The global economic cycle has taken us on many roller coaster rides. From boom to bust, investors have watched trillions of dollars appear and then disappear even more quickly.
As the economic landscape continually changes, the type of leader needed to guide a company also changes.
The team at executive search firm Russell Reynolds examined the type of characteristics needed by CFOs during times of economic booms and busts.
The survey compared 129 CFOs against a broader database of executives. Researchers examined 60 commonly accepted psychological scales from well-validated leadership assessments to “understand on which scales the CFOs showed statistical differences from the other populations.”
Using that information they put together a list of traits that demonstrates how different types of CFOs work best during certain economic conditions.
“When we looked at the psychometric data from CFOs we’d assessed at different points in the economic cycle, some fascinating observations emerged,” Russell Reynolds CFO expert Jenna Fisher told Business Insider. “From 2003 to 2007, when the waters were relatively smooth, the CFOs being hired were fairly low-key and not averse to taking a bit of risk. During the recession, though, firms recruited a new breed of take-charge CFO — a bolder, more ambitious, more imaginative, more dynamic leader.”
She added, “Interestingly, though, post-recession organizations are targeting CFOs with more conservative DNA — more perfectionistic, detail oriented, and diligent — hoping to prevent a recurrence of the oversights that led us into the financial crisis in the first place.”
The report concludes that we may attribute this trend to the recent rise of the qualified accountant as CFO. “However, we see this characteristic manifested even among advisor CFOs (former bankers, consultants, and the like) and thus also attribute this movement to ever greater regulatory pressure for CFOs to be absolutely crisp on the details.”
If you want to effectively lead your company for years, it’s clear you need to be adaptive in various economic climates.
This article is published in collaboration with Business Insider. Publication does not imply endorsement of views by the World Economic Forum.
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Author: James Kosur is the C-suite editor at Business Insider.
Image: A Businesswoman is silhouetted. REUTERS/Christian Hartmann.