COO

A High-Value CFO is …

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Last April when I did the keynote at the Prophix User conference, I said this …

Today, the trend is towards Operational CFOs who hold an MBA and bring a broader education & finance perspective, along with a strong ability to synthesize information. CEOs and Boards will demand their Chief Financial Officers possess broader-based skills as they seek business strategists and leaders in filling that role.

At the CFO Rising conference on Wednesday, the panel of finance recruiters had this to say …

–At Fortune 1000 companies the number of controllers moving into CFO positions is down by about 33%. Conversely, those finance executives who have general management experience, strong operational contributions, and a record of leading strategic initiatives are the most sought after in filling Chief Financial Officer roles today. 

–The backward-looking mindset of accounting and FP&A is now outdated and has become commoditized.

–Companies want PROspective mindsets from their CFOs. The game has moved beyond numbers. It requires a CFO to have a strong controller and finance team in place so he is free to focus on the big picture with the CEO.

–There is a trending convergence of the COO and CFO roles. (I think the CFO who brings a solid finance skill set plus operational experience is poised to win this competition every time).

–Today’s CFO requires much more than being the “finance police.” It requires passion, energy, vision, and the proven ability to move a company forward.

CFOs as CEOs

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After Business Times Online posted an article on the rise of CFOs into CEO positions, one of my Linked In colleagues, a recruiter who works with private equity clients, asked for my thoughts on the topic. 

In preparation for my keynote at the Prophix User Conference back in April I did extensive research on this topic. While the article points to the recession as the driver, my belief is that it is a trend not likely to abate once we hit the other side of the recession. So, here are my thoughts …

–Strategic Leaders vs. Bean Counters

I believe the opportunity arose about the time that CFOs began making the transition from bean counter to strategic leader with a seat at the executive table. The hottest CFO prospects today are those with the ability to predict financial trends and who bring an operational background (particularly when they also hold a CPA and and an MBA). From a career perspective, two of the smartest things a CFO can do today are gain operational experience and claim a seat at the executive table.

–Proven Operational Contributions

There is a difference between experience and contributions … and this is particularly true of a CFO with his sights set on a CEO position. In fact, as companies continue to tighten their belts, you may even see a decrease in the role of the Chief Operating Officer, since the accomplished operational CFO can handle both roles.

For example, the COO of oil and natural gas exploration and production company Anadarko Petroleum Corp. is being replaced by the CFO with much broader responsibilities that include overseeing the company’s exploration, development, production, and mid-stream and marketing operations.

Execunet points to the fact that 2 of the 8 most in demand job functions are operations management and finance.


–Networking

While many CFOs are not the best networkers, for whatever reasons, those who are reap great benefits. And the value of internal networking cannot be downplayed. Conventional wisdom says that it is easier to move up internally, than externally, in large part because you are “known and have momentum and sponsorship.” If you’ve grabbed your seat at the table, you have the power to ensure you are known and have the momentum to, perhaps, win that coveted leadership position.

Operational CFOs

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For the past couple of years, I’ve suggested that CFOs with a proven track record and deep understanding of operations would be the most in demand and valuable CFO candidates of the future. Is the current financial crisis driving that train … even faster? If so, it is potentially great news for strategic CFOs with a solid business understanding of how operational functions interplay with the numbers. It is also potentially devastating for CFOs who have positioned themselves as primarily numbers guys.

A snippet from a recent article at CFO.com, “Future Tense” …

Some finance departments are beginning to incorporate methods such as scenario modeling, sensitivity analysis, and contingency planning to help CFOs think through a wide-ranging set of potential situations, thus avoiding a monocular view of what's ahead. They are refreshing forecasts more frequently, homing in on a handful of measures that have a financial effect on the company (so-called driver-based forecasting), and doing more to provide synchronous information flow between finance and operations.

Today might be a great day to have lunch with the COO!

Who Is Hiring C-Level Candidates?

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According to Mark Anderson, COO of Execunet, who appeared on Fox News October 16, C–level execs (CEO, COO, CFO) are MOST in demand in the areas of health care, energy, environmental products and services, medical devices, and biotech. Among the disciplines hardest hit are financial services, insurance, and retail.