Empathetic Listening: Enhancing Financial Leadership

In the fast-paced world of modern business, finance teams often find themselves racing against the clock, and it's all too easy for finance leaders to become engrossed in the realm of numbers and analytics.

But what truly distinguishes excellent leaders is their capacity to prioritize empathy and emotional intelligence. It’s important to remember that your role as a finance leader extends beyond just managing finances — you’re also responsible for shaping and nurturing the emotional culture of your organization. Finance leaders have to strike the right balance between the necessity for swift, data-backed decisions and the imperative to cultivate authentic relationships with our teams, stakeholders, and partners. This equilibrium allows leaders to align on goals and effectively drive organizations forward.

It starts with empathetic listening

Empathetic listening, sometimes referred to as active listening, is a communication technique that goes beyond merely hearing the words being spoken. It involves fully engaging with the speaker, paying close attention to their emotions, perspectives, and needs, and providing a supportive and non-judgmental environment for open dialogue. 

Empathetic listening isn’t natural for most people. It’s a skill that’s cultivated and developed over time — and it takes practice.  The ability to listen well and foster open communication and trust is arguably one of the most important skills a leader can possess. When colleagues, stakeholders, and partners feel heard, stronger relationships are built. It also enables you to better understand diverse perspectives and ultimately make more informed and well-rounded decisions. 

How finance leaders can practice empathetic listening:

• Be present: Next time you're in a conversation, try to eliminate distractions and give your full attention to the speaker. Maintain eye contact, and give your undivided attention to the speaker.
• Listen without judgment: Focus on understanding the speaker's perspective, even if you don't necessarily agree with it. Try to find the common ground and start there — proactively highlight where there is alignment. That way, you can avoid the perception of a CF-No and foster more open dialogue.
• Practice patience: Allow the speaker to finish their thoughts before responding, and avoid interrupting or finishing their sentences.
• Reflect and clarify: Paraphrase the speaker's message to confirm your understanding, and ask open-ended questions to clarify any ambiguities.
• Validate emotions: Acknowledge and validate the speaker's emotions, showing that you care about their feelings and experiences.
• Follow up and maintain communication: After a conversation, follow up with stakeholders to ensure their concerns have been addressed and to keep communication channels open for future discussions.

Becoming a more empathetic finance leader

Finance leaders are naturally adept at dealing with numbers and complex financial strategies. However, to truly stand out, leaders need to cultivate a deep understanding of the people behind the numbers: team members, stakeholders, and even themselves. 

Developing empathetic listening skills begins with self-assessment and self-awareness. Reflect on your current communication habits, identifying areas where you excel and areas where you can improve. Emotional intelligence is a critical component of empathetic listening, as it encompasses the ability to recognize, understand, and manage both one's emotions and the emotions of others. 

So, how do we become more empathetic listeners? Try these techniques and exercises to develop your skills:

Role-play scenarios: This may feel a bit awkward at first, but role-playing exercises can be extremely beneficial. They provide a safe space to practice empathetic listening and receive immediate feedback. Try it with your team or a mentor and see how it impacts your communication skills.

Seek feedback: This one may seem simple, but it's often overlooked. Don't hesitate to ask your team, peers, or other stakeholders for their honest feedback on your listening skills. It's not always easy to hear, but it's invaluable for growth. Getting honest and helpful feedback, especially from subordinates on your team, requires an environment that encourages and facilitates such communication. While face-to-face discussions can often be effective, alternatives like Google Forms or other tools for anonymous feedback can also be helpful to ensure a safe space for people to provide feedback.

Set listening goals: As finance people, we love measurable goals. Apply that love to improve your empathetic listening skills. You can even implement software such as krisp.ai or Fireflies to measure how much speaking vs. listening you’re doing on a call.

Learn from others: Observe and learn from other empathetic listeners around you. These could be mentors, peers, or even leaders from different fields. There's no one-size-fits-all approach, so try to incorporate various techniques into your communication style.

Prioritize empathetic listening as a key leadership skill

In the whirlwind of balance sheets, KPIs, and strategic planning, it's easy to overlook the human element of our work. But the role of finance leaders has become increasingly multifaceted, extending beyond the confines of financial expertise alone. It's about navigating the emotional landscapes of our teams, stakeholders, and partners, fostering an environment of open communication, understanding, and mutual respect.

By prioritizing empathy and emotional intelligence, we not only become better listeners but also more effective leaders. We gain deeper insights, make more informed decisions, and cultivate stronger, more productive relationships.