I was reading an article by Anjli Raval in the Financial Times about the transition for CFOs to the CEO job. She quoted a survey by Heidrick & Struggles which showed a third of CFOs in the FTSE 100 firms became the CEO. This is up from 21% in 2019. Raval makes an interesting observation, “research shows that CEOs promoted from the CFO job do not drive top-line revenue growth as quickly as those from other backgrounds, particularly in the first few years”. Why is that the case?
The article offers a few reasons about these promoted CFOs having a “cash-preservation mindset over a drive to pursue new opportunities”. Also, as the CFO, they had been making tough budget allocation decisions which had not been popular with their division head colleagues. Now they are the boss, but not everyone is happy about it. As Yogi Berra said, “Leading is easy. It is getting people to follow you, which is hard”.
That skill set isn’t taught to people trained in finance and accounting. Analytical people, in general, are not particularly people focused. They are focused on the numbers and protecting the cash flow. Nothing is wrong with that but the leader’s role is different. They need a defined set of skills and usually they are promoted to CEO, but given no training on the areas where there are bound to be gaps.
Sales skills are not part of their academic curriculums and usually nothing they have ever done themselves. If you are the boss of an organisation with a salesforce, then your accounting credentials count for nothing. No one in sales will take you seriously as having any opinion worth regard. Salespeople are a tough crowd. They are self-sufficient, robust, resilient, self-made in their careers based on their success in selling solutions to buyers. From their point of view, someone who just counts up the numbers, but has never sat across from thousands of ornery buyers, won’t command much respect. Fancy degrees and letters after your name are irrelevant to salespeople.
If the new CEO wants to get salespeople behind them, then they had better spend a lot of time with their salespeople visiting buyers and hearing firsthand how tough the profession of sales is. I am thinking back to all the CFOs I have worked with and in my experience, most of them looked down on salespeople. That attitude won’t win any hearts and minds and as the boss, we need our salespeople to be fully committed and firing on all cylinders. Treating the salespeople as the great unwashed may make the new boss feel superior, but salespeople are experts at reading between the lines and summing people up very quickly. They won’t be fooled.
The other usual skill gap is in dealing with all different types of people. When you spend your career in technical specialty areas, there is a common language and understanding with your immediate colleagues which is not shared outside your division. Lawyers, engineers, IT people spring to mind. Their education didn’t put much emphasis on communication and people skills and when they become the boss, that gap is highlighted. Does the organisation recognise that and give them any training? Usually “no”. Somehow it is imagined they will just magically transform themselves after a long career path in a box and become hale fellow well met types to the masses.
I am thinking of a lawyer I know here. I see him at a lot of networking events and always wonder about what he is trying to achieve? Presumably he is looking of potential business as a lawyer. Interestingly, when I engage him in conversation, he is stiff, awkward and definitely does not make you feel welcome, comfortable or relaxed in his company. The contradiction of aims and reality is quite profound.
If you make the leap from technical person to leader, then you need to work on yourself. The company might give you an Executive Coach, but unless they are experts in communication and people skills, they will just ask a bunch of deep, meaningful and searching questions and provide no answers. Very unsatisfying in my experience. Take personal accountability and get help on improving your communication skills pronto. Also, make a bigger effort to learn how to get on with people who are just not like you and never will be like you. We can’t fire everyone who is different to us, as much as we may think that is a good idea. It is better to change ourselves and become more skilled in working with people than eliminating the very people we need to make the organisation a success. If we don’t get the people and communciation parts right, then we will struggle to have people follow us and our time at the top with be brief.
