Visionary, Innovator, Realist: How to Navigate the Future of Finance with Multiple Leadership Styles
In 2023, finance leaders have the opportunity to bridge the gap between ambition and reality. Earlier this year, we surveyed over 700 finance leaders in Europe and North America in the 2023 Finance Leaders Survey to understand how the finance function is evolving and how leaders are preparing for the future. The survey focused not only on best practices, processes, and technology but also on identifying the leadership approaches that contribute to the success of finance teams.
Let’s take a look at three leadership approaches and how they can help you navigate the challenges and opportunities you will encounter this year and beyond.
One of the more striking results from our survey was the gap between how important finance leaders say it is for finance teams to be agile and how agile they actually are.
- 96% of finance leaders said that agility is essential
- 84% said they are either ‘very’ or ‘quite’ agile now
The biggest challenge to agility is securing internal alignment, implementing new technology, collaboration, and upskilling or finding new talent.
Visionaries have the ability to articulate their vision for the organization's future and envision a more strategic role for the finance team. This can help maintain the team's motivation to put in the work to align processes and technology by constantly reminding them of the end goal and the positive outcomes they can achieve.
But beyond the alignment of process and tech, leaders taking a visionary approach can also propose plans for implementing advanced automation through artificial intelligence, pushing the finance function to surpass its current capabilities.
Another benefit for leaders taking a visionary approach is improving the finance department’s standing in the organization. About a third of respondents considered elevating the finance department to be a strategic contributor to the business as a top priority.
Innovators are instrumental in generating data-driven insights by finding efficient ways to utilize existing tools and resources. They actively seek new opportunities for process automation and strive to make the finance team more agile and less burdened by menial tasks. Finance leaders recognize the importance of digital transformation and are increasingly adopting automation to enhance efficiency and generate insights.
Our survey found that:
- 41% of finance leaders are using automation to transform their businesses this year
- 27% of finance leaders indicated that over half of their processes are automated
Automation allows finance teams to focus on higher-value tasks, such as analysis, skills development, and providing strategic insights, by automating routine reporting, expense allocation, and month-end closing activities.
Automation tools are invaluable for innovators, because they provide a means to use the data they already have in innovative ways. This allows finance leaders to advise leadership on how best to adapt quickly to changing circumstances and enables them to make informed decisions based on up-to-date information.
Realists serve as pathfinders for their teams, using data-driven and pragmatic approaches to navigate and thrive in the immediate future. Their leadership becomes particularly valuable during uncertain times, where they strive to guide their teams successfully while illuminating the way forward.
The realist approach in finance involves practical planning for the immediate future, addressing imminent challenges, and focusing on practical steps that bear fruit in both the short- and long-term.
Realists emphasize the importance of creating implementation plans, onboarding processes, and change management strategies. They advocate for regular updates to forecasts, enabling organizations to anticipate and respond to changes effectively.
Looking ahead, one notable trend is the increasing investment in AI and machine learning. Finance leaders report they intend to take a cautious "phase in" approach to investing in AI and machine learning, opting to first invest in more foundational technologies such as cybersecurity, risk management, and planning tools.
Find Your Path Forward
To navigate the challenges that lie ahead, finance leaders need a multifaceted approach to leadership. It’s not about choosing whether to be a visionary, innovator or realist; rather the strength is in knowing when to take which approach. To build the finance function of the future, you need:
- Vision to create an inspiring plan for transformation
- Innovation to make the most of existing resources
- Realist assessment of the next few steps to take
By combining visionary thinking, innovative solutions, and realistic planning, finance leaders can drive their teams towards success, bridging the gap between ambition and reality to create an elevated, transformed finance function.
Learn more about how finance leaders are taking visionary, innovative, and realistic approaches to navigating the road ahead in the 2023 Finance Leaders Survey.