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Should the CFO ever become the CEO?

Brown's black day sheds light on the perils of promoting the Chief Financial Officer into the CEO's chair. The skills required to be a good CFO are not the same as being a good CEO.

Political folklore is that good chancellors make poor Prime Ministers. Mind you, Lloyd George, Neville Chamberlain and Winston Churchill all went from number 11 to number 10 Downing Street, so your folk lore may be myth more than reality.

But in the organisations I am responsible for, I look for very different qualities in these two senior executives. This is what I want from a CFO:

  • Toughness and resilience: they have to be able to say no consistently when faced with demands which routinely exceed resources. They have to be deaf whenever it comes to hearing excuses about why budget can not be met. They have to have a highly sensitive radar which spots financial nonsense, three months in advance and helps us avoid financial meltdown.
  • High technical skills: I have just come out of a three hour meeting on input and output VAT, exempt, non-exempt, zero rated, recoverable and non-recoverable VAT. It is a joy to have experts who can deal with this garbage.
  • Total precision and reliability to the point of dullness: I really, really do not want our finances to be exciting. I want them to be stable and predictable, and I must have 100 percent confidence in the numbers which are put in front of me.
Now look at the skills which I am not really looking for in a CFO:
  • I do not want a charismatic, inspirational and motivational CFO. I do not need our VAT return to be inspired or motivated: I want it to be accurate.
  • I do not want a visionary CFO. A CFO who is dreaming the big picture is of less value than the CFO who can grapple all the detail into submission, before the detail spins out of control and overwhelms us.
  • I do not want too much creativity and flexibility from the CFO: I have no intention of becoming the next Enron or banking debacle.
Brown supporters will argue that he had many of the qualities of a good CFO, and perhaps Blair had the qualities of a good CEO. But when Brown moved from number 11 to number 10 he was horribly exposed. He did not change, but his role changed and he needed different qualities to succeed in his new role. He has failed to change.

And that is a message for all of us. We can only succeed in context. Churchill was great in war and lousy in peace. When we are promoted or move jobs, we can not simply continue with our previous model of success. To survive we have to learn a new set of tricks. And the longer you have succeeded in one role (as Chancellor of the Exchequer for 11 years in Brown's case) the harder it is to see the need to change. Past success can kill our future prospects.

(Pic: FreeWine cc2.0)

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