The Fundamentals
Born or Made?
Getting on Track

What are the traits of the true leader in today’s business world?

Not surprisingly, they’re not the traits you might have found quoted just five years ago. Multiple developments, not least Sarbanes-Oxley, the now notorious accounting scandals and increased oversight of accounting practices, have created a brave new world for accountants.

The Fundamentals

"The Sarbanes-Oxley Act [particularly] has dramatically changed the consciousness of corporate America," says Robert A. Gaida, CPA, vice chairman at BDO Seidman, LLP in Chicago. "With this Act, individuals within corporate America, such as the CEO, CFO, controller and audit committee chairman/members, all have a much higher stake in what they do and say about their respective organizations. The penalties for these individuals have increased dramatically, and the stakes are no longer civil penalties, but also criminal penalties."

Gaida pinpoints the creation of the Public Company Accounting Oversight Board (PCAOB), a sub-arm of the SEC, as another fundamental change that will dictate how leaders operate in the business marketplace from here on out. The PCAOB will oversee the accounting profession as well as all publicly traded corporations with regard to their financial reporting activities and corporate behavior.

"These activities are creating many new leadership responsibilities," explains Gaida, who goes on to stress that both public and private firms are falling under increased accounting scrutiny. Private industry and nonprofit organizations, for example, both are looking at the Sarbanes-Oxley Act and putting additional pressure on their CPAs to step up to the plate and help them operate under the new rules and regulations.

"There's a new stream of consciousness," says Gaida, "which will require accounting leadership to bring corporate America to the appropriate levels."

To fill that need, Gaida says the best leaders will challenge the process, continually question what a particular organization is doing and constantly attempt to bring the entity to new heights of professionalism and success. "That's an excellent sign of a great leader," says Gaida, adding that the most successful leaders also will look beyond what's going on today to consider what it will take to inspire individuals toward a shared vision of the future.

"One must be able to create for others the image of what that future can be, enlist others and attract people toward a common purpose," says Gaida. "A great leader will serve as a model, set the example and lead by doing."

Lastly, Gaida says CPAs in leadership positions must also "motivate or encourage the heart of individuals," by recognizing the contributions made by others towards the goal or mission.

Born or Made?

Alisa Cohn, an executive coach with Alisa Cohn Coaching in Brookline, Mass., often works with CPAs. She says that in the last two years, an increasing number of company executives have started to look to their accountants to assume the role of clarifier, business advisor and even hand-holder.

"Executives are operating under more scrutiny," says Cohn, "and they have to more fully understand what lies behind the numbers."

To help facilitate that process, Cohn says leaders in the accounting field must brush up on their communication and listening skills. By doing so, she says CPAs will be able to not only do the analytics, but also communicate what the numbers mean and what the implications are for the business.

"A leader has to help guide the decision-making based on the numbers, understand the company's strategy and exhibit good judgment," she adds.

Although these types of qualities can be learned, Cohn admits that the best "students" are those who are open to new ideas and behaviors, and willing to try new success strategies. Those who are not so "coachable," she says, fight the urge to change their ways until she lays out the process in an analytical format, and asks them, "If you keep on this trajectory, where will you land in 10 years? What is the price of staying this way? What do you think you give up by trying something new? What do you potentially gain by trying something new?"

"When they see the cost of staying the same versus the potential benefit of trying new behavior, they usually are willing to experiment with a small change," says Cohn. "When that is successful, and/or leads to insight, they're usually willing to try new concepts."

Getting on Track

Being a leader in today's accounting world requires integrity, confidence and a big dose of risk taking, according to Bette Price, president of management consulting firm The Price Group in Addison, Texas, and co-author of True Leaders (Dearborn Trade Press, 2001). A platform of trust, established between the accountant and his or her client or employer, she adds, ties those qualities together into one cohesive unit.

"Any leader in the accounting field today must learn their client's or firm's beliefs, find out what signals are being sent out and figure out if those beliefs and signals are aligned with their own values," says Price. "If you don’t have common goals driven by common values, there probably will be a clash that prevents the CPA from moving up the ladder."

Delphia Croft, senior VP and general manager for management consulting firm Lee Hecht Harrison in Chicago, says the best way for a CPA to acquire the skills and behaviors needed to "move up that ladder" is by getting involved with personal development activities.

She suggests starting at the employer level, then contacting a local CPA society or the American Institute of Certified Public Accountants for information on professional development courses. Asking for "stretch" opportunities allows the individual to apply and practice critical skills and behaviors. Many organizations are opting to utilize outside coaches to help high-potential individuals learn and incorporate important leadership behaviors to drive business results.

"Look for opportunities within your organizations, ask for feedback around your reputation, and find out what your organization sees as important as you move forward," Croft advises. "Then talk to leaders who are already in place and ask them what kinds of skills and abilities they consider critical to their own leadership roles."

CPAs also should keep a sharp focus on relevant "ground zeroes" or ideal positions – both physically and mentally – that their organizations should be in, says Gaida. These ground zeroes might include integrity, professionalism, personal character and competency.

"Individuals need to set high standards in all of these areas, work toward achieving them and then share those values with others by walking the walk," says Gaida, "Through their actions, they'll greatly assist their organizations in moving in the right direction."

Reprinted courtesy of INSIGHT Magazine, January/February 2004, published by the Center for Corporate Financial Leadership.

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