The Key to Transforming CFOs into CEOs
- by Peter Dean
A case study on empathy in leadership
From my experience coaching and counseling executives, I have learned that an essential behavior associated with professional success and personal fulfillment for CFOs transitioning into a CEO role is the practice of empathy. A six-year case study of a CFO at a mid-sized pharmaceutical company who desired to be CEO when his predecessor retired revealed the importance of that trait. The board of directors hired me to work with him after which time they would make their decision whether to promote him to CEO. They wanted to be sure that as good as he was with numbers, he would also listen to, support, and inspire not only his team but the whole organization.
The coaching process included the use of psychological assessments, live 360-degree interviews, shadowing the CFO in his daily endeavors, a self-assessment, and specific communication training. The intent was to identify what the CFO needed in his leadership toolkit to be an effective CEO. The description below indicates the suggested areas of improvement that resulted from the self-assessment, the psychological assessment, the 360 interviews, and the shadowing when he was the CFO.
Areas for Improvement
Some comments collected in the 360 process regarding areas needing improvement included:
- Talking too much
- One-sided interpersonal relations (i.e. not listening)
- Lack of ability to fully attend to what others were saying
- Not open to others which resulted in defensive listening
- General lack of caring about others
- Responding abruptly and negatively to what others had to say
- Shooting down all ideas of others—he always had a better idea
- Faking attention when listening
- Being defensive about feedback
- Giving half attention to what others were saying while obviously preparing what he wanted to say next in the conversation
- Pretending to care about others causing them to feel of little value
- Seeking out those who will protect his ego
One 360 interviewee provided a detailed critique of the CFO’s weaknesses: “He is talking too much. He seems to get energy out of talking at length while others get depleted of their energy. His long-winded talking seem to indicate a strong need to prove himself to others. When he is silent, he listens for opportunities to bring his personal history into the light irrespective of the content of the conversation. Many in the company are over-shadowed by the expectation that they will have to sit there and listen to all of his stories and have very little time to talk about the reason they wanted to talk to him in the first place. For example, in a one-hour meeting, he would occupy 50 minutes of the time talking about everything but your topic and then give you 10 minutes to speak, but even that time is interrupted. People don’t approach him to talk as they don’t have the time to waste. Overall, it is a lack of empathy for others.”
Recognizing Flaws and Addressing Them
I shared the feedback about his “empathy deficit to the emotion and perspectives of others” as a central theme to the CFO. We discussed that he sometimes operated with an unhealthy ego, protecting himself against any threat of humiliation or negative feedback. He not only didn’t understand the needs of his employees, but he also didn’t understand how to create a work culture where his employees felt understood and able to communicate with him.
In business, empathy involves the ability to align your feelings with the other person by understanding the area of their emotional stress—the specific kind of feeling they are having (fear, anger, shock, humiliation, etc.), reflecting back to them the emotion (“You seem frustrated. Help me understand why”), paraphrasing what you understand and what you don’t understand, and modeling good communication skills (listening, attending, dialoging, etc.).
The CFO’s ego took up the majority of his interactions with all of his team. Increasing ego needs on the part of any leader lowers the ability of the leader to be empathetic. The drive for ego domination and total power becomes pathological and can cause unintended negative consequences to the organization. Unhealthy ego manifests with blind spots where the executive is not aware how others are observing their behavior. This was a case in point. It was clear the CFO needed to increase the practice of empathy, which includes the capacity to monitor and manage ego needs. Expressing empathy brings ego needs into a healthy zone. Healthy egos are open to continuous self-development. They are coachable.
The CFO wanted to make a change after he received his results. After many months of discovery within the ongoing coaching sessions, it became obvious to the CFO that he had made an earlier judgment that showing empathy was not masculine. He grew up with an extreme and rigid model of masculinity where he practiced suppressing his own emotions, in addition to not being open to other people’s emotions. When discussed further, the CFO became open to the idea that if he truly wanted to be CEO he would have to develop empathic relational skills. He realized that emotions had never mattered much to him before because all he had to do was deal effectively with numbers.
Not only did this CFO realize that he had to have better empathetic skills with his staff and the board, he needed to reach out to colleagues in a true dialogue across the enterprise if he wanted to be CEO. He would have to get to know and better relate to the people in sales, marketing, human resources, information technology, and operations—not just their numbers. He would also need better relations with a growing millennial workforce that values social good and making a difference. His role had been to target a revenue figure only; now he had to transform his personal brand to one of openness and engagement. While maintaining his finance skills, he became better at interpersonal exchanges with others using respect, listening, empathy, and attending skills, all of which enhanced his leadership.
Open-Mindedness and Hard Work Pays Off
He made significant progress on better relational skills after the first year of guidance and the board voted him in as CEO only if he retained his coach. Once CEO, he immediately went on a listening tour to all the facilities of the company. Over the next five years, there were times when he digressed into his previous habits, but he always came back to his personal goal of healthy character development after realizing his behavior. There were several post-assessments to help him see where he might have gone off the rails. To his credit, he always listened and made the necessary changes. He went on, with the coach, to be the CEO for the next five years and lead spectacular revenue increases in the company. He was personally recognized by the board as having the magic touch with both finance and people. He retired in his sixth year as CEO. This was a true example of the power of empathy in the workplace.