, I might think I’m being visionary and inspiring, and they think I’m being controlling and manipulative,” said Taylor.
Building a feedback loop
Leaders often find it difficult to gather honest feedback about how their leadership affects others.
“We call it the ‘CEO disease’,” said Taylor. “The higher up you go, the harder it can become to tap into that. Because of the deference for hierarchy, people tend to tell you what they think you want to hear, rather than what you really need to know.”
The popular method for soliciting feedback on senior professionals and leaders, the 360-degree review, has been criticized as focusing too much on internal states and being prone to manipulation. Suggestions for improvement include shifting the focus to soliciting actionable insights on behavior and using AI to spot attempts to game the system.
The other core component of emotional intelligence is empathy. “Empathy is not sympathy or compassion,” said Taylor. “It’s listening to employees, taking to heart their feedback, and understanding their perspective.”
This kind of empathy is integral to coaching and mentoring — skills that are acknowledged as having become more important in attracting and retaining talent all over the world.
Paths to personal development
There are many ways for mid-career finance professionals to improve their coaching and mentoring skills, along with the other interpersonal skills needed for effective leadership.
They can enroll in a leadership development program or work directly with an executive coach for personalized guidance. They can also find ways to get practical experience in the flow of work and look into mentoring opportunities through their local CFA Society®.
Peer learning and cross-functional collaboration can also be effective. By working closely with teams in adjacent functions, professionals can gain exposure to diverse perspectives and learn to adapt their communication and influence styles accordingly.
Interpersonal skills do not necessarily have to be cultivated in industry-specific contexts. Even mindfulness and emotional intelligence workshops could help build the self-awareness and resilience needed to manage stress and lead well.
AI-enhanced growth
Interpersonal skills have become especially crucial at a time of rapid AI-driven disruption. Fortunately, AI also has a powerful role to play in cultivating them.
Maxim Tambling, Head of Global Talent Management Vanguard, said his firm is on the verge of introducing an AI agent that provides leadership coaching, following the completion of a successful pilot.
“It’s an agent designed predominantly to answer the coaching questions of first-time people leaders on the breadth of topics that often come up for those stepping in to management roles,” he said. “For example, how they should conduct a performance management conversation or how they can bring up specific concerns with crew members. The AI agent asks them questions to explore the context and then provides relevant guidance and support.”
AI can also be used to create role-play scenarios for professionals to practice skills like decision-making, empathy and persuasion in a safe, low-stakes environment. In doing so, AI can gamify the development of arguably the most critical skill for leaders in today’s ever-changing world: adaptability.
Adaptability is underpinned by a host of interpersonal skills. It requires communication, teamwork and problem-solving, and is bolstered by qualities like open-mindedness, curiosity, creativity and a commitment to lifelong learning.
Whatever the future may hold, by upgrading their interpersonal skills, senior finance professionals can therefore prepare themselves to adapt and thrive through uncertainty.
Curious about the latest mid-career trends, challenges, and opportunities? Explore more in our series designed for finance professionals navigating their mid-career journey.
The 70-year career: How to prepare for a longer, more fulfilling working life
Staying relevant in the AI era: A guide for mid-career investment professionals
Balancing work and study as a mid-career investment professional
In the age of AI, it’s human skills that employers want
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