CPA CFOs

What Makes a CFO a Key Part of the Executive Dream Team?

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Mike Wilke, founder of The CFO Advantage, pointed me to a great post about 7 key attributes for start-up CFOs. I think many of the attributes transcend “start-up” CFOs and have provided my thoughts … and welcome yours.

It’s all about the CPA designation. Without a doubt, the CPA vs. non-CPA controversy garners unending discussion, debate, and opinion. Regardless of where you fall in the debate, the reality is, as the article states, the CPA designation is for many companies foundational. I’d go one step further than the author and say that the CPA in conjunction with an MBA from a top-rated school is “the” winning education combination … when accompanied by a clear record of contributions.

Operational excellence. The author frames this as “installing just the right amount of process, reporting and structure” for smooth-running growth. Looking at the bigger picture, the CFO with solid operational experience, expertise, and track record is an incredibly solid prospect. Add the CPA/MBA and you might just have prospective companies salivating.

“Been there, done that.” Looking beyond start-up, I’m seeing some companies beginning to recognize that they have been entrenched in industry thinking and if they continue on that course, they will keep getting what they’ve been getting. To gain the competitive edge, they need some fresh thinking. From the candidate perspective, it takes visibility and a solid network to close that sale.

I found this stat very interesting … “25% of CFOs make it to the CEO of a start-up and are better prepared than ever to take over that senior leadership role.” Bottom-line, regardless of the company size, it’s about leadership. CFOs are mere bean-counters no more.

CPA CFO vs. Non-CPA CFO

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The controversy is back. 

Should Chief Financial Officers be required to hold a CPA designation, or not?

It began with a guest post on the FEI blog, with a couple of nightmares, I mean examples, of companies with non-CPA CFOs at the helm, and continued on through the comment section. This has also been a hot topic in Proformative, too. 

Non-CPA CFOs say it doesn’t matter, shouldn’t matter because they can still do the job, and companies just don’t understand that fact. Companies “glorify” that piece of paper. What they fail to understand is that it’s not about them. It is about what corporate leadership has decided is right for the company. 

The other argument is that CPAs are bean counters and not strategic leaders. I couldn’t disagree more. Many more of my clients began in accounting, secured their CPA, and have gone on to holding a seat at the executive table as strategic leaders. 

Statistics from Spencer Stuart support what I see. The number of CPA CFOs has risen from 29% to 45% since 2003. Simultaneously, bean counting is out; driving strategic vision is in high demand. The two are not mutually exclusive.

Rather, I think it speaks more to the wiring of the individual. Some CPAs are numbers nerds. It’s what they love and where they feel comfortable. Their lifelong goal may be accounting. It works for them.

On the other hand, some numbers savvy folks are also quite high on the “D” (dominant) and “I” (influence) DISC scale. They have both leadership and people skills. Those CPA CFOs are both left brain and right brain thinkers and will always be high value targets. 

Since you can’t change what a company has decided they need, it’s important as a candidate to identify your target audience. Who needs what you bring to the table? It’s a much easier sale then beating your head against a wall trying to convince someone else that they need / want / should buy something different.

One final thought … the second example in the FEI blog post points to the reason why companies, as a rule, prefer to hire sitting CFOs over candidates who have never held that title.

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.