The CEO-Ready CFO
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Many CFO’s aspire to be the CEO-in-waiting. Many believe that planning their career trajectory to incorporate operational management, or other experiences gained outside finance, is enough to achieve the apex of executive life. The challenges, however, confronting modern CEO’s—and Boards responsible for appointing them—can present signification barrier to such career strategies.
Today it is not enough for the CFO to be broadly experienced. In a corporate landscape that demands agility and pin-point judgement in the face of perpetual disruption, the profile of the successful CEO is changing. To be contenders, CFOs need to actively embrace values, perspectives and actions that may well be uncomfortable, unfamiliar, even unwelcome. Then, and only then, will they be CEO-ready.
Confound the Stereotype
Perhaps the greatest challenge confronting CFOs is the CFO ‘stereotype’ itself. That the CFO is a steward, a safe pair of hands. That the CFO views the world historically, rather than futuristically, that they look inward and focus on data. That they lack ease when communicating, and struggle to inspire others. That the CFO is technical, rather than humanistic. Even for outstanding CFOs who do not conform to this stereotype, breaking the preconceived perceptions of the Nominations Committee can be tough. The CEO-ready CFO must confound this stereotype. Those that do are more likely than their peers to be called on for promotion.
Agile in MInd, Adaptable in Learning
Modern CEOs venture outside established ways of thinking. This is critical in today’s business environment dominated by strategies of innovation and disruption. CEOs must consider multiple options when looking to meet future challenges and their judgement is the ultimate measure of success. Agile thinking is a precursor to CEOs creating agile cultures and workforces to embed business strategies.
Adaptability and agility are qualities that rarely drive the selection of CFOs and are less commonly tested during their tenure. This can place the CFO at a disadvantage when a new CEO is being considered. To break the stereotype, and ensure their preparedness, CFOs must take every opportunity to demonstrate these qualities in their career development programs. For example, the benefit of operational management experience lies not only in the additional responsibilities acquired, but also in the perspectives tested, learned, dismissed, honed and demonstrated.
For the modern CEO everything starts with vision. They weave and conceptualise a future strategy into a picture that calls others to action. Integral to their vision is the ability to articulate this captivating view, synthesising a vast array of sources and information, even if they conflict.
CFOs who have made the transition successfully embody this unreservedly. Rather than being challenged by the future, they embrace it. Their comfort with decisiveness is matched by a passion for leading collaboration and gaining support from other executives and from the Board. Conceptualising and envisioning are not always attributes acknowledged in CFOs yet they are essential to becoming CEO ready.
Leading and Empowering
Another signpost to the CEO-ready CFO is leadership. Development of leadership competencies can be a challenge for the CFO, as indeed it can be for many functional executives. Organisational hierarchies are often structured in a manner that reinforces the individual application of professional knowledge, particularly during early- to mid-career. The transition to leadership represents a fundamental shift for a functional expert: away from success-through-knowing and success-through-doing to success-through-others.
For CFO’s, ideally their relational skills will bring others together to common purpose. This may often be underpinned by delegating significant accountability to others. It may also be represented by a broad network of support cultivated outside with external stakeholders.
Judgement of Risk
A quality shared by many successful CEOs is the willingness to take risks. Indeed, CEO’s are more likely to be comfortable with calculated risk taking that other C-suite leaders, assuming it is a means to an end. CEO-ready CFOs are more persuasive than many of their functional peers. They are more comfortable with risk taking, even when doing so with imperfect information.
This ties back to adaptability. CEOs are increasingly called on to chart a forward course without the comfort of certainty. They are selected by Boards to meet this essential criterion. CFOs would be wise to carefully consider this attribute when considering their intended pathway to CEO.
How then to summarise the preparation required of CFOs to become CEO-ready? First, be yourself. There are, after all, many pathways to becoming a CEO. Second, preparation will never be just about the experiences of the CFO. Despite the premise of this review, no amount of preparation can manufacture an outcome if the core attributes are not present in a CFO. Third, no one acts – or succeeds – in isolation. CFOs would do well to cultivate wide-ranging relationships and support networks to demonstrate their inherent CEO attributes. They will be needed, tested, and relied on. Fourth, determine what is truly required of the CEO role you are seeking and adapt. The need for agility is paramount, often beyond the confining aspects of the traditional CFO career. And finally, look forward, talk forward, collaborate forward, lead forward. When all is said and done, becoming a CEO is a promise about the future.