What makes a good leader? If tasked with answering this question, some might devise a 10-page list of traits. Leaders need to be visionaries. They must be genuine, hardworking, respectful, and pragmatic. They should connect with employees. They should be story-tellers.
We hold leaders to a high standard, attaching a lengthy list of prerequisites to any governing role. Before starting as CFO, I repeatedly scanned through my leadership qualities, considering how I would present myself to my new colleagues. The night before my first day, a jumble of questions raced around my sleepless mind: “How will I balance openness with authority?” “How do I provide the appropriate amount of guidance to my team?” “How will I know if I am being effective?”
After serving in a variety of leadership roles over the last two decades, I still have a lot to learn. I have, however, worked to chip away at the long list of leadership traits by understanding the key areas where leaders must succeed. In my experience, the myriad of leadership characteristics can be boiled down to the Qs.
IQ (Intellectual Quotient): The first focus area is the most straight-forward. Of course, ascending the organizational ladder requires intellectual horsepower. Most leadership positions demand foresight, complex problem solving, and creativity, that of which requires sharp mental faculty.
Most leaders fulfill this first criterion. Unsurprisingly, cognitive ability is directly linked to job performance. Those with high IQs have dazzled their superiors with high-quality work and valuable insights, using brainpower as jet fuel to soar into top leadership spots. IQ is the first Q of leadership, as it gets your foot in the door.
EQ (Emotional Quotient): While earning my Master of Accounting, one of my colleagues shined as the star of our cohort. She was incredibly gifted with numbers. Following graduation, we both eagerly accepted offers to work in public accounting for Ernst and Young. After a short six months, however, she had moved on to another opportunity. Apparently, after bouncing around due to team conflicts, she had been asked to leave. Neither expertise nor credentials could outweigh the importance of EQ in a team environment.
IQ in isolation does not indicate strong leadership potential. In recent years, the power of EQ, the ability to read others’ emotions (including your own), has been exalted as a key trait in successful leaders. A study of UC Berkeley PhDs discovered that EQ was 40 times more powerful in predicting who achieved success in their fields than IQ (Developing Management Skills). Emotional competencies combined with strong cognitive abilities lays the foundation for an effective leader.
FQ (Financial Quotient): One of the most frequently overlooked requirements of a strong leader is financial intelligence. In a national Harvard study of U.S. managers, the average score on a simple financial literacy test was 38% (Harvard Business Review).
When elevated into leadership positions, it’s often assumed that people understand finance. However, I have encountered even senior leaders who have muddled along with very little knowledge of how to enact and measure value creation activities.
A company is a financial machine created to produce profit and cash flow, therefore leaders with decision-authority (and especially those with P&L responsibility) must understand how they make an impact on the bottom line. For today’s leaders, financial literacy is not an option. Strategy without finance is dead.
SQ (Strategy Quotient): Finally, even the brightest, most emotionally and financially-gifted leaders flounder without strategic direction. SQ is the bow that ties all the other leadership skills together. It puts the other Qs to work. Strategic leaders carve out structure without being rigid. They extend the abilities of the team and lead them into new, unpredictable territories by taking calculated risks. They’re aware of internal and external happenings. Overall, they see the big picture, and guide their team by sharing an inspired vision.
Follow the Qs of leadership to unlock the potential of your talent, maximize the impact of your organization, and escalate your bottom line.
About the Author
Steve Coughran is author of Outsizing: Strategies to Grow your Business, Profits, and Potential, CFO of an international billion-dollar company, and a management consultant. Steve has over two decades of experience driving business excellence. Known for his extensive research and writing on strategic growth and corporate financial management, he challenges conventional wisdom, earning the reputation of an “energetic trailblazer.” He is an expert on strategy and an acclaimed keynote speaker with over twenty years of experience driving corporate excellence.
For more information, please visit www.SteveCoughran.com.
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