Academic journal article Journal of Accountancy

What Does It Take to Become a CFO?

Academic journal article Journal of Accountancy

What Does It Take to Become a CFO?

Article excerpt

EXECUTIVE SUMMARY

* TO INCREASE THE LIKELIHOOD OF BECOMING A CFO, you need a broad range of skills beyond knowing the ABCs of accounting. You must be a business strategist, think like someone on the board of directors and be familiar with technology. Don't ignore the operations side of the business either.

* CPAs ARE PARTICULARLY WELL-SUITED to becoming CFOs and working as the CEO's right hand. Because of their discipline and organization and their ability to present financial information appropriately and with integrity, accounting professionals make excellent CFO candidates.

* CFOs NEED CORPORATE EXPERIENCE in either the controller or treasury functions. It's okay to move around companies to gain experience. It's critical to keep up with continuing professional education, especially in today's regulatory environment.

* POSITIONING YOURSELF AS A TEAM- AND CONSENSUS-builder will encourage people to trust your judgment. The CFO applicant must know how to deal with all the business departments, must understand risks and provide options for mitigating them.

* DON'T ASSUME THE CEO KNOWS you want to be CFO. Make yourself known. The CEO wants someone of impeccable integrity and loyalty. Network, develop contacts on the board and with your auditors.

Finance officers and recruiters offer some advice on how to increase your chances of landing the job.

Want to be a chief financial officer? Business experts and CFOs themselves say your first priority is to become a business strategist. You have to move from an accounting focus to see the borders of the big picture--and beyond. You have to understand all aspects of your business, from the sales goals to the marketing plan to your company's position in the marketplace through to the strategic plan. You have to be familiar with distribution channels, public relations and all other functional silos. You have to understand the latest technology and be able to share your IT savvy with your colleagues. In other words, "You can't rely on just knowing the ABCs of accounting," explains Diane Albergo, manager of member career services at the Financial Executives Institute (FEI), a membership organization for CFOs and senior financial executives in Morristown, New Jersey. "You need a strong business sense."

But since CFOs are made, not born, how can you increase your likelihood of becoming one--and thus being the right hand of the CEO? In addition to having excellent "soft" or "people" skills, you need extensive technical knowledge. In today's business environment, however, the experts say there's so much overlap between hard and soft skills it's sometimes difficult to distinguish between them.

Perhaps that's why Laurence Stybel, of Boston-based Stybel Peabody & Associates, Inc., an executive search firm, recommends that you begin your quest for CFO-hood by changing your own thought processes. "Start thinking like a member of the board of directors," he advises. "You've proved you can think like an accountant. Most CEOs are obsessed by what their boards are thinking. Come across as someone who knows what the board wants and the CEO will think of you as a confidant."

TAKE YOURSELF TO THE TOP

If you're actively seeking a CFO position, Stybel offers some techniques that can help. "Go to Web sites such as monster.com, careerpath.com and fei.org" he suggests. "Look at the ads for CFOs and check the cliches du jour. The marketplace is telling you this minute what it wants. `Multitasking' is very in these days, but `being a business partner' is so 1997."

His other pointers:

* "Sometimes, to position yourself for the next level, you may have to do things that are counter-intuitive. Look for what the market wants rather than what you want."

* "Understand your best source of opportunity will come from outside your company. Employees at some large companies can be recognized internally. …

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