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Howard Adamsky
Howard Adamsky

Going from CFO to CEO

Here are four topics to consider before you think about moving up to the chief executive job.

January 23, 2014
By Howard Adamsky

Many career transitions are simple and clear. Java developer to senior software architect, director of finance to corporate controller, divisional post to corporate role, leading to additional opportunities and wider responsibilities. Most of us understand how to progress in our respective fields. If we are good enough and, at times, lucky enough, we will reach the “C” level: CFO, chief technology officer, chief marketing officer. These titles are great examples of a career well planned and a job well done. On the other hand, it does prompt one simple question.

Now what?

Can one sit in that CFO role forever? Yes. Can one go to a larger organization and become a CFO there? Yes again. Can one consult and seek work/life balance? Yes. But what is to happen to the elite CFO, that singular and exceptional individual who wants to contribute more and enter new worlds of influence and opportunity? What is to become of the rare CFO who can see beyond the financials and hopes to move from CFO to CEO?

The first step in this transition is not only to excel as a CFO but also to operate in a consistently ethical manner. This person needs to act as the moral compass for the organization. Richard Fusco, CFO of Nouria Energy Corp., says: “It is critical that the CFO not just be a numbers person, looking at past performance and cash management issues. This is simply not enough. It is imperative for the CFO to keep ahead of what is happening in their industry. Today’s CFO needs to understand how change will affect the organization financially. If they are to be seen as CFOs who are a cut above, they need to stay on top of larger issues such as the Affordable Health Care Act.” Quoting Fusco further, “It is critical to understand the business on all levels. You need to be aware of the nuances and the drivers that will come into play; then you can demonstrate both vision and the sense of awareness required to be thought of as CEO material.”

Jay Cole made the move from CFO to CEO at MicroChem, a Massachusetts-based specialty chemical developer and manufacturer. Cole and I have a history together. I recruited him to MicroChem under its original founder and CEO. Cole joined the company as CFO in 1997, later adding COO to his duties in 2000. He became president and CEO in 2008.

In a recent conversation, I asked a simple question: How does one go from CFO to CEO within the same organization? More than that, how does one succeed in taking a company to the next level and beyond? Cole told me that the answer to that question is complex and nuanced. In his view, there are four things required to make this leap:

  1. Focus and determination. You have to want be the person in the corner office. You have to learn the craft of being a great finance executive while maintaining an interest and awareness broad enough to see the organization cross-functionally. It is imperative to have working knowledge of all aspects of the business. It is equally important to take advantage of every opportunity to learn. You need to be willing to work through adversity, as opposed to taking on “plum” projects only. Do this and you will build character, solid working relationships, and credibility.
  2. Find the right mentors. Surround yourself with leaders who have dramatically different (good and bad) leadership styles and approaches. Their philosophies will teach you who you want to be and how you want to manage. Be sure to look for mentors in and out of finance. Spending time gaining advice and counsel from across the organization will help you to develop critical understanding and insight.
  3. Practice humility and fairness. Accept that you do not know everything and fill the gaps in your background with a strong team. Listen to their guidance and adapt your position based on their input. Leading is about flexibility and developing creative solutions; having an open mind to others’ suggestions is crucial. It rounds out your capabilities, builds credibility and confidence in your overall team, and humanizes the very real difficulties that are essential to leadership.
  4. Create opportunity through enhanced perception. Cole’s initial perception of MicroChem was that it was a company that produced specialty chemicals and little more. This perception kept the company locked down in a very tight niche market. He was able to see the organization’s possibilities, to partner with customers and engineer new and creative solutions—leading to endless opportunities that would never have otherwise happened. With this type of thinking, Cole has helped grow the company revenue 28-fold since he joined. Can you see new possibilities for your organization?

Cole’s story is remarkable, but I believe it is realistic for many CFOs—if they develop the ability to look at the world differently and prepare for a future that will allow them to provide greater value. Let’s look at some other ways to succeed:

  • Improve your public speaking. Find an organization such as Toastmasters and join. The yearly fee is negligible. Toastmasters will teach you how to speak publicly, lead groups, and be a pro at the things most people fear. Author and entrepreneur Harvey Mackay calls Toastmasters the “most undervalued resource in America,” and he knows a few things about leadership.
  • Influence the organization. As a CFO, your role extends beyond your day job. You need to influence the organization in ways that will add value across all facets of the business. Your mission is to bring a level of philosophy and thought to the organization that will upgrade thinking, improve standards, and drive the right strategic initiatives. You need to demonstrate a desire to make a real and long-term difference. Doing your job is one thing; influencing the organization to do what is right and becoming the innovator and architect of the future demonstrate real leadership.
  • Form relationships. One key part of one’s career is who you know—but even more, who knows you. Being capable allows you to keep your job, but your relationships often deliver the intelligence to make the connections necessary to interview for that job in the first place. Assume that you do not have relationships with enough people. Take the time to get to know people, not just from a business perspective but from a personal one as well. Keep in touch with a quick email. Offer to help out if there are storms in their lives. Be nice and avoid being just a taker. This investment of time will pay off down the road in ways that will astound you.

The physics of upward mobility in the workplace need to be understood by those who wish to take advantage of its rewards and opportunity. Can all CFOs become CEOs? Probably not, but the question to be asked is more personal. Can you?

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Howard Adamsky has worked extensively as a corporate recruiter, most recently at Tatum, which is a Randstad company. He has written and spoken about talent issues and employee engagement.