If CFOs want to make a career, they should get along well with the CEO

Business failure is no longer the reason to kill a career: In a global survey of 321 chief financial officers (CFOs) by the human resources and organizational consulting firm Korn Ferry, only eight percent said that failing to meet business goals was the most important reason for dismissal. In contrast, 41 percent of respondents said that a falling out with the CEO led to their resignation. And more than half consider such a rift to be the most important reason why the CFO himself throws in the towel.

No. 1 reason for CFOs to resign: falling out with the CEO

"The numbers back up what we've been seeing for years," says Marcus Schneider, senior client partner and CFO staffing specialist at Korn Ferry. "People are hired for their technical skills. And dismissed again due to a lack of personal fit with the corporate culture."

Chief Financial Officers are in most cases the number two in companies and work very closely with their CEO. Accordingly, there is a high degree of mutual dependence. "When hiring a CFO, boards of directors and CEOs should pay particular attention to: Does this candidate fit with me and the corporate culture with his character traits, individual motivational drivers and on a human level? And not just on the basis of professional experience and expertise," says Marcus Schneider. "This realization has led to a significant change in personnel searches in the CFO environment. Away from: Where are there suitable candidates in the first place? Towards: Who are these candidates really? And most importantly, do the candidate fit with the CEO and management team? While a candidate can develop his or her full potential in one environment and culture, it does not succeed in the other. Identifying this 'fit' is one of the most important tasks of an HR consultant today." Hence the Anglo-Saxon credo: "Hire for attitude and train for skills."

A quarter of the CFOs surveyed want to become CEOs

While a large proportion of respondents (one-third) would like to continue their role in a larger organization in each case, one in four CFOs (23 percent) would also dare to take on the role of CEO. "In recent years, we have seen a number of CFO promotions directly to the top of the company," says Marcus Schneider.

"Many of them have now been serving their companies as CEOs for years and have contributed significantly to increasing results. Their financial know-how also helps them a great deal. However, such a step is almost impossible if the respective aspirants have not already arrived in the company culture in their role beforehand and have developed a strong positioning internally. Conversely, this means that a CFO who is tolerated rather than desired because of his or her expertise will presumably not be able to take this step in his or her current organization." This is matched by the fact that only one-third of those surveyed believe they would be considered as a successor to the CEO in their own company.

CFOs consider operational experience important - too few actually do them

Beyond the personal fit, professional experience naturally continues to play an important role: on the way to the CFO role as well as when moving up another level. According to the respondents, the most important building block of experience for becoming a CFO is general management (27 percent), followed directly by strategy/M&A (26 percent). A high affinity for IT is becoming increasingly important, say nine out of ten CFOs. "Digitalization has long since arrived in the finance sector," says Marcus Schneider. "Corporate finance, controlling and classic CFO areas have been increasingly broken down into individual processes in recent years and are thus ideal for targeted automation. In many cases, this has already happened or is in development. Of course, a CFO doesn't need the same knowledge as a programmer or technician, but he must understand the basics in order to continue to align his departments with the future."

Career to CEO: Taking the plunge

When asked about reasons preventing a career as CEO, 24 percent of respondents said they lacked sales/commercial experience, 21 percent lacked a deeper understanding of the industry, and one-fifth lacked sufficient experience in operations. Marcus Schneider says: "Even though people believe that general management is an important building block for becoming a CFO, the reality is often different. CFOs often start their careers in finance - and end up presiding over it. But that is not enough to manage a company in its entirety. That's why I recommend that especially young talents who are still a few steps away from a CFO role deliberately enter the cold water to take on operational responsibility: as sales or production managers, managing directors of national subsidiaries, or by playing an active role in corporate transformation. The sooner they start, the more experience they can build up away from the finance function. And the better equipped they will be once the CEO question comes up."

Source: www.kornferry.com