Accounting Industry | 10 Jun 2023

Why EQ Can Be a Game Changer for CFOs

If you believe popular opinion then finance people in general and CFOs, in particular, can be somewhat of a challenging personality type but is this really true?

Even if it is true does it matter? After all, CFOs are paid to crunch numbers and not do the cuddly bunny stuff that perhaps the marketing department or sales might indulge in.

We’d argue that is absolutely important that CFOs and their wider teams understand EQ and are able to add it to their repertoire of business tools.

Give us five minutes and let us convince you with;

Are finance people really ‘cold’ people?
What is EQ?
Why should we care?
How to boost your own EQ

Are finance people really ‘cold’ people?

It’s a stereotype for sure and one that sometimes accountants can play up to but is it really true? Are finance people cold people?

Most laypeople will probably agree with John Cleese's description in Monty Python’s Flying Circus back in 1969

“You are an appallingly dull fellow, unimaginative, timid, lacking in initiative, spineless, easily dominated, no sense of humour and irrepressibly drab. In most professions, these would be considered drawbacks. In chartered accountancy, they are a positive boon”

But of course, accountants are a varied lot and whilst the humourous picture above might be good for a laugh it can also be quite damaging in many ways.

For ambitious finance people with an eye to working in the wider business, conforming to the stereotype means that you can forever be seen as ‘just a numbers person’.

It’s not all bad though. In his 2002 research G Stephenson Smith found that actually accountants are seen both positively and negatively in popular media and who can forget the finance action hero in Ben Affleck’s The Accountant?

But here’s a thing, in many ways you want your finance people to have a different personality type. In a recent study, professor Frank Hartmann of Rotterdam School of Management noted that ‘people pleaser’ accountants were much more susceptible to being pressured into misreporting.

The fact of the matter is that within a finance department, you need people of all types working in different functions.

Perhaps you need someone with a detail fixation working on a bank rec, someone who is a rule follower on your statutory accounts and cuddly teddies manning your business partnering team.

However, when you get to the heady heights of CFO, there is a clear need to have a wide range of abilities and first and foremost great people skills.

What is EQ?

Emotional quotient or EQ is the ability to understand and manage your own emotional state and appreciate how your emotional state affects others.

EQ relates to four specific attributes of your emotional well-being;

Self-management- you are aware of your own emotions, are able to spot them and to be able to manage them yourself.

Self-awareness - Knowing your own strengths and weaknesses, understanding how the external world affects your own emotional state and being able to spot when this changes

Social awareness - You can understand the emotional state of others and respond accordingly. You pick up on emotional non-verbal cues and recognise the power structures at play in an environment

Relationship management - you are able to build and maintain healthy relationships working well in a team. You can understand, communicate with and inspire others to do their best work.

Why should we care?

If you aspire to be a top-class CFO or you want to move out of the confines of finance to other parts of the business then you need to work on your game and EQ is the place to start.

Operating at the top level of an organisation is all about relationship building. In the first instance, it is about building and maintaining an effective team with your fellow directors and senior managers.

At the same time, you have to be able to inspire and truly lead the people that report to you.

But more importantly, the self-awareness and self-knowledge that high EQ gives you mean that you are more centred, calm and ultimately, happy.

So for the sake of your career and for your own emotional future, developing your EQ is a game-changer.

How to boost your own EQ

The good news is that a lot of EQ building is actually down to self-help. You can learn to become more EQ literate in exactly the same way you learn to read a balance sheet.

1 - Take time to reflect

Stop number one on your journey is to spend time reflecting upon what has happened during the day. Many people do this by writing a journal as a way of collecting their thoughts.

You can think about what happened, how it made you feel and if any particular tasks or events changed your emotional state.

2 - Try a 360 degree assessment

How do your coworkers see you? What about your peers? People who report to you? Your customers and other stakeholders?

Understanding how you are seen is a great step to better self-awareness. In the words of Rabbie Burns “O, wad some Power the giftie gie us, to see oursels as others see us!”

3 - Utilise active listening

How many times have you found yourself in a meeting or even a conversation and found yourself drifting away?

If you want to be truly EQ able then you need to practice active listening, hearing not only the words that are being said but looking for the non-verbal clues that signpost the speaker’s feelings.

4- Listen to your own emotions

Many people aim to suppress their emotions and become what is often called ‘level-headed’ by presenting a Spock-like facade.

But that doesn’t mean that you can’t listen to your emotions at the same time.

Think about how you feel at specific moments and look for triggers for particular emotional states. For example, perhaps you have a fear of making small talk in the kitchen but is that fear reasonable?

Once you understand the triggers for your emotional states you can better predict what will cause them and do something about it.

5 - Self-regulate your emotions

Some emotions are great, some are wholly negative and some are great only at the appropriate moment.

So once you understand your triggers and you can predict how you feel then you have the choice whether you accept that or not.

Perhaps someone makes a mild criticism of you in a meeting. You have a choice about how to respond but you can do so with the full knowledge of how your emotional state has been affected by the criticism in the first place.

6 - Create a new plan of how to respond

Do you find that you always respond in a particular way to a specific trigger?

Do you always hit back at people who criticise you or go into a depressive shell?

Then it is time to formulate a new response plan that will be positive and will break any cycles you may be in.

For example, when that person criticises you ask for feedback about why that would be and analyse it dispassionately.

Having a new plan helps because it proves to you that you don’t have to be a slave to your own emotions and aren’t forced to react in the same way every time.

7 - Read the room

Now that you understand your own emotions spend some time thinking about other people.

What state is everyone experiencing in the meeting? Do they change? Do they have emotional cycles that they always retreat into?

Reading the room takes practice but after a while, you’ll become an expert and more importantly, you’ll be able to predict how people will react to your inputs.

Give EQ a chance

One of the most common reasons that many people seem to be ‘EQ deficient’ is simply that they haven’t given it a chance or haven’t understood what a powerful tool it can be.

But EQ is a skill just like any other and if you don’t give it a go then it won’t work for you. Think of it like someone reading a book about driving a car and then just expecting to be able to do it without any practice!

So use our tips and see if your EQ develops. We would be willing to bet that you’ll be a happier, healthier and more effective finance leader as a result.

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