However, that does not mean that the COO, for instance, is much more suited for this kind of activities.
Analytical skills and community involvement are also qualities that determine the success of a CEO. Executive officers need strong analytical skills in today's fast changing marketplace. The needs of many groups have to be addressed everyday, while the interests of the organization must also be fostered. A CEO, cannot appear distant, single-minded or out of touch. The need to interface with all parties and to creatively analyze all information becomes more and more important. From this point-of-view, due to their analytical nature, CFO are well prepared for the job. As far as community involvement is concerned, my opinion is that it is the nature of the individual that decides the degree a company and its top representative are involved in social events of all types. I think that a CFO is no more or no less inclined to community involvement than a COO, for instance.
Since the number of CFOs promoted to the position of CEO has increased lately, there are some strategies that people have taken in order to have a broader experience, which might bring them closer to the top job. Lateral shifts that pay less or offer less in status but provide for chances to gain such experience are an option. Other CFOs have oriented themselves toward smaller organizations for advancement opportunities.
As far as education is concerned, it usually involves earning a master's degree in business administration, since one of the basic requirements for a CEO is the exposure to issues of economics, and operations as well as finance and law. Mentors are also very useful, since they can help CFOs understand office politics and can act as a sounding board for their ideas. CEOs, acting as mentors, may also create opportunities for CFOs to enhance their impact within the organization (also mentioned by Brewis, 1999). Such a mentor should be honest, straightforward, sensitive to the strengths and weaknesses of CFOs, constructively critical, well informed about the requirements and demands of the CEO position, as well as trustworthy.
Authors have expressed various ideas about how a CFO should be in order to become a CEO. Some argued that the ideal CEO communicates well, is adept at managing managers, understands the company's product and operations, and provides a consistent vision (Picker, 1989). Others said that a CFO must not only understand the financial results but also what drives them. Neal Kissel, partner at management consultants Marakon Associates, cited in an article published in Corporate Finance, April 2005, says that the insight into the sources and drivers of intrinsic value across the organization is a capability that not all CFOs have. In addition to the mastery of finance, Mr. Kissel would advise CFO to try being strategists, because he argues that one of the main reasons CFOs don't get the CEO's job is because of a gap in strategic thinking, an information specialist (the ability to organize financial and strategic information in a way that provides guidance to an organization is also important), a communications expert, because the CFO should see his role as not just reporting the numbers but as being an integral part in communicating what the company's strategy is, and a corporate leader, guiding others towards accomplishing the company's goal and direction. Mr. Kissel believes that great CEOs are developed and not born, so he sees no reason why a CFO doesn't have the inherent capabilities to expand his horizon and to become the CEO.
As a conclusion, CFOs who want to become CEOs find that there is enough space on the market for them and their talents. Broad abilities need to be shown in order to survive in such an environment. After all, a CFO is well placed in the competition for the CEO position, since he or she possesses specialized accounting and finance knowledge and capabilities. If someone wants a broader perspective, the financial background can only help.
1. Brewis, Janine, "How a CFO can graduate to CEO," Corporate Finance; London; Jun 1999; Iss. 175; pg. 13
2. Picker, Ida, "Do CFOs Really Make Good CEOs," Institutional Investor; New York; Aug 1989;
3. Sandrick, Karen, "From CFO To CEO: What Does It Take To Make The Leap?," Healthcare Financial Management, 07350732, Dec95 Supplement, Vol. 49, Issue 12