The position of Chief Financial Officer (“CFO”) is typically the “top of the pyramid” in the career path for those seeking advancement within a finance career. The following information is provided to assist anyone seeking to pursue such a position.
1. What Does a CFO Do?
As the Your Future Blog notes, the CFO has complete oversight of an organization’s financial operations and has a significant amount of responsibility for the overall business strategy and performance. ‘The CFO role comes with wide-ranging responsibility and accountability, as well as a high level of job satisfaction,’ says Paul McDonald, Robert Half senior executive director. ‘Today's financial executives influence all areas of their organization, from operations to information technology to human resources.’
In addition, the blog observes that the CFO is responsible for ensuring and developing revenue streams and driving business strategy. They do this by determining risk controls and developing innovative funding and capital-raising strategies to drive expansion, modernization or product development. They need to be technologically competent and able to integrate technology strategy into the business. A CFO works closely with the CEO to influence and drive business strategy and will often be a board member responsible for corporate investment.
2. How can candidates best prepare themselves for the CFO role?
As CPAs consider their career paths, many aspire to become a CFO in industry. A limited number of these positions are available, and the competition is intense.
This analysis from Journal of Accountancy notes the following traits needed for a CFO role:
Skills and Knowledge
CPAs with designs on a CFO position need to distinguish themselves with skills that go far beyond the basic foundation of accounting competencies. The significance of these skills varies based on the company’s size and industry, but all of them should be considered in a self-assessment to prepare for a career move.
Business and Operational Experience
Some CPAs have strong accounting and finance backgrounds but no operational experience. To get it, aspiring CPAs can volunteer for projects outside of finance, take lateral positions in different areas, and seek out and visit others who work in operational areas such as manufacturing and sales. CPAs can broaden their perspectives by asking questions, even if it is uncomfortable; reading contracts from a business perspective; and attending and participating in meetings.
People Skills and Negotiation
Effectiveness in leadership roles requires being open with other employees. A positive attitude and enthusiasm are essential. Having an executive presence is critical, as you will be dealing with customers and shareholders, bankers and lawyers, partners, and boards of directors. But while it’s important to be able to speak the language of the boardroom, you must also be able to alter your behavior and learn different ways to communicate with all levels of an organization, and to build relationships with people with different levels of education and experience.
Leadership Skills: Creativity and Courage
To be a CFO, you must be tough and confident. You must be able to make difficult, reasoned decisions and explain complex accounting, financial, and business concepts to others in a way that they can understand. You must be a good storyteller to communicate the story behind the numbers to management or third parties. CFOs need to go beyond the numbers to be strategic partners to CEOs.
Strong Personal Values
While pursuing higher positions on the career ladder, it’s important to be true to yourself and not deviate from your values, CPAs say. Getting the job you want can leave you feeling empty if you sacrifice your beliefs to get there.
Networking and Mentoring
While having a large number of connections can be valuable, successful networking is more than just collecting contacts. It is important to assess your current network and to build quality contacts in targeted areas that can help you attain the role of CFO.
As you consider your strengths and areas for improvement against these recommendations, it is important to do a thorough self-analysis of your abilities and talents. Talk to friends, families, peers, and subordinates to get others’ perspectives. Assess what you are passionate about and what defines success for you (beyond compensation). No matter what steps you take in your career search, there is always an element of luck involved. Be open to opportunities presented at all times and always have your “antenna up.”
3. Robert Half Finance and Accounting provides the following additional tips for navigating the CFO career path:
- Gain broad financial experience
- Widen your customer service experience
- Broaden your understanding of technology
- Earn a CPA or MBA
- Consider controller and treasury positions
- Prepare to take on expanded roles
Although nothing guarantees success in a world of variables that you can’t always control, if you keep the principles above in mind and put them into practice, it will at least increase your odds.