Business

Thursday April 9, 2009

Developing soft skills

BUSINESS AGENDA By TONY OSUDE


Finance professionals must not only hone their technical skills but also embrace the competencies of business leaders.

THE role of the finance professional is changing. Core accounting skills are still a prerequisite, but increasing competition, globalisation and business regulation have resulted in an expectation that the finance professional is now an essential contributor to strategy, risk management and business performance.

Therefore, finance professionals must develop not only their “finance” technical skills but they must embrace the competencies of business leaders – analysis, planning, risk identification, team building, leadership, communication and control often referred to as the “softer” skills, or as we would now say, “high performance” behaviours and attitudes.

Coaching has been ranked as one of the most powerful learning tools in developing these finance leaders, according to ACCA’s published global research: Paths to the Top – Best Practice Leadership Development for Finance Professionals (2007) and Talent Management in the Finance Profession (2006). Other independent research also supports coaching’s potency as a development tool.

In Does Coaching Work? (2006), the Chartered Institute of Personnel Development asked a number of leading global companies the simple question: “Does coaching really work?” and 96% of respondents thought internal and external coaching were highly effective, even though only 32% suggested this conclusion could be based on key performance indicator (KPI) improvements; the remaining respondents agreed their conclusions were more subjective.

And in 2001, US firm Manchester Consulting Inc 12 undertook a return on investment exercise (using Fortune 1000 entities), comparing the costs of introducing a coaching programme with the benefits, as measured by increased revenue, cost savings and estimated financial gains from better relationships and improved KPIs. The overall return on cost of investment was calculated at some 600%.

Although coaching is a learning tool, it differs from teaching, which is more one-way and directional.

According to John Whitmore in Coaching for Performance, “coaching is unlocking a person’s potential to maximise his own performance. It is helping him to learn rather than teaching him.”

Miles Downey says in Effective Coaching that coaching is “the art of facilitating the performance, learning and development of another.”

Although ACCA research found that organisations globally perceive coaching as a vital talent development process, these tools have not been adopted in a widespread fashion and tend to be restricted to senior management.

In the latest ACCA report, The Coaching and Mentoring Revolution – is it working?, released in January 2009 and which surveyed 700 ACCA members across 170 countries, key findings reveal that although most organisations believe in coaching and mentoring, it is an aspiration, not a reality.

Few organisations are currently seeking to embed a coaching culture across their businesses.

Notably, although 85% of respondents believed it would be beneficial to use coaches, over 60% of organisations do not use accredited internal or external coaches to develop the competencies of finance professionals.

Why is coaching not being implemented on a wider scale, given the positive perceptions?

There are a number of reasons for this. In reality, current coaching and mentoring processes appear to be restricted to the larger organisations with sufficient resources to implement coaching and mentoring practices (though sometimes informally).

Evidently, the cost-benefit question is significant, especially in these troubled economic times, when every expense is being examined.

Typically, the costs of any learning initiative are more closely scrutinised and coaching programmes can be expensive in cash input terms, relative to the size of smaller organisations.

Culture is also an important issue. Coaching as a means of learning, whereby the learner takes a greater, or total responsibility for the outcome, is sometimes perceived as being better suited to more Western styles of education.

In Asia, Africa and the Middle East, education may sometimes be more directional and “tuition”-led.

It is therefore not surprising that coaching is less embedded even though a culture of coaching outside learning is more widespread.

Lack of senior management “buy-in” is also a challenge. ACCA research found that almost one-third of respondents cited a lack of senior management support in establishing coaching cultures. This could be linked to the inability of many organisations to quantify benefits transparently. If many organisations struggle to identify the true financial benefit to the organisation of coaching practices, it can be more difficult to engage senior management in adopting the process.

Engagement at all levels is vital to the success of a coaching programme.

Despite these issues, all organisations want the biggest bang for their buck, and coaching delivers this.

Research has demonstrated a positive correlation between the implementation of successful coaching and mentoring programmes, and corporate profit.

Consequently, it could be inferred that by not implementing such programmes effectively, many organisations are not maximising their return on human capital employed.

In other words, the finance function is under-effective, talent is under-utilised, and financial performance is compromised.

Organisations wanting to maximise the value of their finance function would do well to consider adopting coaching as a key learning tool, and going beyond that, embedding coaching as a business philosophy, or work culture, at all management levels.

  • The writer is ACCA’s head of professional development, based in London. Readers’ feedback to this article is welcome. Please email to
    starbiz@thestar.com.my

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