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Primer for CFOs: How to Climb the Corporate Ladder

When Mina Brown was helming the finances at a company that would be spun out of Ryder System a couple of decades ago, she let her superior know she was up for a challenge. She wanted to take on a more operational position and experience running a business. What she eventually got was more of a mix – a dual CFO/general manager role of Aviall. She loved the mix of responsibilities for a three-year period.

After a restructuring and a new iteration of the company took hold, the board wanted her to stay on solely as the CFO. She passed, feeling like she had been there, done that. It would no longer be a challenging position. Now fully content as an executive coach and president of Positive Coach LLC, Brown looks back at what she calls a “personal failure” on her part. Meeting with the chairman of the company’s board after she resigned, she told him, “I’m disappointed I was never considered for the president job of the distribution business,” she tells Proformative. “And he looked at me like I had grown a third head. He said, “Mina, I had no idea you would have been interested in that.”

And therein sits a hard truth that plagues many senior executives who have not made the time or effort to raise their hand and say what they want for their career. Or they don’t give it much thought at all. “I did not take personal responsibility to say, “I want to be in the leadership role of the business when the opportunity comes about,” Brown says. “You have to set the groundwork and laying the seeds of letting the decision-makers know where your interests and goals lie.”

To climb the corporate ladder – whatever you envision as the next step – you need a plan, although it may need to be flexible. As Proformative members imply in their comments made to a recent article about what recruiters want to hear from CFO candidates, you may not always have total control over your professional destiny. “It is all but impossible to ‘plan’ a career in today’s environment for the simple fact that there is no way to know if your employer will be around tomorrow, let alone next year,” an anonymous director of operations and finance wrote.

While CFOs can attest to the fact that no job these days is as solid as the years when pension and long tenures were taken for granted (Fortune 500 finance chiefs are keeping their jobs for an average of 5.9 years, according to executive search firm Spencer Stuart), sitting idly by won’t help anyone move forward on a professional level. In fact, recruiters told us that they are specifically looking for senior finance executives who have actively managed their careers, which involves regularly expanding their skills and broadening their experiences.

“I believe it is mandatory that every professional manage their careers and have a plan in their area, including those at the senior executive level,” Brown says. “That doesn’t mean just because you have a plan that everything will go according to plan, but it is kind of idiotic not to have one.” Think about your ultimate goal (a Fortune 500 CFO? A CFO in a different industry? Or a part-time CFO gig where you can have more control over your hours?) and work your way backward to figure out how you can get to that point.

Here are some steps to get you at least in the right direction:

Plan for the long term: Interviewers love to ask, “Where do you see yourself in five years?” but you need to go much further than that in your mind, Brown recommends. She asks her clients to think as far out as a decade. Plot out your career path with the same approach you apply to multi-year strategic plans for your company, Brown suggests.

Become the CEO of your career: It’s been nearly two decades since a Fast Company article declared we’re living in a “free agent nation ,”when employees started jumping ship to start their own businesses in noticeable numbers and dotcoms began to proliferate, ending the era of the paternalistic enterprise. “So many companies were hiring then you could cherry-pick your job and negotiate your best deal,” Brown notes. Subsequent downsizing put an end to the an era but laid the groundwork for employees to realize the fate of his or her career lies in their own hands, not that of their employer.

Know what type of CFO you are: You either view the CFO position as the ultimate destination; once you have gotten to that point on the corporate ladder, you plan to keep the title, perhaps at more than one company, until it’s time to retire. If that’s the case, you’re like most finance chiefs. In a study of 347 large-company CFOs’ careers between 2002 and 2012, Ernst & Young found 62 percent kept that title while the rest moved on to CEO (15 percent), COO (3 percent) or another executive-level title.

If you are one of those who view the CFO job as a stepping-stone to yet another rung, you have to do some extra work by letting other senior leaders and the board know your intentions. “You can position yourself as a candidate for a non-CFO role when something like that opens up,” Brown says. “Those jobs are few and far between; they are not going to fall off the tree. If you don’t let people know you’re interested in moving into technology, operations or marketing or leadership, like the CEO role, they will assume you’ll be happy with being CFO the rest of your life.”

Always challenge yourself: If you’re on a CFO-only track, keep your skills current and expand what you can do, such as taking on broader risk-management responsibilities and getting more involved in procurement. “You’ve got to keep yourself from being stagnant,” says Brown. This is not only good practice for staying interested in the job at hand; the effort will also make you more attractive to recruiters and could make you more eligible for the CFO role at a bigger or more complex company.

Always tend to your career: Even if you are comfortable in your job and hope to stay there a long time, you still need to keep your eye on what other opportunities are available. “You may feel you are in the best catbird seat in the world, but there are no guarantees,” Brown says. “You could be out of a job in a month and you’ll sit there, saying ‘Holy smokes, what just happened?’”

Be loyal but keep looking: Since the recession, notes a comprehensive Harvard Business Review study of 1,000 top-level executives, corporations with long backgrounds but shaky existences have been pulling their execs from the outside while storied companies that are more stable – like Caterpillar and Procter & Gamble – still promote from within. “Despite the prevalence of sophisticated executive development and succession planning programs, less than a third of the 2011 Fortune 100 leaders had started their careers with their current employers,” the researchers noted.

Know your strengths: Mike Zeiser, CFO of MacAulay-Brown Inc., a security company based in Dayton, Ohio, began his finance career like many CFOs in public accounting, zeroed in on what he liked to do and what he was good at doing. A lifetime fan of archaeology, which he studied in college in addition to earning his accounting degree, he has marveled at how the practice can “tell a story about an ancient civilization just by extrapolating information from a few artifacts,” he says.

Later, as an accountant, “I realized how to tell a complete story of a business by using the same process, just with business artifacts,” Zeiser adds. “For example, with a manufacturing client, I could only become a true financial expert in that business if I walked the shop floor, asked the machinists how a particular piece of equipment worked, and opened dusty crates.”

Moreover, he took the time to talk with his clients’ HR department, listen to pitches from the sales team, and go over the business with the owner. “When coupled with the financial information, I found that I often had a complete understanding of the business and could communicate it without relying solely on numbers,” he says. Skills and enthusiasm carried him upward, from his accounting firm role to finance executive positions, president of a MacAulay-Brown subsidiary, and then to his current CFO role.

Move down to move up: Some executives have had to actually move down the corporate ladder to get to their ultimate spot. Bryceon Sumner, CFO of Callison, a global architecture and design firm, relays the story of a former co-worker who moved from the CFO of a small privately held company to become controller of a Fortune 500 company. Eventually he secured the CFO role there, which met his goal of heading the finances of a large company. Sumner cautions, however, “it is vitally important to consider such a move carefully. A CFO title at a small company may not be equivalent to the controller title at a larger firm.” When recruiting CFOs from the outside, larger companies are particularly keen on hiring those who are already familiar with the title: 56 percent of the current Fortune 500 and S&P 500 CFOs who were not hired from within had held that title at their most recent previous employer, according to a 2013 Crist|Kolder report on C-suite executives.

Choose your path carefully: The same Crist|Kolder study highlighted the tough battle that CFOs who want the top spot have in front of them, at least at the largest of companies. COOs hired from within are more likely than any other title to become the chief executive (52 percent of internally hired CEOs in the Fortune 500 and S&P 500 companies held that title as their most immediate previous role), while those who had held CEO titles at other companies also had an edge. Only 6.5 percent of those CEOs who were hired from within came directly from the CFO ranks, and just 4.2 percent came directly from an external CFO position.

Make connections: Successful executives are able to influence others, navigate the interpersonal dynamics of their teams, and communicate with decision-makers, Brown notes. And they also know how to network. CFOs justifiably consumed with their work may let this aspect of professional development slide; however, Brown says that would be a mistake. At the very least, she recommends, you should have a complete LinkedIn profile and regularly maintain to it, by making connections with past and current colleagues as well as acquaintances.

After all, you never know who may help lift you up another rung along the corporate ladder.

 

 

Sarah Johnson is a business editor based outside Boston.

Comments

Ikram Mansoor Khokhar, ACCA,..
Title: Financial Planning and Analysis
Company: Nesma Trading Co. Ltd.
LinkedIn Profile
(Financial Planning and Analysis, Nesma Trading Co. Ltd.) |

Interesting information and advice!

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