How a CFO’s modular leadership approach can unlock business potential

By loosening their grip on power, CFOs may ultimately feel more in control of ensuring the company’s vitality.

Erin Clark and Mike Danitz

A business that is not optimising the conditions for its workforce to flourish and thrive may be seriously harming its own productive potential

4 min read

5:19PMApril 08, 2025

There’s often a misguided assumption at the heart of organisational design — specifically, that there’s a trade-off between employee autonomy and the level of control from the top.

But a new book, Leading Through: Activating the Soul, Heart, and Mind of Leadership (Harvard Business School Press, 2024) [1], argues that in an environment of constant change, leaders ought to focus on showing support for employees, empowering teams to take initiative and make their own decisions.

It may be easier for CFOs and other executives to exert control over people, as opposed to helping them unleash their potential. But leaders who model and cultivate such attributes as creative thinking and empathy may find that their employees can serve a crucial role in helping them see what’s around the next corner.

A business that is not optimising the conditions for its workforce to flourish and thrive may be seriously harming its own productive potential in a number of ways. But even those executives who see the issue, and think they are doing enough to address it, may not realise how deeply rooted and divisive the problem is.

The book advocates for reorganising by adopting a modular leadership system. The principle of modularity involves shaping the enterprise around teams. While those components may be designed independently, they are intended to work well as a whole.

Modularity, and the freedom that results from it, depends on making choices about the organisation’s structure and its use of authority. With a modular set-up, decision making is decentralised, with smaller units serving as the fundamental structure of the organisation.

For those teams to operate most effectively, three actions need to be taken:

Create a framework for action. Rather than being overseen by a coercive bureaucracy, team members rely on principles and guidelines—not rigid rules and extensive operating procedures. In addition, a system of accountability supports the teams-based structure, pushing the responsibility for improvement and innovation to the organisation’s front lines.

Make information visible. By sharing key information, companies ensure that teams can integrate with one another and work collaboratively, even across functions. There are at least four kinds of information: objectives (the organisation’s aims), standards (the organisation’s values), strategy (the purpose the organisation is pursuing), and context (the who, what, where, and how of the organisation). All of this information needs to be both accessible and transparent.

Define the role of power. Power is essential to leadership, but it can be expressed in many ways. In a modular system, it serves as a means of enabling and activating the potential in everyone. Making that kind of power a reality requires leaders and their teams to discuss how power is used—applying constant vigilance and focused attention so it invigorates the entire organisation. The modules ultimately serve to help undercut the notion that leadership means having power over others. The new thinking: leadership comes from empowering others.

Balancing Team Level Autonomy and Unity

Getting to that mindset requires a willingness to challenge accepted ways of doing things, and, at its simplest, rock the boat.

But it also involves a more personal touch. Good leadership involves fostering strong human connections, which the book defines as building and establishing connections and engaging with employees in genuine interactions on a day-to-day-basis.

Empathy, in turn, is a core ingredient in those relationships. An innately human trait, empathy cultivates a sense of belonging. By activating the soul of leadership, CFOs can build on universal values, making very explicit declarations of their values, beliefs, and purpose.

Over time, this new paradigm can help change people’s mindsets. They may begin to see and better understand not just some of the detrimental impacts of the power-over model, but also the benefits of trying a different type of leadership. Such leadership balances autonomy and unity to help employees do their best. For CFOs, who are typically anchored in rationality, efficiency, and control, it’s bound to take time to adjust to the model.

To be sure, a large part of the CFO’s job will continue to revolve around technology: adoption of AI agents and solutions, data management, data analysis, computer-assisted scenario planning, and the like. But CFOs should also consider how they can place more value on building intra-personal relationships and employee collaboration—tapping into employees’ collective humanity as part of their role.

Erin Clark is managing director, retired, Human Capital; Mike Danitz is principal, Finance & Enterprise Performance; both Deloitte Consulting LLP

As published by the Deloitte US Chief Financial Officer Program in the 22 February 2025 edition of The CFO Journal in WSJ.

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