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Stages of Leadership: Functional Competence

Stage One of Four

There are many facets of good leadership but hard skills, knowledge, and competency are at the base of the model.    A good leader should have a strong knowledge base of the industry and at least a broad-based knowledge of financials, investments, economics, and accounting as well as a basic understanding of human resource principles.

This is not to say that a CEO or senior official should know everything in terms of the operations of a company or even in each specific discipline.   However, one should at least know “what one does not know”.  In other words, know enough about the importance of accounting, finance, IT, or human resources that you know you will need to have an expert in the top seats of these divisions.

If the company is a service provider, the top officer should know who the customers are, who the prospective customers are, who the future customers will be, and what type of pain they are experiencing today as well as what they face tomorrow.   A service industry provides “service”.   So knowing what the customer needs to make his or her life easier is important for a top official.

If the company is a manufacturer, the top officer should have a strong understanding of the industry as well as past, present, and future trends.   Safety issues in the industry?   Then this must be understood and respected as well by the top officer.

Basic accounting, general ledger knowledge, as well as investment strategy are also important skills to have.   Of course there will likely be a CFO on board as well as a Chief Investment Officer, but the CEO needs a basic understanding of each of these disciplines in order to make certain that the people in these seats know their responsibilities as well as their limits, scope, and the risks their decisions hold.

In future posts we will look at additional facets of strong leadership that are important in forming success habits.

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Judy W Bell

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