For many finance chiefs, the role of Chief Financial Officer could offer a stepping stone to other challenges. Implementing a forward-thinking strategic career plan might be helpful for many CFOs looking to explore future opportunities.
David Cawley is the Regional Director for specialist financial services recruitment firm Hays. He has some advice for CFOs looking for new horizons – as it's a situation he's observed many times.
Hays surveyed 500 CFOs as part of their report, DNA of a CFO, and found that about 55 per cent would either like to stay in their current position or take on a higher finance leadership role.
Of those surveyed, 28 per cent have their sights set on a Chief Executive Officer, Chief Operating Officer, Managing Director or General Manager role. A smaller number - five per cent - want to start their own business.
“Typically, a CFO is already on the board of directors, but for those who are not, that's a pathway to consider," Cawley says. “Our research also suggests 70 per cent of CFOs want to broaden their remit to become involved in non-financial functions like IT, risk, compliance and procurement," he adds.
Moving into the top job
If you're a CFO thinking about stepping into a CEO or other senior role, there are some steps you might consider to best position yourself for new opportunity.
“It's important to think about how you can broaden your skill set. CEOs are seen as having really sound leadership, interpersonal and communication skills. When we're recruiting, those are typically the areas we are told the CFO needs to strengthen to make that jump into an operations role," Cawley says.
“For CFOs, the typical development area is around how they can be more outgoing, develop persuasive language and better interaction skills. This is different to the CFO role, which is more in the engine room of the business rather than being the front person, which a good CEO is," he adds.
The ability to develop and communicate a vision for the whole business is another area CFOs might need to develop when stepping into the CEO role.
“Great CEOs can articulate the vision in a compelling way to get buy-in from stakeholders. They are also able to craft the right message for different audiences, be that the board, the sales team or any other area of the business, often across multiple locations," Cawley says.
For CFOs hoping to transition effectively into the CEO role, it may be that they have to consider shrugging off typical CFO stereotypes.
Cawley considers the ones who do it best are those that are in tune with their own mind set and personality and continually seek ways to broaden the scope of their behaviours and cognitive abilities.
Going it alone
Creating a startup is another possible option some CFOs may consider. Some of the skills necessary to transition to this kind of role may closely resemble those required for a CEO role - such as the ability to communicate a vision to a wide range of stakeholders.
“There's certainly more pressure to communicate a vision when you are in your own business. If you're stepping out of your comfort zone of working for somebody else, then it's all about how you convey your message. When you are starting your own business, people need to be able to buy into you and your product," says Cawley.
“The skills you need to run your own business are wide and diverse. At the start, often the business owner needs to perform many different functions, which can be very different to a CFO role which is quote focused," he adds.
Another big difference is the size of the team. Startups can often just involve the Founder; but over time, the team might grow and the business owner may need to create appropriate roles in the business and to manage the team effectively.
This role is quite unlike many CFO roles which involve the management of many different people, with very discrete responsibilities. Startup culture often means that everyone is expected to pitch in to do whatever is required to get the business off the ground.
“People need to know they are part of the journey," he advises.
There's some common errors that are committed by many CFOs as they step into a new role, Cawley says. He believes a frequent problem is not properly transitioning out of their previous role.
“Sometimes we see CFOs who don't transition completely into a CEO role; and they tend to move into something like a COO role, where they've still got the finance function and they can't get over the temptation to not replace themselves," he adds.
According to Cawley, when the transition is done well, a CEO moves on as part of natural attrition and leaves a natural vacancy that the CFO is the best person to fill.
“More and more, boards of directors want CEOs to have a chartered accountant or certified practicing accountant qualification. This should open the door for more finance professionals to be able to make that transition," he explains.
Cawley believes that having strong networking skills are helpful in the role and that is often an area that CFOs may need to address.
“CFOs can be good at networking within the finance world, but they may not look to build relationships outside that sphere. Also, they may not attend physical events or see the value in social networking, whereas people from outside finance often appreciate the value of face-to-face interactions.
“Great CEOs are very comfortable in their own skin and enjoy face-to-face networking. Developing these skills is a good way to build up those areas and become an attractive CEO," he says.
No matter what sort of position you aspire to, building strong interpersonal and soft skills could offer an advantage when it comes time to successfully transition into any new role.
Those that can successfully do that, may well put themselves in a strong position to transition out of the finance function and into potentially new and exciting opportunities.
- Build your ability to communicate a vision.
- Develop networks across many areas of business.
- Consider opportunities outside finance such as setting up your own startup.