Benefits to having a CFO as CEO
Part IIn today 's complex business environment, more and more companies are turning to Chief Finance Officers (CFO) to assume the premier position of Chief Executive Officer (CEO) of the company. However, the qualities required of a CEO are not always in line with the training and experiences of a former CFO. Yet the CFO can bring many qualities to the CEO position to help a company succeed. What are the benefits to having a CFO as CEO, and what are the required qualities of a CEO that may hamper the CFO 's success in this position?As the leader of a corporation, the CEO must be a well rounded leader. The CEO 's key responsibility is "making critical strategic decisions and creating conditions for those to be well-executed" He must have the people skills to motivate and build consensus both among the employees, shareholders, and board members. He must be able to develop a strategy and swiftly and effectively implement it.
"A CEO must think at a higher level of abstraction - more inductively and less deductively. A CEO must be more willing and able to act on key decisions with fewer facts, relying more on grounded assumptions. And a CEO must be able to communicate effectively to a broader constituency - in particular, he must be far more politically attuned." John Dasburg, CEO of Burger King and former CFO of Marriott International IncGenerally the CEO is more concerned with the "Big Picture" of the company, and can not afford to immerse themselves in the details of any specific area. They are the motivators and leaders. Often the CEO can be successful simply by selling his vision and strategic plan, while letting others such as the CFO work out the details. In contrast, people expect the CFO to be detailed and analytical, even critical in their examination of the strategic plan, by examining it for financial flaws.
Probably the biggest barrier preventing CFOs from succeeding as CEOs is that of management skills. The CFO is an expert in the financial underpinnings
"A CEO must think at a higher level of abstraction - more inductively and less deductively. A CEO must be more willing and able to act on key decisions with fewer facts, relying more on grounded assumptions. And a CEO must be able to communicate effectively to a broader constituency - in particular, he must be far more politically attuned." John Dasburg, CEO of Burger King and former CFO of Marriott International IncGenerally the CEO is more concerned with the "Big Picture" of the company, and can not afford to immerse themselves in the details of any specific area. They are the motivators and leaders. Often the CEO can be successful simply by selling his vision and strategic plan, while letting others such as the CFO work out the details. In contrast, people expect the CFO to be detailed and analytical, even critical in their examination of the strategic plan, by examining it for financial flaws.
Probably the biggest barrier preventing CFOs from succeeding as CEOs is that of management skills. The CFO is an expert in the financial underpinnings
References: . Durfee, Don. SAY YES TO DR NO: New research suggests that CFOs are an essential counterweight to optimistic CEOs. CFO Asia, 7 Sep 2006http://www.cfoasia.com/archives/200609-07.htm2. Favaro, Paul. Making the Leap from CFO to CEO. Financial Executives Online. November 2001http://www.favaro.net/publications/cfo-to-ceo/CFOtoCEO.htm3. Durfee, Don. The Top Spot: Why more companies are tapping their finance chiefs for CEO. CFO Magazine. 1 October 2005http://www.cfo.com/article.cfm/44444684. Corporate Finance. CFO to CEO1 April 2005http://www.cristassociates.com/press/CorpFin_CFOtoCEO_040105.pdf