The CFO's Evolving Roles.

• Author: Favaro, Paul

It's been many years since a CEO was widely assumed to be little more than the ultimate bean counter. While schooled in finance, many executives on a CEO track -- or in that seat themselves -- have business administration degrees or considerable operating experience that has prepared them for a very real strategic role, frequently as the chief executive's right-hand person.

The following articles examine the CEO role from several angles: as a potential springboard to the CEO chair; the skills that recruiters look for in placing top candidates; and from top financial executives themselves in their oversight of chief information or technology officers. Unquestionably, the CEO role at many companies is more complex and demanding than ever -- but also potentially more rewarding, and not just financially.

"There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things."

--Niccolo Machiavelli, The Prince

In his famous advice to Renaissance statesmen 500 years ago, Machiavelli articulated one of the perennial truths of leadership -- that taking the reins of power can be one of the most "perilous" and "uncertain" things a person can do. For any CFO with designs on a CEO position, this is advice well worth heeding. The more complex role of chief executive requires that most CFOs learn a new set of skills to help them tolerate and manage ambiguity and nuance. While CEOs often have top-notch analytical skills, making the transition to the leadership role of CEO can have career-ending consequences.

The track record of CFOs graduating to a CEO post is mixed. Some of the better-known CFO-turned-CEOs from the past had difficult tenures, including Robert Allen at AT&T Corp., Roger Smith at General Motors Corp. and Douglas Ivester at Coca-Cola Inc. But several ex-CFOs currently in the hot seat are getting high marks, including Edward Liddy at Allstate Insurance Co., Henry McKinnell at Pfizer Inc. and John Dasburg at Burger King Corp. What separates the winners from the losers?

"What is most surprising is that when a CFO moves into the company's CEO position, they often find themselves unprepared to deal with an altogether different set of challenges -- having less to do with financial know-how and more to do with the intangibles of leadership," says Thomas Neff, U.S. Chairman of executive search firm Spencer Stuart, who has placed many executives into CFO and CEO positions. "CFOs who are successful as CEOs have often ventured well outside their traditional financial oversight role and learned all aspects of the business -- from building a relationship with the board to line management."

Two questions are often asked by CFOs who aspire to the CEO job and seek to avoid rising too far, too fast. First, what are the key skills required for the CEO slot that are different from those typically possessed by a CFO? Second, what can CFOs do now to help themselves prepare to make the leap successfully? The transition to CEO can be quite manageable -- as long as the CFO has taken the time to build experience in the right areas.

The Rise of the CFO

Of course, even to be considered for a CEO post, a CFO must have already developed an impressive array of abilities. In addition to having superior financial and accounting management skills, today's CFO must advise the...