Dealing with shortage of business leaders in S'pore

PHOTO: Dealing with shortage of business leaders in S'pore

SINGAPORE - Singapore is fast becoming a leading global finance hub.

By last year, almost 3,000 financial institutions had registered with Singapore's monetary authority for one activity or another.

The Economist reported that trading of foreign exchange-related products had jumped exponentially since 2005 - 29-fold in retail market and 43-fold for interest rate-related ones.

Progress shows no sign of slowing.

Financial consultancy Wealth Insight predicted at the beginning of this year that Singapore could surpass Switzerland as a financial centre by 2015.

It is not a far-fetched idea; uncertainty in the eurozone continues unabated while Switzerland is the subject of constant investigations into its offshore accounts.

Meanwhile, Singapore is already the finance hub for Asean and last year US$80 billion of foreign investment flowed into Asean nations, chasing the Chinese figure of US$105 billion.

Moreover, it is not just finance.

A World Bank study last year ranked Singapore the best country in the world to do business for the seventh consecutive year, and a NatWest study named it the best place for entrepreneurs to start up.

It is therefore little surprise that there are reports of a shortage of business leaders in Singapore.

It is not a dearth of talent but a case of demand outstripping supply.

While this is good news for those nearing the top of the corporate ladder, some will be understandably concerned about taking the next step up to the C-suite.

Leadership demands skills not always required of lower levels and sometimes not given a chance to develop.

This is one reason business mentoring programmes are on the rise.

Increasingly, organisations are recognising that one of the best investments they can make is in their next generation of leaders.

One problem faced by many professionals, but especially technical specialists such as finance professionals, is that the skills for which they are hired often need to be supplemented with others in order to progress.

Over the past few years, we have seen an evolution in the role played by the chief financial officer (CFO) in a company.

Once it might have been enough to be in charge of the finance function and nothing more, but in the 21st-century company, the CFO is no longer "head bean counter".

Not only is it a leadership role, demanding strategic thinking and a skill set far beyond technical expertise, it is also often the final step before taking on the very top role in an organisation.

This brings with it new demands.

CFOs must think strategically as well as tactically, and communicate that strategy.

Increasingly, they must be the face of a company to investors, bankers or regulators, requiring diplomacy and relationship-building skills.

As "co-pilot" with the chief executive officer, they will need to act as counsellor, to influence, to assess evidence and to see the bigger picture.

The problem is that these vital skills are not developed overnight, and may not necessarily be fostered along the career path to CFO.

Added to this, there is a notable lack of quality-endorsed mentoring programmes in the market and a recognition that the skill of mentoring is underdeveloped within the internal resources of many companies - to this end, the recent announcement of the support of the Singapore CFO Institute to such programmes is most timely and welcome.

Research has shown that mentoring is one of the most effective ways to improve performance in a leadership role.

This is not surprising; just by being there, a senior high-flying mentor demonstrates what can be achieved, how aptitudes can be harnessed and new skills learnt in order to become a successful leader.

Also, having spent time in the boardroom environment they can explain what is necessary above and beyond financial expertise, and the worth and importance of diplomacy and managing boardroom dynamics.

Finally, external mentors are well-placed to provide impartial assessment and advice.

This is particularly important; up until this stage in their careers, executives are likely to have been mostly interacting with internal colleagues, who have a high level of understanding of their business and sector.

However, as a CFO they are far more likely to deal with people who are not as steeped in the detail.

The problem with only working with people "in the know" is that it can be easy to forget that not everyone has that intimate level of understanding of a business.

However, the benefit of having to explain things at a "bigger picture" level is that it can often lead to new ways of thinking about problems - "thinking outside the box" is a business cliche, but new ways of looking at things are always beneficial.

Another key benefit a mentor can offer is context.

When mentors are drawn from successful CFOs or other senior roles, such as board members, they are in a position to see how finance fits into the overall strategic plan for a business.

Having already tackled many of the challenges that will face a future leader, mentors are also in a position to offer a sense of perspective and encouragement, especially when things look demanding at first sight.

Furthermore, experience in a multinational company will mean that they are able to place things in a global context, not only explaining how to deal with the global economy as a whole and dealing with the complexity that it offers, but addressing softer skills such as working across different cultures sensitively and diplomatically as well.

As Singapore cements its position as a global financial centre, it will come to rely on its CFOs and senior finance professionals more than ever before.

Having a pool of highly skilled finance professionals is vital, but not all skills can be learnt in an academic environment; some can only be developed on the job and in real time.

However, this need not mean being thrown in at the deep end.

Mentoring programmes offer a chance to learn in an impartial environment from business leaders who are at the top of their profession.

By investing in the next generation of leaders, Singapore's businesses can rest assured that even in the face of an increasingly uncertain global economy, they are helping ensure that current growth and prosperity continue for the region and that the country continues to compete for the position of leading global financial centre.