Making the transition from cfo to ceo
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The document discusses the transition from CFO to CEO and the challenges CFOs face. It notes that CFOs have increasing demands on their time from regulatory requirements, strategy, and managing teams. While many CFOs aspire to become CEOs, the skills required for each role differ - CFOs focus on finance expertise while CEOs require broader leadership, operational knowledge, and vision. Experience in multiple roles and companies can help CFOs appeal as CEO candidates during times of strategic change like turnarounds or acquisitions.
Making the transition from cfo to ceo
- 1. Making the Transition from CFO to CEO November 2014
- 2. A Market Perspective • Demands are growing and deadlines are shrinking • Heightened market activity requires extra attention • Increased regulation means more detailed audit documentation and ridiculous filing deadlines • Spending enough time with direct reports and creating the right team beneath the CFO is becoming more of a challenge • Increased need to operate at both macro and micro levels • Delivering strategy is about driving financial performance - need for more analytical firepower • Being robust and independently-minded often means finding yourself between a rock and a hard place 2
- 3. 3 Increasingly, CFO’s face a Tsunami of information needs
- 5. The Key Challenges CFOs face 5 % 0 10 20 30 40 50 Balance sheet management expectations Compliance and risk management expectations Finance function service delivery expectations Expectations to play a leadership role in the company Others
- 6. Everyone wants a piece of the CFO 6 Other C-suite executives Chief Strategy Officer Heads of divisions Chief Operating Officer Chief Financial Officer Outside of the CEO, which other executives should board members form relationships? Other board members Executive Vice Presidents
- 7. Where CFOs Spend Time with the Board 7 Regularly Scheduled Financial Updates 71% Strategic Discussion 13% Responding to Ad Hoc Requests 6% As Board Member 10% What is the Main Purpose of Your Time with the Board?
- 8. There is an Increasing Conflict Between Where CFOs Want to Spend Their Time and the Actuality 8 Top People Priorities for CFOs Direct Reports CEO Functional Heads GMs
- 9. Today’s CFO is Expected (and Aspires) to be a Leader • 'More than half of European finance chiefs want their next career move to be the step up to CEO' • 'A finance/accounting background is still the most frequent route to the top in the UK. In 2006, 38% of CEOs had a finance/accounting background - 45% of those CEOs appointed internally' • 'The best and brightest finance executives, especially those with leadership potential, will not be content to spend their career in a transaction-processing factory' • 'Without time spent on development by CFOs, there is no way finance and leadership can ever be synonymous' • 'The goals associated with CFO Leadership Development are very common across industry and for small or large global enterprises - however the approach to reaching those goals varies dramatically' 9
- 10. Do You Want to be a CEO? 10
- 11. CFO & CEO Competencies 11 Finance expertise Structured approach to people management Less empathetic management tendencies Analytical decision-making Strategic intelligence Analytical Action-focused Leadership Presentation skills Operational knowledge Understanding of regulatory environment Integrated company-wide Demonstrates tolerance of ambiguity and intuitive decision-making Builds teams Visionary Demonstrates high energy and confidence Broader responsibilities Sales and marketing capabilities CFO CEO
- 12. CFO’s are Perceived as Good Candidates for the CEO Role When Financial Issues are Core to Strategy 12 Turnarounds or M&A growth programs 71% Business as usual 29% CFOs promoted to CEO during the following situations1
- 13. Most CEOs with a CFO Background were Promoted within the Same Company 13 36% 42% 11% 11% Moved to CEO role within the same company Moved to CEO role from other company Moved to CEO role directly from CFO position Moved to CEO role from other position CEOs with prior experience as CFOs1
- 14. Experience in More Than One Role and More Than One Company Broadens a CFO’s Appeal as a CEO Candidate 14 Experience in finance and general management from >1 company 69% Experience in finance only from >1 company 22% Experience in finance and general management from only 1 company 9% CFOs promoted to CEO during the following situations1
- 15. What Does the CFO of the Future Look Like? 15 Market Environment Business Strategy Finance Tools Experience Skills & Capability Attitude Pressures and Influences Career Implications
- 16. Contact Details 16 John Colvin Principal E: jcolvin@johncolvin.com.au M: +61 409 183 174 S: +61 2 8823 3485 Level 36, Governor Phillip Tower 1 Farrer Place, Sydney NSW 2000, Australia Sandra Heinig Senior Associate E: sh@johncolvin.com.au M: +61 416 731 897 S: +61 2 8823 3485 D: +61 2 8823 3487 Level 36, Governor Phillip Tower 1 Farrer Place, Sydney NSW 2000, Australia Sian O’Shaughnessy Research Analyst E: sian@johncolvin.com.au D: +61 2 8823 3485 Level 36, Governor Phillip Tower 1 Farrer Place, Sydney NSW 2000, Australia