There are almost as many initiatives to make executives better leaders as there are executives. Some theories focus on personality, others on skill. A recent entry into the mix proposes a connection between how executives inherently view money and the way they make management decisions.
E. Ted Prince, a former CEO with 20 years' experience and author of The 3 Financial Styles of Very Successful Leaders (McGraw-Hill, 2005), has been studying the relationship between executive behavior and corporate performance since 2002. He contends that managers possess innate financial traits that make up their "financial signature." Some people, like Wal-Mart's Sam Walton, are natural discounters — they're thrifty and focus on low-value, low-margin opportunities. Others, like Apple's Steve Jobs, have venture-capitalist tendencies — they look for high-risk, high-reward opportunities requiring lots of capital.
Identifying your fundamental financial style is the secret to achieving success, claims Prince. Understanding your financial signature tells you what your natural response will be when confronted with situations involving risk/reward and cost/benefit, he says.
The classification is innate and fixed, says Prince, so putting a natural risk-taker into a corporate environment that calls for conservative management can be a recipe for disaster. "All the MBAs from the best business schools in the world cannot offset the impact of unconscious financial drivers," argues Rob Kaiser, a partner at management consulting firm Kaplan DeVries, in a recent article for Personnel Psychology. Instead, explains Prince, executives need to pick companies with a mission and a culture that fit their financial style. (For another view of decision-making, see Insight.)
There is some hope for those whose style clashes with their company's needs. According to the author, once executives are conscious of their intrinsic financial style, they can resist those tendencies and make decisions that benefit the company. In other words, while executives' views are inherent, with some work, behavior can change.