BY PETER BARTRAM
As CFOs become increasingly influential across businesses, we outline some top tips for progressing to the CEO’s chair...
1 Focus on the opportunity
CFOs who move into the CEO’s chair develop their careers so they have the skills to do so. Former CFO Christine Hodgson, CEO of Capgemini’s application services business in the UK and chairman of Capgemini UK, looks on a CFO’s work as a stretching from a chief accountant role to COO: “I was always comfortable doing an operational CFO role.”
Jennifer Price, who leads the finance practice at Archer Mathieson, an executive search consultancy, advises: “An ambitious CFO should consciously seek out a CEO who is willing to mentor and work with them as part of a succession plan. However, some CEOs may be protective of their position, unwilling to assist.”
Nik Pratap, director at recruitment specialist Hays Senior Finance, says: “If you are considering an external move, it is important to network and develop your profile through good PR.”
2 Get an external perspective
“As CFO, don’t lock yourself away in the back office and become buried in the detail. Be very much the right hand of the CEO,” says Hodgson. “Learn about the external market by interacting with the whole supply chain.
“A really good CFO is one that’s visible externally. He or she is not just a person who is recording what’s going on, but is a person who is out there being involved in negotiations and client relationships.
“Build a top team around you so that it gives you the headroom to become more externally focused.”
3 Understand the business’s operating model
“CFOs are well placed to become CEOs because they have a good grasp of all aspects of the business,” says Hodgson.
Nick Jarman, lead partner in PwC’s finance function effectiveness team, says: “Being CFO is a great foundation for understanding the drivers of value in the business. Of all the board members, the CFO should be the person that understands the levers to pull in order to make a business profitable.”
But Jarman adds: “However, being a CEO requires a very broad skill set and any CFO who wants to transition to CEO may need a change of perspective in terms of the skills that got them to CFO.”
Colin Turner, professor emeritus of entrepreneurship at Theseus International Management Institute, points out that CFOs tend to look at the detail while CEOs must view the bigger picture. “When the micro eye for detail can be blended with the macro eye for strategic opportunity, the shareholders and the company are winners.
“The secret in replacing the CFO hat with a CEO hat is to think strategically, not operationally.”
4 Build a top team around you
“If you don’t have a strong team, you’ll never be successful in any role,” says Hodgson. “Surround yourself with very clever people who are going to challenge you and be self-motivating. Feel comfortable about having people around you who want your job – don’t feel threatened by it.”
Dave Way, managing director of accountancy and finance recruiter Narks Sattin, says succession planning can sometimes prove an obstacle to a CFO wanting to move up as CEO. “If as CFO you’re absolutely integral to the smooth running of your department, the board may baulk at the prospect of removing you from your current role.”
The solution, says Way, is for the CFO to recruit a capable finance team to take over. “You’re showing not only that you can build teams and plan for the future, but also that your appointment as CEO won’t have any adverse consequences.”
5 Become a great communicator
“As CEO, externally, you are the ambassador for the brand and internally you are the one that should be rallying the troops in good times and bad,” says Hodgson. “So communication becomes a much bigger part of your role than it would have been before.”
Price urges CFOs to work on improving their communication skills. “CEOs need to be good orators and quick thinkers with the ability to adapt their style to a wide constituency of groups,” she says.
“Practice makes perfect, so sharpen your skills in this area with some personal coaching and put yourself forward to speak at industry events.”
6 Be a strong leader
“The biggest single difference in moving from CFO to CEO is that, suddenly, everything stops with you,” says Hodgson. “Initially, that can be slightly unnerving and a little bit lonely. But you become comfortable with it.”
Cris Beswick, an entrepreneur and consultant who works with CEOs to improve their performance, says: “Probably the biggest single challenge for a CFO moving into the CEO role is understanding just how critical the role is to driving forward the right culture, vision and values of the organisation.” So a CFO stepping into a CEO’s shoes will face pressure to uphold the vision of the organisation.
7 Acquire the decisive gene
“As a CEO you need to be decisive, but you won’t be good at being decisive unless you listen to all sides of an argument,” cautions Hodgson. “You need to know when you’re wrong and how to make adjustments. However strong your team is, there will be days when things go wrong and it will ultimately be your responsibility. You must have a very steady nerve, otherwise it could become overwhelming.”
Beswick adds: “Initially, it can be very challenging for CFOs to manage the organisational landscape in the way a CEO needs to, because they do not have the same relationship with the senior management team and employees, so must work at integrating very quickly.”
8 Become a people person
“Try to nurture talent and be a supportive leader,” says Hodgson. “That doesn’t mean you’ve got to be soft.”
Pratap says: “CFOs will need to demonstrate that they have the ability to inspire employees by focusing on areas such as employee engagement – not only within the finance function but across the whole organisation.”
Jarman says: “By their nature, CEOs are expected to bring a sense of optimism and purpose.” In contrast, many CFOs are naturally prudent and cautious having developed in an environment of statutory financial information.
CFOs who move into the CEO’s chair develop their careers so they have the skills to do so. Former CFO Christine Hodgson, CEO of Capgemini’s application services business in the UK and chairman of Capgemini UK, looks on a CFO’s work as a stretching from a chief accountant role to COO: “I was always comfortable doing an operational CFO role.”
Jennifer Price, who leads the finance practice at Archer Mathieson, an executive search consultancy, advises: “An ambitious CFO should consciously seek out a CEO who is willing to mentor and work with them as part of a succession plan. However, some CEOs may be protective of their position, unwilling to assist.”
Nik Pratap, director at recruitment specialist Hays Senior Finance, says: “If you are considering an external move, it is important to network and develop your profile through good PR.”
2 Get an external perspective
“As CFO, don’t lock yourself away in the back office and become buried in the detail. Be very much the right hand of the CEO,” says Hodgson. “Learn about the external market by interacting with the whole supply chain.
“A really good CFO is one that’s visible externally. He or she is not just a person who is recording what’s going on, but is a person who is out there being involved in negotiations and client relationships.
“Build a top team around you so that it gives you the headroom to become more externally focused.”
3 Understand the business’s operating model
“CFOs are well placed to become CEOs because they have a good grasp of all aspects of the business,” says Hodgson.
Nick Jarman, lead partner in PwC’s finance function effectiveness team, says: “Being CFO is a great foundation for understanding the drivers of value in the business. Of all the board members, the CFO should be the person that understands the levers to pull in order to make a business profitable.”
But Jarman adds: “However, being a CEO requires a very broad skill set and any CFO who wants to transition to CEO may need a change of perspective in terms of the skills that got them to CFO.”
Colin Turner, professor emeritus of entrepreneurship at Theseus International Management Institute, points out that CFOs tend to look at the detail while CEOs must view the bigger picture. “When the micro eye for detail can be blended with the macro eye for strategic opportunity, the shareholders and the company are winners.
“The secret in replacing the CFO hat with a CEO hat is to think strategically, not operationally.”
4 Build a top team around you
“If you don’t have a strong team, you’ll never be successful in any role,” says Hodgson. “Surround yourself with very clever people who are going to challenge you and be self-motivating. Feel comfortable about having people around you who want your job – don’t feel threatened by it.”
Dave Way, managing director of accountancy and finance recruiter Narks Sattin, says succession planning can sometimes prove an obstacle to a CFO wanting to move up as CEO. “If as CFO you’re absolutely integral to the smooth running of your department, the board may baulk at the prospect of removing you from your current role.”
The solution, says Way, is for the CFO to recruit a capable finance team to take over. “You’re showing not only that you can build teams and plan for the future, but also that your appointment as CEO won’t have any adverse consequences.”
5 Become a great communicator
“As CEO, externally, you are the ambassador for the brand and internally you are the one that should be rallying the troops in good times and bad,” says Hodgson. “So communication becomes a much bigger part of your role than it would have been before.”
Price urges CFOs to work on improving their communication skills. “CEOs need to be good orators and quick thinkers with the ability to adapt their style to a wide constituency of groups,” she says.
“Practice makes perfect, so sharpen your skills in this area with some personal coaching and put yourself forward to speak at industry events.”
6 Be a strong leader
“The biggest single difference in moving from CFO to CEO is that, suddenly, everything stops with you,” says Hodgson. “Initially, that can be slightly unnerving and a little bit lonely. But you become comfortable with it.”
Cris Beswick, an entrepreneur and consultant who works with CEOs to improve their performance, says: “Probably the biggest single challenge for a CFO moving into the CEO role is understanding just how critical the role is to driving forward the right culture, vision and values of the organisation.” So a CFO stepping into a CEO’s shoes will face pressure to uphold the vision of the organisation.
7 Acquire the decisive gene
“As a CEO you need to be decisive, but you won’t be good at being decisive unless you listen to all sides of an argument,” cautions Hodgson. “You need to know when you’re wrong and how to make adjustments. However strong your team is, there will be days when things go wrong and it will ultimately be your responsibility. You must have a very steady nerve, otherwise it could become overwhelming.”
Beswick adds: “Initially, it can be very challenging for CFOs to manage the organisational landscape in the way a CEO needs to, because they do not have the same relationship with the senior management team and employees, so must work at integrating very quickly.”
8 Become a people person
“Try to nurture talent and be a supportive leader,” says Hodgson. “That doesn’t mean you’ve got to be soft.”
Pratap says: “CFOs will need to demonstrate that they have the ability to inspire employees by focusing on areas such as employee engagement – not only within the finance function but across the whole organisation.”
Jarman says: “By their nature, CEOs are expected to bring a sense of optimism and purpose.” In contrast, many CFOs are naturally prudent and cautious having developed in an environment of statutory financial information.
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