Byron Kalies

Executive Stress

First appeared in ‘CFO’ (Australia)

Almost eighty years ago Walter Cannon, came up with the phrase ‘fight or flight’, to describe reactions to stressful situations. This appears to be a hangover from primitive times when man needed to react aggressively to survive. This simplistic view of stress argues that in the face of a demanding situation there is a reaction set up by a region of the brain known as the hypothalamus. This triggers a number of events in the body. For instance large amounts of adrenalin are discharged into the blood stream, the blood thickens and is pumped to important and essential organs systems especially the muscles.

These actions are designed to help the body cope with this ‘fight or flight’ dilemma. This theory is still the main model used today, largely unchallenged and has been interpreted for modern financial executives as follows;

A stressful situation arises – these days its more likely to be a CEO demanding financial reports urgently rather than a lion attack - and the executive receives all the extra adrenalin, blood rush etc but cannot fight the CEO or run away so has to respond calmly and rationally to the situation. This causes the adrenalin to stay in the system unused and eventually causes real physical problems – headaches, ulcers etc. as well as potential psychological and behavioural problems.

David Ray, CFO of Uecomm Pty Ltd. very openly describes how this affected him;

I realised one day how ugly my behaviour could be if stress was allowed to manifest itself and ignite my short fuse and my tendency was effectively to ‘blow up’. I have found that when I become frustrated by a situation that has been brought about by lack of knowledge or unclear communication followed by lack of time to clarify and correct, I can tend to lash out. In the past it has been hard to pull myself up and change my behaviour. However, I did use the services of a coach, who was able to assist me with combating stress. I now use ‘mirrors’ (confidantes across the company) who I can trust to pull me up on my behaviour (good and bad) and to give me honest and constructive feedback. I am since very mindful of the need to quell what could be seen as an “aggressive” leadership tendency.

Stress can be incredibly traumatic and is estimated to cost literally billions of dollars per year. However, stress isn’t always bad. People need some stress in their life. In the Stress-Performance curve below this clearly indicates the relationship between stress and performance. Too little stress leads to the opposite of burnout – rustout. There is also a condition known as ‘psychological toughening’. This suggests that intermittent stress leads to stress tolerance later. Rats who were ‘toughened’ by having to swim in cold water for up to 14 consecutive days showed less stress when compared with rats who had received no prior swimming when they were both exposed to cold water.

This element of needing some stress to perform seems to resonate with many people. As Michael Bencsik, Chief Financial Officer of HSBC Bank Australia describes it;

Stress tends to have a positive impact on my work ethic because it encourages me to perhaps work harder to achieve the desired outcome. I believe that to be an effective CFO, stress is an important enabler as it tends to set a performance expectation level to staff to raise the level of their output.
There is an element of increased ‘positive’ stress when you are in a senior position to effect change within the bank. It comes from the increased responsibility placed by the Board and shareholders in managing the financial stewardship of the Organisation and balancing this with the expectation from staff that they look to you with confidence that you are able to provide the proper leadership, guidance and communication.

Research shows that there are people who are far more comfortable dealing with stress than others. One of the underlying reasons some people cope better than others is support. This is borne out by Patricia Galloway CFO and CEO of The Neilsen-Wurster Group;

It’s very important to have people to talk to. I feel I’m incredibly lucky as I have a very understanding husband who knows the business, the pressures, and a dog that doesn’t.

Another major factor in determining stress levels comes from the concept of control. Studies on Formula One racing drivers show that the most stressful time isn’t at the start, or overtaking – it’s in the pit lane when refuelling. It’s the only times in the race where there have to relinquish that control.

Occupational psychologist Cary Cooper;
Senior managers have “a sense of control” … they feel they’re involved in decision-making“ Research over the last couple of decades has shown that people who feel they have no control, no autonomy over the job they do in the work place are likely to get a stress related illness.

David Ray’s experiences would support this;
My previous role was as Commercial Evaluation Manager. Our organisation relied heavily on this function to approve new customer connections and I could see the area becoming more and more of a bottleneck. At the same time, I couldn’t help myself getting involved in every project that was on the go. I wanted to control everything and work on everything and ended up pleasing no one. Realising this, I set a vision for how I wanted to automate parts of our functions and relied on my second-in-charge to take on my plans and make them a reality, providing them with sufficient guidance and training to ensure they were supported in delivering on this.

Michael Bencsik has a similar experience;
One of the constants in a CFO role is change which is increasing in pace, depth and breadth. Working within a global bank and managing customers and businesses across geographic boundaries produces various risks and opportunities. I tend to have less stress where I am familiar with the cause and effect levers within my immediate local environment. As HSBC is a global organisation, my matrix reporting lines into London, Hong Kong and the US increasingly give rise to changes in the level of stress myself and the team experience particularly where you are dealing with novel, ambiguous or complex information. Being effective in navigating the political landscape of the global business environment and having time to appreciate the cultural subtleties and nuances when working across countries with your internal peers, helps reduce stress. In addition, reporting to the CEO increases a CFO’s control over his environment because we are in direct communication with the ultimate influencer over the company, the CEO.

Patricia Galloway was asked for an occasion where she felt most stressed. This occurred whilst she became the first woman President of the American Society of Civil Engineers (ACSE);

A few years ago I became president of ASCE and found it very rewarding but very stressful. I had little control over engagements, travel, expert witness testimony, etc… After a few years (1 year to help, 1 year to do and 1 year to advice) I was relieved to return to the normally stressful CFO and CEO role. I probably had more travel, more deadlines to meet but more control. I felt a lot calmer now that I had more control of my schedule.

In some ways senior financial officers seem to have the worse of both worlds. The stress associated with senior management and lack of control applies to them but also there is a special type of stress specifically related to the role.

Patricia Galloway;
Finance is extremely stressful. Managing money is a very stressful item. You always have to keep your eye on the bottom line. You need to make sure you’re constantly on top of things with invoices etc…An added burden for CFOs is facing a lot of questions from the board, shareholders wanting to know why things can’t be done better, cheaper, etc.

David Ray;
Companies tend to have very little understanding of the daily stress experienced by Finance teams, however to be frank, we don’t tend to effectively communicate our plight nor educate them as to how they can help us better.

Everyone has their own strategies for managing their stress levels. This tends to involve redressing the balance between work and outside work;

David Ray;
On a personal level I deal with stress by playing Aussie Rules football for my local club – exercise is a great stress reliever.
My faith in God plays a huge role in managing stress. Through that, I acknowledge that I can’t control everything.

Michael Bencsik;
It is easy with my job to be on call 24 hrs a day, so I switch off my blackberry on weekends and spend quality time with my wife and kids and friends. I have a range of outside interests which help me to balance stress and work. I undertake a lot of sailing namely ocean racing with a crew of 10 or a 40 ft yacht. I am on the Board and treasurer of a children’s charity ‘Barnardos Australia’. These activities provide a sense of perspective in work matters to issues outside of work.

Perhaps the best way of managing stress comes from the job. This job itself is hardly likely to go away. As Patricia Galloway concluded;
Perhaps the reason I don’t feel so stressed with my job is because I love what I’m doing.