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Gartner identifies three pillars of human leadership CFOs need

The rapid progress of AI tools in the finance function in recent times has made it more important than ever for CFOs and finance leaders to demonstrate three core pillars of human leadership: adaptivity, empathy and authenticity, according to Gartner, Inc.

“As AI becomes ever more capable and can carry out more work in the finance function, inevitably the question arises about whether AI replaces human employees,” said Dennis Gannon, vice president analyst in the Gartner Finance practice. “The picture that’s actually emerging as organizations put advanced digital technology into action is a lot more nuanced and difficult than a binary of whether a job stays or doesn’t.”

Speaking during the opening keynote at the Gartner CFO & Finance Executive Conference in National Harbor today, Gannon went on to describe “the emergence of a human-machine learning loop” in which humans and machines are each doing what they’re best at and interacting with each other.

“Technology is providing tripwires and early trigger warnings, providing simple recommendations and refining data, while humans are interpreting data, identifying problems and goals, and taking on more complex decisions,” said Gannon. “When it works well, the human and the machine complement each other and make each other better.”

The biggest obstacle to things working well, however, is employees checking out of the process because of fatigue with near-constant change, and fears about being replaced by technology stoking a widespread lack of faith in leadership.

“The expanding scope of what technology is now able to do for us has fundamentally changed what employees need from their leaders,” said Gannon. “Finance leaders need to access human leadership skills to guide not just their own teams but the broader enterprise in this environment.”

Human leaders drive employee intentions to stay with their current employer up by 12 percentage points over the average leader, and drive improvements in employee wellbeing and engagement by 30 and 37 percentage points, respectively.

The three key pillars to human leadership that CFOs and finance leaders must develop include adaptivity, empathy, and authenticity.

Broadly speaking, employees now demand a more personalized and flexible work experience. Since the COVID 19 pandemic and the large shift to remote working and hybrid models, most finance employees have a lot more control over when and where they work.

“Adaptivity is not just when and where you work, however, it’s who you work with, it’s the extent to which you can control the volume of work, and what you work on,” said Gannon. “Of the three pillars, this is the area where finance leadership has performed best, and where their hand is really being forced by the labor market.”

Gartner defines empathetic leadership as moving beyond the articulation of a kindness, into taking the time to cultivate a deliberate understanding of the motivations and experiences of someone else, while leaving their own biases behind.

“Empathetic leadership is especially important for CFOs, whose direct reports are feeling burnt out at a rate higher than any other function. It will become even more important as an increasing proportion of the workforce is made up of Gen Z employees, who set an even higher bar for the sort of emotionally intelligent leadership they expect in the workplace,” said Gannon.

This means more than just sharing personal details about oneself. It requires leaders willing to be personally vulnerable in front of their bosses, their teams, and their peers.

“Over 50% of finance employees tell us they feel afraid to take a calculated risk because they think it will blow back on them,” said Gannon. “Being personally vulnerable as a leader means being authentic about what you are feeling to show employees they can also put themselves out there without feeling like they will be punished by the system for doing so.”

Instilling Financial Discipline
CFO priorities tend to focus on things such as “more scrutiny, better data, more accountability,” and while these things are intended to drive better financial discipline, they also can be alienating to the wider business because finance can be seen to stifle innovation and create burdens for other departments.

“When done right, the mission of driving financial discipline is the same as the mission of being a human leader,” said Gannon. “Putting people at the center of the job makes you not just a more effective manager of people – but a more effective CFO. It improves your ability to make tough economic tradeoffs and protect financial outcomes for the whole enterprise.” Gartner

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