Help me become a CFO
September 21, 2012 4:43 AM Subscribe
My long-term goal is to become the CFO of a company. Would this job be a useful step in that direction, or a detour?
Currently I work in the finance department of a tech company. Because I like to pick up new skillsets, I have done both purchasing and collections.
My long-term goal is to become the CFO of a company. The way I picture this happening (which may or may not be realistic - please comment on that if you think that my proposed plan is unrealistic) is to acquire knowledge about every different aspect of corporate finance, then market myself to startups as the finance generalist who can fill almost any finance-related need (thus allowing the startup to remain lean), and gradually build a team around me as the company grows.
Recently our staff accountant left the company, and I am considering whether to take his place and thus acquire his skillset. Would this be a good idea, or a bad one? It would be a lateral move. I am probably going to leave this company within a year or two in any case.
Also, assuming that I would have some flexibility to choose my own title (thus making this seem slightly more glamorous), what should it be? I would be reporting directly to the accounting controller.
Currently I work in the finance department of a tech company. Because I like to pick up new skillsets, I have done both purchasing and collections.
My long-term goal is to become the CFO of a company. The way I picture this happening (which may or may not be realistic - please comment on that if you think that my proposed plan is unrealistic) is to acquire knowledge about every different aspect of corporate finance, then market myself to startups as the finance generalist who can fill almost any finance-related need (thus allowing the startup to remain lean), and gradually build a team around me as the company grows.
Recently our staff accountant left the company, and I am considering whether to take his place and thus acquire his skillset. Would this be a good idea, or a bad one? It would be a lateral move. I am probably going to leave this company within a year or two in any case.
Also, assuming that I would have some flexibility to choose my own title (thus making this seem slightly more glamorous), what should it be? I would be reporting directly to the accounting controller.
I can't speak for the US, but in the large, US-based IT multinational I work for, an MBA is absolutely not a requirement for the in-country CFO jobs (as opposed to global. That would be... a lofty aim to say the least). Indeed, I don't know of any of our CFOs how have one (I'm sure there's a couple, we're arguably the biggest IT company in the world).
Obviously, because of the size of our company, CFO is not a role anyone would be looking at before about 45, give or take. In our case, variety is indeed important, but so is seniority - we promote from within, and would never higher externally for that kind of a role. You don't mention whereabouts in your career you are at the moment. If you're near the start, lateral moves can be an excellent idea to build up a skillbase; this is especially true in a larger company.
If you are, say +8-10 years into your career, I would suggest starting to lock it in. Do you know any CFOs or senior finance people ask them? If you don't, join a professional group stat and start networking. They'll give you better advice than 99% of the people here I guarantee it.
posted by smoke at 5:22 AM on September 21, 2012 [3 favorites]
Obviously, because of the size of our company, CFO is not a role anyone would be looking at before about 45, give or take. In our case, variety is indeed important, but so is seniority - we promote from within, and would never higher externally for that kind of a role. You don't mention whereabouts in your career you are at the moment. If you're near the start, lateral moves can be an excellent idea to build up a skillbase; this is especially true in a larger company.
If you are, say +8-10 years into your career, I would suggest starting to lock it in. Do you know any CFOs or senior finance people ask them? If you don't, join a professional group stat and start networking. They'll give you better advice than 99% of the people here I guarantee it.
posted by smoke at 5:22 AM on September 21, 2012 [3 favorites]
Best answer: Experience is good, and having a working knowledge of the day to day of the accounting department would be a good thing. So in that respect, yes, taking that job would be good.
But I would suggest that a degree in finance is a necessity, and probably an MBA and/or a masters in economics. Without those, you may well be able to luck into a CFO job eventually, but with them you would have a lot more ammunition to get better jobs, sooner in your career. A competent CFO needs the generic management skills to manage the department, the finance skills to help the company get the most out of their cash, AND the economics skills to be able to measure and predict trends in both the company's performance and the marketplace they are in.
The CFO at my company probably saved it during this last recession by doing the latter- he saw the signs early enough that he was able to suggest/force them to belt-tighten early enough that they wouldn't need to depend on debt in order to make payrolls. Because that's how a lot of companies got screwed up- they depended on debt to finance day to day operations, and when credit dried up they were screwed.
posted by gjc at 6:14 AM on September 21, 2012 [2 favorites]
But I would suggest that a degree in finance is a necessity, and probably an MBA and/or a masters in economics. Without those, you may well be able to luck into a CFO job eventually, but with them you would have a lot more ammunition to get better jobs, sooner in your career. A competent CFO needs the generic management skills to manage the department, the finance skills to help the company get the most out of their cash, AND the economics skills to be able to measure and predict trends in both the company's performance and the marketplace they are in.
The CFO at my company probably saved it during this last recession by doing the latter- he saw the signs early enough that he was able to suggest/force them to belt-tighten early enough that they wouldn't need to depend on debt in order to make payrolls. Because that's how a lot of companies got screwed up- they depended on debt to finance day to day operations, and when credit dried up they were screwed.
posted by gjc at 6:14 AM on September 21, 2012 [2 favorites]
Response by poster: In answer to your question, Smoke, I switched careers mid-stream. So I have approximately 4 years in IT (programming, IT support, etc) and 7 years in corporate finance.
posted by wolfdreams01 at 6:14 AM on September 21, 2012
posted by wolfdreams01 at 6:14 AM on September 21, 2012
Your years in IT will serve you well. Finance and IT are so totally linked. Accounting isn't finance. It's just spreadsheet work.
Instead of an MBA, there are Master's in Finance, or just take a few classes.
Also, look up the biographies of CFOs at large companies. That will give you an idea of the typcial trajectory.
posted by Ruthless Bunny at 7:29 AM on September 21, 2012
Instead of an MBA, there are Master's in Finance, or just take a few classes.
Also, look up the biographies of CFOs at large companies. That will give you an idea of the typcial trajectory.
posted by Ruthless Bunny at 7:29 AM on September 21, 2012
What size firm are you thinking about here.
Most, if not all, large company CFOs have an MBA, usually from a very highly ranked business school, and significant industry experience. It's a senior-level management job, often reporting directly to the CEO, and, in rare cases, the Board of Directors.
posted by dfriedman at 7:33 AM on September 21, 2012
Most, if not all, large company CFOs have an MBA, usually from a very highly ranked business school, and significant industry experience. It's a senior-level management job, often reporting directly to the CEO, and, in rare cases, the Board of Directors.
posted by dfriedman at 7:33 AM on September 21, 2012
I agree with Admiral Haddock. Given your work experience and willingness to become the staff accountant, it sounds like you are on the accounting track, not the CFO track. Also, I am not your controller, but if I were I'd be skeptical of your desire to change the title of the role from staff accountant to something else. The title of staff accountant means something to people outside of your organization. It's not as general-sounding as it seems, even though staff accountants do a wide variety of tasks.
Which isn't to say that accounting and finance aren't interlinked. Most CFOs in the United States are also CPAs. That said, I don't think they traveled through every possible accounting or finance role at a company to get there. And as noted above, CFOs often have an MBA, too.
Also, tech startups are not looking for someone who can fill any finance/accounting role to be their CFO. They are looking for the person who can bring them the money! Someone who can navigate the angel investor and venture capitalist waters, and who can get loans out of a bank. For tech startups, the goal is to go public. Do you know anything about taking a company public? That's your job as CFO of a startup.
You sound like an excellent candidate for a series of informational interviews. Seriously - don't ask us on Metafilter, go forth and set up coffee dates with CFOs, starting with the CFO of your current company. Ask them about themselves, how they got there, what they do, what they would do in your shoes. You need more tailored advice than we can give you here.
posted by stowaway at 7:47 AM on September 21, 2012
Which isn't to say that accounting and finance aren't interlinked. Most CFOs in the United States are also CPAs. That said, I don't think they traveled through every possible accounting or finance role at a company to get there. And as noted above, CFOs often have an MBA, too.
Also, tech startups are not looking for someone who can fill any finance/accounting role to be their CFO. They are looking for the person who can bring them the money! Someone who can navigate the angel investor and venture capitalist waters, and who can get loans out of a bank. For tech startups, the goal is to go public. Do you know anything about taking a company public? That's your job as CFO of a startup.
You sound like an excellent candidate for a series of informational interviews. Seriously - don't ask us on Metafilter, go forth and set up coffee dates with CFOs, starting with the CFO of your current company. Ask them about themselves, how they got there, what they do, what they would do in your shoes. You need more tailored advice than we can give you here.
posted by stowaway at 7:47 AM on September 21, 2012
Best answer: I have a lot of experience with public company CFOs
There are two different kinds of CFO's in the world.
Type 1) is a C-suite guy whose focus on the strategic side of funding the business. M&A, Capital Allocation, etc, etc. He usually functions as a consiglieri to the CEO and is probably comfortable talking with the board and investors directly. Usually has some operating experience, usually has a (probably top-5) MBA. Might have been a banker or a consultant at some point. Business Development guy. The best guys probably ran a business at one point. Sometimes this sort of CFO role is a path to being CEO if everything goes according to plan. Usually this sort of CFO has a really strong Chief Accountant who handles the nuts and bolts, maybe even a treasurer who is strong enough to handle day-to-day conversations with the banks. Probably dont' do the IR role a whole bunch either.
Type 2) Is a Chief Accountant. Probably not super comfortable in front of the board, probably not super focused on business strategy. Probably handles all of the nuts and bolts stuff himself, or at least is more in the weeds on it that type 1 is. A lot of these guys are ex-Big 4 audit guys, if they aren't guys who climbed the internal ladder of the corporate finance departments. These guys are not on a path to be CEO, and aren't really operators. Usually also handle IR. These are Smoke's in country CFOs made good basically.
BTW- I find type 1 to be almost non-existant outside of the Anglo-Saxon world, and it is much more common in the US than in the UK.
So to answer your question - sure you could be on the path to be a Type 2 guy, but probably not Type 1.
(and of course my Type 1 & 2 are over generalizations)
And yeah, network and informational interview like crazy.
posted by JPD at 8:36 AM on September 21, 2012 [3 favorites]
There are two different kinds of CFO's in the world.
Type 1) is a C-suite guy whose focus on the strategic side of funding the business. M&A, Capital Allocation, etc, etc. He usually functions as a consiglieri to the CEO and is probably comfortable talking with the board and investors directly. Usually has some operating experience, usually has a (probably top-5) MBA. Might have been a banker or a consultant at some point. Business Development guy. The best guys probably ran a business at one point. Sometimes this sort of CFO role is a path to being CEO if everything goes according to plan. Usually this sort of CFO has a really strong Chief Accountant who handles the nuts and bolts, maybe even a treasurer who is strong enough to handle day-to-day conversations with the banks. Probably dont' do the IR role a whole bunch either.
Type 2) Is a Chief Accountant. Probably not super comfortable in front of the board, probably not super focused on business strategy. Probably handles all of the nuts and bolts stuff himself, or at least is more in the weeds on it that type 1 is. A lot of these guys are ex-Big 4 audit guys, if they aren't guys who climbed the internal ladder of the corporate finance departments. These guys are not on a path to be CEO, and aren't really operators. Usually also handle IR. These are Smoke's in country CFOs made good basically.
BTW- I find type 1 to be almost non-existant outside of the Anglo-Saxon world, and it is much more common in the US than in the UK.
So to answer your question - sure you could be on the path to be a Type 2 guy, but probably not Type 1.
(and of course my Type 1 & 2 are over generalizations)
And yeah, network and informational interview like crazy.
posted by JPD at 8:36 AM on September 21, 2012 [3 favorites]
In Canada at least, the people I know who have most rapidly risen to CFO positions have been CAs from high status universities. That does seem to be a quick route to the top.
posted by bonehead at 8:46 AM on September 21, 2012
posted by bonehead at 8:46 AM on September 21, 2012
What is it about being a CFO appeals to you? You're basically asking "How do I get this fancy title?"
You should be thinking "How do I do the work I love doing?" Passion will then lead you on the right path, otherwise you've a good chance of being the CFO of some company and hating it because it's not what you dreamed it to be.
So focus on doing what you love, and doing it very well, and continually work to improve your role doing what you love. If that happens to be a CFO-type job, then it'll happen before you know it.
posted by jpeacock at 9:26 AM on September 21, 2012
You should be thinking "How do I do the work I love doing?" Passion will then lead you on the right path, otherwise you've a good chance of being the CFO of some company and hating it because it's not what you dreamed it to be.
So focus on doing what you love, and doing it very well, and continually work to improve your role doing what you love. If that happens to be a CFO-type job, then it'll happen before you know it.
posted by jpeacock at 9:26 AM on September 21, 2012
Best answer: I had a similar goal. I set out to become a CIO. I did achieve that. My approach was to work as a consultant with growing companies. Eventually one of them the needed a CIO and I was in. Keep in mind it took several years for this opportunity to evolve.
Specific to the CFO role you need the MBA or a Masters in Accounting/Finance. Also, getting a high level background with IT is a good idea, in many companies the CIO reports up through the CFO. The challenge in getting a C level position is not in the functional or technical skill sets, but in producing results that are visible to the CEO and Board Members. Skills in accounting are not likely to provide the opportunities for type of high impact/visible projects. The other thing is that you have to present yourself as absolutely reliable and together. You will need to be the one that volunteers for additional duties and delivers on them. This mean sacrificing in other areas of your life. You need to be prepared to deal with that.
Also, keep in mind that when companies do executive searches they often look outside the company, for someone with out any history with existing staff or for someone who will bring in a different approach.
If you want to move to that role in your company you're going to have to figure out how to impress the daylights out of the right people. (With out crossing up the person you directly report to.)
Also, network, network, network! Professional organizations, fraternal organizations, charities. Notice - no social media mentioned here. You have to network face to face. Do the social thing to, but there is no substitute for face to face.
Become a recognized expert in a new or emerging area in your field. This is where consulting came in handy. You need the folks that are hiring you to say this is the person we must have as our CFO.
Get a mentor or a coach. Someone who holds or has held the role. Be coach-able.
Work on developing your self personally - presentation skills, communication skills, and management skills.
Final thought - failure comes with the territory. This has been the hardest lesson for me. Learn to objectively evaluate your failures and learn from them.
Good luck!
posted by empty vessel at 9:32 AM on September 21, 2012 [1 favorite]
Specific to the CFO role you need the MBA or a Masters in Accounting/Finance. Also, getting a high level background with IT is a good idea, in many companies the CIO reports up through the CFO. The challenge in getting a C level position is not in the functional or technical skill sets, but in producing results that are visible to the CEO and Board Members. Skills in accounting are not likely to provide the opportunities for type of high impact/visible projects. The other thing is that you have to present yourself as absolutely reliable and together. You will need to be the one that volunteers for additional duties and delivers on them. This mean sacrificing in other areas of your life. You need to be prepared to deal with that.
Also, keep in mind that when companies do executive searches they often look outside the company, for someone with out any history with existing staff or for someone who will bring in a different approach.
If you want to move to that role in your company you're going to have to figure out how to impress the daylights out of the right people. (With out crossing up the person you directly report to.)
Also, network, network, network! Professional organizations, fraternal organizations, charities. Notice - no social media mentioned here. You have to network face to face. Do the social thing to, but there is no substitute for face to face.
Become a recognized expert in a new or emerging area in your field. This is where consulting came in handy. You need the folks that are hiring you to say this is the person we must have as our CFO.
Get a mentor or a coach. Someone who holds or has held the role. Be coach-able.
Work on developing your self personally - presentation skills, communication skills, and management skills.
Final thought - failure comes with the territory. This has been the hardest lesson for me. Learn to objectively evaluate your failures and learn from them.
Good luck!
posted by empty vessel at 9:32 AM on September 21, 2012 [1 favorite]
Response by poster: OK, while I'm getting conflicting advice in some areas (based largely on the fact that there are indeed two types of CFOs) it sounds like the overwhelming consensus is that this specific position would not be a resume-builder, and therefore I will bypass it. Thanks for the help!
posted by wolfdreams01 at 7:11 AM on September 22, 2012
posted by wolfdreams01 at 7:11 AM on September 22, 2012
This thread is closed to new comments.
posted by Admiral Haddock at 5:09 AM on September 21, 2012