The Four Function Leader
By: Steve Louis, May 2021
Defining what makes a good leader has been a popular topic of discussion, in fact there are over 60,000 books on the topic on Amazon.com.
From my experience, the most successful business leaders possess a mix of just four core competencies — strategy, operations, finance, and organizational awareness.
The specific experiences in these four areas allow business leaders to excel in different ways, but in general they are often called upon to demonstrate at least two of the four functions at any given time depending on their company’s particular situation.
Check out the four types below and comment on which one relates most with you.
The ‘Motivational Speaker’
(High Strategy + High Organizational Awareness)
Proven executives have a high EQ (Emotional Quotient) aka emotional intelligence to lead an organization. This is defined as the ability to perceive, control, and evaluate emotions [1].
We look to leaders to harness the power of these emotions and convert that raw energy into a productive power source for the business as defined through the mission and vision.
There is a problem though. A study conducted by Rungway found that more than half (52%) of employees cannot recite their organization’s vision, and nearly half (49%) cannot recite their organization’s values [2]. This is a leadership problem in its most basic form.
Leaders inspire change, they communicate with the team and align them towards a common purpose. They personify the values of the company and they certainly know how to drive the mission and vision forward.
The ‘Accounting Mastermind’
(High Strategy + High Finance)
I first came across this leadership type in business school. Many of my classmates were brilliant accountants who were able to effortlessly analyze a financial statement to know exactly where to channel resources to maximize ROI (return on investment).
These leaders exceled in such matters as mergers, acquisitions, and divestitures. They were center stage in front of shareholders and board members to translate what the numbers meant to health of the organization.
But they don’t necessarily need to have years of finance and accounting backgrounds to be effective leaders. Current Executive Director of SEG and Former CEO, Jim White once shared with me that “of course CEOs need a basic understanding of finance to know their way around a financial statement. But it is crucial to bring in a CFO, treasurer, controller, or bookkeeper into your inner circle when building a team. Find someone you can trust and who will challenge you”. You will want these guys on the wall, “you need them on that wall!”
The “Not Afraid to Get My Hands Dirty” Executive
(High Operations + High Org Awareness)
My favorite example of this type of leader is from Toyota, where a journalist once remarked to the President of the auto company that he was difficult to find because he was never in his office. The President responded that this was because “we do not make Toyota cars in my office!”
Leaders know what happens behind the scenes — in the shop, warehouse or in the field. This capability allows them to see firsthand what goes on and how their decisions affect the workforce.
I have always appreciated when my team recognized how dirty my coveralls were and in return they trusted me to understand their needs and take appropriate action.
The ‘Practical Technologist’
(High Operations + High Finance)
A mechanic who understands how the engine and all the parts under the hood function as well as how much each component is worth, can build a fast, affordable car.
Likewise, only those leaders who understand how each internal division performs at a fundamental level and what the value is of each element, can achieve optimum performance.
Typically companies keep their finance team segregated from operations, but those who provide cross-functional training and allow their ‘number crunchers’ to be exposed to other departments generally develop highly effective leaders.
The Four Function Leader
So to put it all together only a Four Function Leader can define the strategic direction of the company, emphasize and motivate their employees, while knowing their way around both the factory as well as a financial statement.
How many of these functions do you possess? If you answered all four then congratulations, you are at the top of your class. If you answered fewer then four, then fret not, there is always time to reinvent yourself, learn new things, and improve your leadership abilities.
But wherever you are at in your journey keep learning and taking action because we need more Four Function Leaders to take on the challenges of tomorrow.
About the Author
Steve Louis is a Managing Director at Eternal Energy LLC which is based in Houston Texas, USA and Dubai, UAE. Eternal Energy is a business advisory firm which specializes in executive level support to give CEOs an added advantage in the competitive business world.
Steve can be reached at slouis@eternal-nrg.com or by visiting www.eternal-nrg.com.
Keywords
#leadership #management #newmarkets #businessgrowth #revenuegrowth #strategy #finance #operations #organizations #executives #inspirechange #CEO #fourfunctionleader #businessadvisory @eternal-nrg
Ref 1. https://www.verywellmind.com/what-is-emotional-intelligence-2795423
