6 Leadership Skills Every Finance Manager Needs to Master

The role of a finance manager has evolved far beyond just ‘number crunching’. In today’s business environment, finance managers are expected to be strategic leaders who can tackle complexities, drive innovation, and influence decision-making at the highest levels. 

For professionals looking to switch to finance or fresh graduates aspiring to excel in the field, mastering leadership skills for finance managers is crucial for long-term success.

Here, we highlight six essential leadership skills every finance manager must master to succeed in a competitive and ever-changing business landscape.

1. Strategic Thinking

Strategic thinking is at the heart of effective financial leadership. As businesses aim to stay competitive, finance managers must look beyond immediate financial concerns and anticipate future challenges and opportunities.

What It Looks Like in Practice

• Creating comprehensive financial plans that support and align with the organisation’s objectives.
• Identifying and mitigating risks before they escalate.
• Guiding investments to support innovation and growth.

How to Develop Strategic Thinking

• Stay Informed: Regularly analyse market trends, economic forecasts, and industry insights.
• Collaborate Across Teams: Engage with other departments to understand their goals and align them with financial strategies.
• Ask “What’s Next?”: Regularly analyse how your financial decisions may impact future outcomes.

Strategic thinking transforms a finance manager from a back-office number-cruncher into a forward-thinking business leader.

2. Effective Communication

Finance is often perceived as complex and technical. Effective communication bridges the gap, helping finance managers translate data into actionable insights that non-financial stakeholders can understand.

Key Aspects of Communication for Finance Managers

• Providing financial reports in a clear and simple manner.
• Influencing stakeholders with compelling financial narratives.
• Building trust through transparency and open dialogue.

Tips to Improve Communication

• Know Your Audience: Tailor your message based on whether you’re addressing executives, teams, or external partners.
• Use Visual Aids: Charts, graphs, and dashboards make data more digestible.
• Practice Active Listening: Communication is a two-way street. Recognise and consider the priorities and concerns of others.

For professionals switching to finance, honing communication skills can fast-track your ability to influence decision-makers effectively.

3. Emotional Intelligence

Leadership is fundamentally about people. Emotional intelligence (EQ) enables finance managers to build strong relationships, manage conflicts, and inspire their teams.

Key Traits of Emotional Intelligence

• Empathy: Understanding the perspectives and emotions of team members and stakeholders.
• Self-Awareness: Recognising and managing your own emotions, especially in high-pressure situations.
• Adaptability: Staying flexible and open to change.

Ways to Develop Emotional Intelligence

• Request input from colleagues and mentors to enhance your self-awareness.
• Practice mindfulness to stay calm and focused under stress.
• Prioritise team-building activities to foster stronger connections.

In finance, where decisions often carry high stakes, EQ is a skill that separates good leaders from great ones.

4. Decision-Making Under Pressure

Finance managers often face high-pressure situations where they must make quick yet informed decisions. Whether it’s responding to market fluctuations or reallocating budgets during crises, decisive leadership is essential.

Challenges in Decision-Making

• Balancing short-term gains with long-term sustainability.
• Making calls with incomplete or ambiguous data.
• Managing the expectations of multiple stakeholders.

How to Improve Decision-Making Skills

• Rely on Data: Develop a system to quickly gather and analyse relevant information.
• Use Frameworks: Tools like SWOT analysis or decision matrices can guide your thought process.
• Practical exposure: Gain insights from experience by analysing past decisions to determine successes and areas for improvement.

Strong decision-making skills build trust and confidence in your leadership, both within your team and across the organisation.

5. Innovation and Adaptability

The financial environment is continually evolving due to emerging regulations, technological advancements, and shifting market needs. Finance managers who embrace innovation and adaptability can lead their teams through change while driving competitive advantages.

Examples of Innovation in Finance

• Implementing AI tools for predictive financial analysis.
• Exploring sustainable finance options, like green bonds.
• Adopting cloud-based financial management systems for greater efficiency.

How to Foster Innovation

• Motivate your team to explore new ideas and approach challenges with creativity.
• Stay updated on emerging technologies and financial trends.
• Be open to challenging traditional methods and adopting new approaches.

Innovation is about fostering a mindset that embraces continuous improvement and adaptability.

6. Building and Leading High-Performing Teams

A finance manager’s success is deeply tied to the performance of their team. Effective leaders don’t just manage - inspire, mentor, and empower their teams to achieve collective goals.

Strategies for Building High-Performing Teams

• Recruit Smartly: Look for individuals whose strengths complement the team’s existing skills.
• Invest in Training: Provide opportunities for team members to develop their technical and leadership abilities.
• Foster Collaboration: Create an environment where ideas are shared openly and everyone feels valued.

How to Lead Effectively

• Establish clear expectations and ensure team members take responsibility.
• Recognise and celebrate achievements to boost morale.
• Offer consistent feedback and guidance to foster individual growth.

For fresh graduates entering finance, learning to lead teams effectively can set the foundation for a rewarding leadership journey.

Conclusion

By mastering these six essential leadership skills for finance managers, you’ll be well-equipped to navigate the complexities of modern financial management.

Programmes like the part-time MSc in Financial Management from the University of Manchester are designed to help you acquire these skills while balancing work and study. Download the brochure to explore the University of Manchester’s MSc in Financial Management programme. 

The more you invest in honing these skills, the greater your impact will be in shaping the financial future of your organisation. Request a callback for personalised advice, or you can apply directly to begin your journey toward becoming a finance leader.

Frequently Asked Questions (FAQs)

1. What is the difference between leadership skills and technical skills for finance managers?

Technical skills focus on understanding and applying financial concepts, such as accounting, budgeting, and financial modelling. Leadership skills, on the other hand, involve managing teams, making strategic decisions, and influencing others to achieve organisational goals. Both are essential, but leadership skills are important for advancing to higher-level roles.

2. How long does it take to develop leadership skills for finance managers?

Developing leadership skills is a continuous process and depends on your level of experience and commitment. Structured programmes like the MSc in Financial Management from The University of Manchester offer practical learning opportunities that help you build these skills over the duration of the course and beyond.

3. Can leadership skills be improved while working full-time?

Absolutely. Leadership skills are often best developed in real-world settings. Flexible programmes, such as part-time MSc courses, are specifically designed to let you apply what you learn in your job immediately, enhancing your skills while maintaining your work commitments.

4. Are leadership skills important for finance managers in small businesses?

Yes, leadership skills are crucial regardless of the organisation’s size. In smaller businesses, finance managers often wear multiple hats, making leadership and decision-making skills essential for managing limited resources effectively and driving business growth.

5. How does cultural diversity impact leadership in finance?

Cultural diversity brings varied perspectives, which can enhance decision-making and innovation. However, it also requires finance managers to adapt their leadership style to suit different cultural expectations and communication preferences. Programmes like the MSc in Financial Management often include modules on managing diverse teams to prepare you for such challenges