Leading In A Time of Uncertainty
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January 2023

Leading In A Time of Uncertainty

On the heels of a busy and wet week at JPM I was struck by how much the world and investor sentiment has changed in the last twelve months. Inflation, macro uncertainty, and worry about global economic growth color the sky with grey (perhaps poetic given the recent avalanche of storms here in California). Amidst the challenging environment the focus on operational excellence was palpable. Hearing war stories about right-sizing business models for growth, implementing phase gate rigor to allocate R&D spend, and eliminating waste and inefficiency as a funding means in the absence of “free money” caused me to reflect – what might history tell us about the best leadership teams, and the ability to navigate choppy waters. To answer this question we enlisted our research team at Kingsley Gate Partners to review hundreds of interview transcripts and correlate on 5 best-in-class leadership competencies that increase enterprise value when practiced by CFO leaders. These competencies fall into the category of Managing Performance and can be measured against the following model behaviors which we observed with a high level of consistency from the highest performing peer group. 

What Effective Leaders Do: 

1)     Clarify Roles: Ensures that all employees understand their goals starting with their own teams. Ensure each person understands the importance of their role to the team’s success. Clearly defines duties and responsibilities.

2)     Lead pro-actively: Takes timely action to address performance issues. Holds people and self for poor performance and appropriately rewards superior employee performance while moving out weaker performers in as humane of a manner. Recognizes that “war-time” leadership requires direct communication lines, empathy, resolve and courage. 

3)     Manage stress and emotion:  Even in emotionally charged conflict situations, gets quickly to the underlying issues and maintains focus on resolution. Suggests solutions to conflicts that are consistent with enterprise goals and acknowledges that there may be perceived grievances and winners-losers within the company (i.e., directing resources to one project/group over another).

4)     Take Calculated Risk: Makes good decisions with incomplete information and appropriately weighs short and long-term consequences. Resists temptation to simply follow the “prevailing norm” and acts with courage – will take contrarian views when one’s calculated assessment calls for unpopular or unconventional paths forward. 

5)     Demonstrate confidence and humility: Shares information through open, give-and-take discussions; is candid and truthful with others; encourages people to speak up even when their opinions differ from the majority; tests his/her understanding of others’ viewpoints before stating own opinion.

Leaders should take stock of their teams and encourage these behaviors through their own action. With the right mix of leadership, grit and sacrifice I am confident brighter days are ahead for those companies that embrace the new reality as an opportunity for growth and transformation.

Ed Montoya
Senior Partner and
Global Financial Officer Practice Leader