As organizations face a more connected, globalized and heavily scrutinized future, tomorrow’s finance leaders need to think strategically about the know-how and credentials they will need to succeed in the future. What experiences will they need to have under their belt, and what formative relationships do they need to build with key influencers in the organization?
Until recently, the steps aspiring CFOs needed to take followed a relatively clear and linear path – a path that had been trodden by many successful CFOs at major organizations as they rose through the ranks. However, today, that CFO career path has been severely disrupted on all rungs of the ladder.
“The way we can describe the CFO career path today is that there simply is no defined ‘career path.’ The way we are going to resolve that is by being open and creative. You will have to be creative in constructing a career plan that allows aspiring finance leaders to get the skills they need.” Tony Klimas, EY Global Finance Performance Improvement Advisory Leader
As we discussed in part 1 of this series - Do you define your CFO role? Or does it define you? The disruption of the CFO’s DNA, it is increasingly difficult to define what makes a CFO: whether in terms of profile, experience or job description. As the role widens to take on increasing strategic and operational responsibilities, career development has to be tailored and modified accordingly to specific and individual profiles, rather than a clearly defined template. In some CFO roles, for example, operational experience is increasingly favored, even to the extent of operations leaders being drafted into the CFO chair to address this need.
Gerry Bollman, outgoing CFO, Fletcher Building, was originally appointed to a senior finance role at Fletcher-owned Formica to drive operational and strategic priorities. “The conversation we had was, ‘Look, what we want is somebody who is more operational, commercially savvy and strategic, and you will have a competent controller under you who can handle the accounting and competent people in the areas of treasury and tax. You need not be an expert in those areas. You just need to have enough understanding, that you can oversee those functions and lead them.’”
As we discussed in part 2 of this series – Is the future of finance new technology or new people? Preparing for the future finance function – the operating model of the finance function is changing today and will be very different in the future.
As the CFO role becomes too complex for one person to manage well, the model of a single leader will be replaced by a finance executive team, including a range of profiles, from finance COOs to the more traditional controller and accounting roles. Because of this, there will be a wider range of second-in-command positions that could be seen as the stepping stone to the CFO position. Further down the chain, the increasing use of shared services centers and automation means that the traditional finance apprenticeship and training ground will increasingly disappear, restricting the opportunity for experience and the flow of future talent.
Given this significant disruption, where should incumbent CFOs, and aspiring finance leaders, focus their efforts in terms of the experiences that will be needed from a new career path?
Based on our research and discussions with leading global CFOs, there are a number of areas and career experiences that will be critical for the future generation of finance leaders – transformation, strategy and commercial.
As businesses and their finance functions continue to evolve – and organizations drive more streamlined and tech-enabled operations – transformation management experience will be critical in developing the next generation of finance leaders (see Chart 1).
Chart 1: Tomorrow’s finance leaders need transformation experience
We also asked finance leaders worldwide what skills and experiences would be important for high-performers to make the transition to the CFO role in the future. Strategy and commercial experience emerged as to key.
Note: Some charts do not add to 100%, due to rounding
To help aspiring CFOs plan their career path, including a range of non-finance experiences, organizations need to replace the traditional linear career path with a more flexible one. This new path will function more as a “passport” system, where aspiring leaders gain a stamp in their passport as they secure the roles, secondments or experiences that will build the right breadth of skills that will be key for success in a future CFO role (see “Key stamps in the passport for aspiring CFOs”).
Securing these passport stamps will be challenging – ambitious finance leaders will need to be proactive and those who are not will likely not make it to CFO.
Key stamps in the passport for aspiring CFOs
Building this career path also requires strong collaboration with the chief human resource officer and their team – a relationship that we examined as part of our Partnering for performance series. In particular, finance and HR must link the function’s career development approach with the company’s future strategy and market context so that career development for CFOs has a focus on the future, not just the past.
- Hanne Jesca Bax
EY EMEIA Managing Partner Markets & Accounts, Ernst & Young Nederland LLP
Tel: +31 88 40 71325
- Robert Brand
EY Global CFO Agenda Leader
Tel: +1 201 872 5692
- Rick Fezell
EY Americas EY Vice Chair — Accounts
Tel: +1 312 879 6568
- Annette Kimmitt
EY Asia-Pacific Accounts Leader
Tel: +61 3 9288 8141
- Tony Klimas
EY Global Finance Performance Improvement
Tel: +1 212 773 5949
Partnering for performance series: