BearingPoint: Quarter of CFOs progress to CEO role

09 December 2014 Consultancy.uk

A quarter of CFOs transitions to the CEO role, according to research from BearingPoint. There is a gap though - more than two-thirds of the CFOs would take on the role of CEO when asked, and more than three-quarters believes their financial background increases their chances to become CEO.

The BearingPoint Institute, part of management and technology consulting firm BearingPoint, recently released a new research into the transition of Chief Financial Officers (CFOs) to Chief Executive Officers (CEOs). For this research, the institute surveyed the career paths of 178 CFOs from European Fortune Global 500 companies from 2004 to 2013.

The study shows that of the 178 CFOs from 2004, more than a quarter (26%) assumed a CEO role in the last decade, for which a two-thirds changed companies and one-third even changed sectors. This can partly be explained by economic uncertainty, as this will lead to the willingness to leave an employer for a new career path.

CFOs that became CEOs in last 10 years

Of the CFOs and Heads of Finance surveyed, more than two-thirds (69%) would immediately take on the role of CEO when offered. 82% believes that their background in finance and accounting will increase their chances to transition to an executive position, and 79% believes it will increase their chances of promoting to CEO.

Aspirations of CFOs to become CEO

BearingPoint’s research also reveals that some industry sectors are more open to the idea of a CEO with a financial background, such as the Banking & Capital Markets. Almost one quarter (22%) of the CFOs that became CEOs made the transition within this sector, although this sector was also open to promoting CFOs from other industries to a CEO position. “It appears that to become CEO in a Banking & Capital Markets business, expertise in the finance function can be just as helpful as specific prior experience within the sector. In general though, sector knowledge is still important when it comes to making the leap to the top. Even though they might transfer to a new employer, two thirds (67%) of CFOs were promoted to CEO within their industry,” says Franz Hiller, Partner and Service Line Leader for Finance, Risk & Compliance at BearingPoint.

Franz Hiller - Bearingpoint

Changing face of the CFO
According to Hiller, the enhanced role of CFOs makes them more likely candidates for the top job: “The scope of CFO responsibilities today often also encompasses regulatory affairs, the compliance realm and a company’s digitalisation agenda. By setting up their finance departments to add strategic value to the organisation, the role of CFO has been transformed to become a true business partner and co-pilot of the enterprise. It is only natural that they have therefore become much more likely candidates for the CEO position along the way.”

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Why leaders must balance technical expertise with soft skills

17 April 2019 Consultancy.uk

Soft skills matter in the workplace just as much as technical expertise, writes Samantha Caine, Managing Director of Business Linked Teams.

For too long technical expertise has been seen as the marker of a strong candidate for development into a sales or leadership position. Sales and leadership candidates are tasked with demonstrating a diverse and wide-ranging set of technical skills, yet their aptitude in these technical skills or ‘hard skills’ cannot signify great leadership potential. This is why a healthy balance of soft skills and technical ability is required. 

So what exactly is the difference between technical skills and soft skills? In engineering, it’s crucial to demonstrate knowledge of physics as well as a strong grasp on mathematical equations. Yet, in any industry, it’s important for leaders to be able to interact with other people effectively with soft skills like communication, empathy and adaptability. 

Business Linked Team’s 2018 study into internal leadership development revealed that 69% of large organisations are prioritising the identification and development of future leaders from within the workforce. As more and more organisations begin to invest in sales or leadership development within their existing workforces, more focus needs to be placed on ensuring the right soft skills are in place. 

With those soft skills in place throughout the workforce, the business will benefit from a wider pool of potential leaders developing under their noses, and it should be the same where sales candidates are concerned. 

It’s not just about easier access to ideal candidates for these positions without the rigmarole of recruiting from outside of the organisation. The leadership development study also found that 89% of HR decision makers say succession planning has become a top priority. Those currently serving in leadership positions can’t lead forever and the same goes for those generating sales for the business.

Why leaders must balance technical expertise with soft skills

From people leaving for new opportunities or retirement, to people simply stepping aside to focus on other areas of the business, successful leaders and salespeople require experienced and capable successors that will be ready and able to confidently step into their shoes and pick up the mantle without the business experiencing any lapse in performance.

Soft skills make stronger candidates

When it comes to the soft skills required, a strong leader must be able to manage through clear communication and effective time management, coaching and goal setting. They must be able to demonstrate empathy and empower their teams to be successful, productive and fully engaged. And beyond simply giving direction, they must also be able to take direction from those above them and cascade the business strategy down through their teams. 

A strong sales candidate must possess the ability to communicate value to the customer, negotiate well and protect margin or the ability to increase the scope of a particular sales opportunity. 

With the relevant soft skills in place, the business will benefit from increased productivity, greater agility against changing market conditions and greater transparency. In turn, this will provide visibility on issues and inefficiencies while removing opportunity for miscommunication. All of this can transform the culture of a department, improving employee satisfaction and reducing staff turnover. 

Ultimately, developing leadership or sales candidates will require the business to strike the right balance between technical skills and soft skills, and this requires an effective and sustained learning journey.

A balanced learning journey

Facilitating and supporting the development of leadership and sales is best achieved by establishing training groups. By cultivating training groups, businesses are creating talent pools that will inspire and support each other on the learning journey. However, personal goals and learning objectives must be defined for each individual based on their own existing skillsets and the skills that each individual needs to develop. 

With the emergence of e-learning, businesses recognise the value of online-based learning activities, yet many make the mistake of opting for one-size-fits-all solutions which are solely focused on self-study. A development solution will only deliver true return on investment if it combines e-learning activities with group learning activities that provide opportunity for shared experiences and support.

A blended learning solution that combines self-study and face-to-face group learning activities will aid strong development of the talent pool through shared experiences. Through these shared experiences, those undergoing the training will organically develop a support network that supports the development of the group as much as it supports the development of each individual. 

The blended learning approach is supported by one of the seven principles of human learning that socially supported interactions aid the individual development of expertise, metacognitive skills, and formation of the learner’s sense of self. The strongest opportunities for development can be unlocked by blending workshops with online activities such as virtual sessions, peer coaching, self-study, online games and business simulations. But it’s crucial to provide a blend of one-to-one and group sessions too.

Beyond delivering a better learning outcome for the employee, the blended learning approach allows organisations to adapt their training quickly and easily to shifting business demands in an ever-changing landscape.