CPA

The CPA and Other Finance Credentials

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Does a CPA matter? What about a CMA? Or, the relatively new CCFO? Do any of them make you a better Finance Chief? That … is the age-old question and continuing debate. New year … same debate. See my 2010 and 2012 blog posts.

On one side of the table are the companies and CFOs who hold credentials. On the other side, are the companies and non-credentialed CFOs. I think the difference today centers on the evolving role of the Chief Financial Officer. With the continuing CFO sprawl (the Chief Financial Officer becoming the Chief Everything Officer or the Chief the-Buck-Stops-Here Officer) and being a strategic leader who sits at the executive table with deep involvement in all aspects of operations … does holding a CPA matter as much?

Having worked exclusively with finance leaders for almost 10 years, I have my own thoughts. And although they are unlikely to influence one side or the other, this seems to be the bottom-line …

What matters most is what your target audience believes they need and therefore wants.

If you are looking to make a move in the upcoming year, it is critically important to identify your target audience. If you don’t have a CPA but you are targeting companies who all “require” a CPA candidate, it is going to be a longer-than-usual, even more frustrating search. It is possible, some of my clients have breached that requirement, but it requires having such compelling problem-solving value that a company is willing to look past their own requirement.

At the risk of being redundant …

— Leverage your branded, problem-solving value.

— Identify who needs what you bring to the table.

— Play in that space.

— Build & nurture a strong network.

It is a new year, and I wish you all the best. If I can help you achieve your career goals in 2018, give me a call. I would be happy to help.

Copyright CFO-Coach 2018

 

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Cindy Kraft is the CFO-Coach and America’s leading Career & Personal Brand Strategist for Corporate Finance Executives helping clients understand their marketability, articulate their value, and position themselves as the clear and compelling choice. She is a Certified Reach Personal Brand Strategist, Certified Reach Online Identity Strategist, Certified Career Management Coach, Certified Professional Resume Writer, and Job & Career Transition Coach. Cindy can be reached via email Cindy@CFO-Coach.com, by phone 813-727-3037, or through her website at www.CFO-Coach.com.

The CFO Track

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There is an interesting study from Ernst & Young on the career path to the CFO for the top EMEIA (Europe, Middle East, India, and Africa) companies. I’ve provided some of my thoughts compared to what I’m seeing in the States …

— The MBA was the most important educational consideration in the rise to CFO with only 3% holding both the MBA and an accounting background.

This is vastly different than what we see nationally with many CFO job descriptions “requiring” or “preferring” a CPA. In my conversation with an executive recruiter yesterday, he said his CFO profile always includes a public accounting background.

— 70% of the CFO hires came from a different sector.

While that is a very high stat, I do see that trend here in the States as well. Companies are recognizing that a breath of fresh air from outside the industry can help them to stop doing what they’ve been doing in order to get different results, even if that difference is merely getting unstuck.

— 57% were internal hires vs. 43% external hires.

These numbers align pretty well with CFO.com’s stats last November where 57% of Fortune 1000 company CFOs were promoted from within. What is worth noting stateside is this … 59% of those CFOs who were hired externally were sitting CFOs. It remains very challenging to secure the CFO seat if you haven’t held the CFO title sans an internal promotion.

— Operations-oriented divisions account for 26% of the CFO hires.

This isn’t at all surprising. In fact, it’s a bit low when compared to the recent Accenture study which says 59% of all finance executives are consistently involved with improving operational performance. Of those 59%, 24% have daily and 44% have weekly communications with their operations counterparts.

Another very interesting point from the Accenture study … “Respondents overwhelmingly select interpersonal, communication, and leadership skills as having a substantial impact on their professional effectiveness.” What are you doing today to build your professional skill set for tomorrow?

CFOs as CEOs … Update!!

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Over the past year and a half, I’ve penned a couple of posts (CFOs as CEOs and Decade of CFOs) on the trend of CFOs moving into the CEO seat. In  a new article for  CFO Zone, Christopher Langhoff, who conducts financial officer assignments for Russell Reynolds, chimes in on what he is seeing. 

Here are a couple of snippets … but if you’re a CFO aspiring to be a CEO, at some point you might want to read the entire, albeit brief, article:

"We have more and more clients that are coming to us asking for a world class CFO that will likely be ready to be CEO in two to three years … When Sox was in full gear there was a need for a CFO who was a CPA. Now, companies are looking for a strategic CFO, a business partner. There could be a big shift."

In order to be world class, the people who need to know about you must know about you! Is your light shining beyond your corner office? If not, it will make it extremely difficult for your “world class” brand to be known.

Langhoff touched on something else I think is extremely important …

The first quarter also showed a continued, robust turnover of CFOs in the middle market.  "The lifespan of a CFO can be shorter than an NFL career," says Langhoff. As for the rest of the year, Langhoff predicts more turnover. Over the past four months, Russell Reynolds reported a dramatic increase in search activity in the United States, Europe and Asia that spans industries.

That means two things:

1) Your position is NOT safe; and

2) There ARE new opportunities for “world-class” talent!

To CPA … or Not?

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It’s tough love time. 

A coaching session with one of my clients around what skill sets he might need as he moves towards his dream of being a CFO got me thinking about the old “to CPA or not” dilemma some Chief Financial Officers (and wannabes) face.  Some companies require it; some companies prefer it; and other companies don’t care. If a company falls into the first category, it’s unlikely a candidate addressing the unfairness of that requirement will change anyone’s mind. 

Here’s the thing. It’s not about you.

If you’re car shopping and what you really want is a sleek Jaguar with all the bells and whistles (my personal dream); but the car salesman says, you know, what I think would work better for you is this model right out of the Flintstones era complete with manual steering and running shoes to protect your feet … would you buy? I’m guessing the answer is no. 

Now I’m not at all implying there is that big of a gap between a CPA and a non-CPA … and no offense is intended. I’m exaggerating to make this point. You know what you want and it’s unlikely you’re going to plop your bag of money down to buy what the salesman wants to sell you rather than what you want to buy.

That means, you have two viable options …

–Get a CPA. An operational CFO with both a CPA and an MBA is a very high-value target. If you’re goal is to play in the public company space, it might make sense to get the credential.

–Get visible to your target market. If you don’t have a CPA and have no desire to get one, that’s fine. There are still plenty of opportunities available to you, too. And to the right audience, you are still a high-value target. Stop spending time targeting companies who require a CPA and get focused on who needs what you have and is willing to plop down a bag of cash to get it.

While complaining about the unfairness of the requirement is certainly an option, it’s unlikely to change anything. A much better strategy is to play from your strengths to the right audience.

The Secret Weapon for CFOs is the Intangible

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One of the discussions by the recruiter panel at the CFO Rising conference was around the intangibles of being a Chief Financial Officer. Intangibles … as in presence. It won’t matter how great your finance acumen, skill sets, and deliverables are if you can’t, or don’t, communicate it compellingly. You won’t be able to sell it. If you don’t believe your greatness, no one else will buy it either. 

In addition to the solid finance skill set, operational contributions, and perhaps even the CPA and MBA designations, strategic CFOs who desire a seat at the executive table must bring personal presence, charisma, and the ability to inspire confidence. This is NOT an extrovert / introvert issue. It IS about having confidence combined with stellar communication skills. 

If you’ve been the catalyst that has led transformative initiatives, how are you talking about the problems you solved along the way?

If you’ve been a game changer that has led to growth, what’s the behind-the-scenes story that looks at the challenges and issues you waded through to deliver the growth?

If candidates can’t articulate these compelling stories with confidence, the stories will fall flat. 

Digging deep to uncover a compelling value proposition is hard work. However, as in most things, the hard work inspires confidence and confidence leads to self-belief. When you believe in yourself and your ability to do great things based on a solid record of contribution, you can sell it and companies will buy it. 

CFOs typically call me for the tangible … a resume. What they get is the intangible … a clear, compelling, and authentic value proposition that they can say, believe, and sell.

What Employers Want from CFOs

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Executive coach Mike Smith did a great job of summarizing comments made by Spencer Stuart’s Karen Quint at a chapter meeting of FEI.

Some very key points from that presentation include this one … “Karen mentioned that the time to get ready for a new role is before the job comes up.” In other words, embrace the “I’m merely between searches mentality.” Have a career survival plan and execute it daily. Despite the fact that CFO tenure is up (partly due to the recession), the fact is that corporate loyalty is tied directly to last quarter’s numbers. 

Additional key points from the article …

–Since 2003, the number of CPA CFOs has risen from 29% to 45%.

There is a lot of chatter among finance executives around the necessity of holding the CPA designation. The reality is, if a company requires it … that is their prerogative. You can’t get around the requirement through a job board or a recruiter, but you “might” be able to get around it through a direct contact with the CEO or a Board member. 

–The national average of an external CFO hire is 40%.

That means a couple of things. First, 60% are internal hires, which is a pretty big number. And it also means that the competition is extremely stiff for the remaining 40%, which is a pretty low number. To compete for those external positions, a candidate must stand out from among all the other CFO candidates vying for those same jobs.

–Today’s Chief Financial Officer is more influential and more visible. He is able to build strong relationships throughout, across, and beyond the company and serves as a strategic business partner.

Bean counting is out … driving strategic vision is in. To accomplish that, CFOs must possess solid interpersonal, communication, and negotiation skills. "CFOs not only want people with people skills working for them, they themselves bring higher value when they bring relational skills sets to the table." (full post)

Quint also wrote an article for Business Week if you’re interested in her thoughts on “Boards and the expanding role of the CFO.”

CFO Recession Impressions

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The November 2009 CFO Magazine contained a survey of Senior Finance Executives’ thoughts on the impact the recession was having on their role/career. Very interesting results particularly because responses were categorized by Chief Financial Officers, VPs of Finance, and Controllers.

Here are a few that jumped out at me …

–41.7% of CFOs said the recession has enhanced their career opportunities

–42.4% of VPs of Finance say it has harmed them because of fewer opportunities both internally and externally

–56.6% of CFOs say their role has become more important and respected 

–86.8% believe they have a voice in the company beyond finance

–27.9% feel they are stuck in a siloed role

–66.6% of all finance leaders say specific past experience (treasury, investment banking) has helped them achieve their current role

–48.3% attribute success to demonstrating their abilities such as IPO, restructuring

–28.5% of CFOs believe operational experience will help them advance

–3.3% believe that an MBA or CPA will be beneficial

–30.5% of CFOs would leave for the right job

–39.1% would NOT leave, citing enjoyment  of their current role as the reason … NOT uncertainty of the current environment

Interesting is the discrepancy between the belief that operational experience will help CFOs advance (I believe that’s true as well) and where having an MBA or CPA falls … particularly in light of so many companies making those credentials a requirement. What exceptional talent might companies be missing out on by adding that requirement?

Also curious was the reason CFOs cited for staying in their current jobs … enjoyment?

Thoughts?

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.

CPA CFOs

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Back in March of 2007, I authored an article on CFO career trends. Here’s an exerpt:

CPA CFOs are the candidates of the future. A CPA CFO with operational experience will offer a compelling value proposition.

The catalyst for “Who Needs a COO,” in CFO.com was Starbuck’s elimination of the COO role and the filling of that role by the CFO. And, according to this article, other companies are following suit as CFOs with technical qualifications, absent from most COO backgrounds, are challenged to partner with the CEO in driving profitability.

I’m updating my previous statement … CPA/CFOs with a solid record of operational contributions offer a compelling value proposition.

CPA CFOs

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There was an interesting Finance Quiz in CFO.com recently. For those who missed it, you can read it here: http://www.cfo.com/article.cfm/7938502/c_7935456?f=home_todayinfinance

For me, and for those of you on a CFO–track, this question should have caught your attention.
3) What percent of today's Fortune 1000 CFOs have neither an MBA nor a CPA?
a. 92 percent
b. 24 percent
c. 10 percent
d. 55 percent

Answer: b. Twenty-four percent of Fortune 1000 CFOs have neither a CPA nor an MBA. In 2003, many more — 41 percent — lacked either qualification.

A–players who want to go to the top need to understand the importance of this statistic. The number of CFOs – who are not credentialed – has dropped considerably in the past three years, and that number will continue to fall.

CPA CFOs are the candidates of the future. According to Spencer Stuart, the number of CFO-CPA’s among Fortune 1,000 companies has almost doubled in the past two years. The trend to recruit CFO’s with more technical accounting backgrounds will probably only continue into the next decade. Not being a CPA will make it increasingly more difficult to compete for top CFO positions.