Career Paths: What it takes to go from CFO to CEO
In my life as a senior finance recruiter, first in London and now Melbourne, I meet a lot of CFOs and see different career paths. Some see the top job in finance as the main goal, but others have their eye on a CEO role and often ask my opinion on making the leap. Here’s the essence of my advice:
Go for breadth over depth
Get experience in a range of companies and in different, but complementary sectors. Running the finance department in an ASX listed or large corporate will give you rigour, structure and oversight experience; while being CFO in a mid-market private company offers wider responsibilities and a chance to remain close to the business in a hands-on role. The top job in a start-up is different again. You’ll often have a broader remit in a flatter management structure, so you can hone your entrepreneurial skills. Gaining experience in digital businesses, high-growth environments and merger or acquisition activities is also a plus, along with investor relations and capital raising expertise.
Here Click Energy CFO, Paul Forsyth, talks about the diverse experience gained in his career, his stint as interim CEO at Lumo Energy and the importance of engaging teams for business success.
Put people and relationships first
Many CFOs are accountants by discipline and people skills aren’t always well developed early in their career when they may be focussed on technical mastery. In my experience, those who go on to successful finance leadership careers, and then make the transition to CEO, become adept at putting people and relationships first. They understand that the numbers matter, but the business will succeed or fail on the strength of its people. They are often in a position where they need to bring teams on a business transformation journey, so CFOs who can unify people in pursuit of a vision or goal will be well on their way to success.
Think about the whole business
As the saying goes: Operate for the job you want not the one you’ve got. Once you have mastered the CFO role, take every opportunity to learn other aspects of the business from sales and marketing to operations, people and culture. Sit on multidisciplinary project teams, steering committees and change initiatives. Take on secondments or spend time in international markets, with business partners or in different parts of the organisation. Taking a helicopter view and having a broad knowledge of operations will serve you well in the quest for a CEO role, and, crucially, will mean you start thinking like a CEO.
Develop your leadership style
Effective leadership skills are critical whether you’re leading the finance team or the whole business. Think about the type of business or industry where you want to be CEO and what will matter most to success. Will it be more important to inspire and engage teams, manage change or execute complex strategies in changing markets? How do these demands align with your personal strengths and what authentic leadership style can you bring to the table?
Know your X factor
Whether they know it or not, every successful senior finance leader has an X factor that others talk about and covet. Those who successfully transition from CFO to CEO generally do so because of this equation: Ambitious + Great CFO + X factor. Are you a great negotiator, can you inspire and motivate teams, do you have a knack for investment strategy? Maybe you have succeeded in difficult business transformations or have the personal touch with strategic clients and partners? If you don’t know your X factor, ask around and you’ll soon find out.
If you don’t already have one - get a great mentor!
Having someone to whom you can turn in times of need will be invaluable, and a strong mentor will help you think about issues differently. This can reduce the influence of a ‘groupthink’ mentality when a problem is only considered from within a business, and bringing fresh thinking to the leadership table will only increase your value proposition and influence.
If you’d like to have a confidential chat about your next career move, please get in touch.