Once there was a finance manager who worked hard and consistently met expectations. Eventually he ascended to become a divisional head of financial planning and analysis. As he steadfastly pursued excellence in fulfilling the requirements of his job, the manager became the go-to person whom senior executives relied on for accurate financial information.
When promotion season returned, however, the manager was passed over. As Rick Smith and James Citrin relate in their recent book The Five Patterns of Extraordinary Careers (Crown Business, 2003), after the manager endured a frustrating period in which younger colleagues were promoted over his head, he was laid off. (When the book went to press, add the authors, the manager remained “incredulous as to why he went off the tracks” and was still “desperately looking for a job.”)
The manager’s handicap — one that’s not uncommon, according to executive career consultant Larry Stybel of Boston-based Stybel Peabody Associates — was an inability to think beyond his job description. Finance is a discipline that encourages conservative thinking, of course, and creative approaches to accounting have “consequences you don’t even want to think about,” notes Stybel.
Yet the ability to think in different modes — and to recognize the importance of disciplines outside finance — is what ultimately distinguishes great CFOs from the merely competent. In an informal follow-up to their book, Smith and Citrin asked executive recruiters at Spencer Stuart for extraordinary examples of men and women who held a rigidly defined finance title: controller. The names that ended up on their list, explains Smith, turned out to be the controllers who were considered the most innovative in their roles — who had “the business perspective to most effectively apply financial tools.”
Deliver Unexpected Value
In finance, Smith continues, it’s very easy to fall into the mindset that defines success as “avoiding unexpected negative outcomes.” That attitude is reinforced by many nonfinance executives, who often have little regard for finance executives once they’ve stepped beyond the bounds of their usual responsibilities. But those low expectations, says Smith, offer finance executives a “phenomenal opportunity to deliver unexpected value.” Once operations employees see the light, adds Larry Winkler, CFO of wireless provider InPhonic, “they never let go of the finance person.”
Operations is the key word, says Dennis Lacey. The finance chief for Teletech, a provider of outsourced customer-management services, insists that you’ll “do a better job as a CFO if you have operating experience.” (His own story — more about that later — seems to bear him out.)
Peter Currie, CFO of Royal Bank of Canada, agrees. “You have to have tangible experience” with your company’s products or services, he says. And to be truly a part of the team, adds Currie, “you have to identify with the people in the company who are making the product.” By contrast, says Winkler, “if you’re just counting things, you’re not adding value; you’re a historian.”
Just Show Up
Once you accept that simply delivering the numbers is not enough, what next? Larry Stybel maintains that an act as simple as scheduling time to get outside the finance department can have a profound impact. You’ll learn a lot — and you’ll help other executives to perceive you as a business partner. Tell other managers that you’d like to spend half a day on the factory floor, or accompany sales staff on client calls.
For a mid-career finance executive, says Stybel, sales experience is a particularly good idea, “even if it’s just for a few months.” Currie of Royal Bank, where understanding customer behavior and profitability is a management priority, sees this as an especially compelling motivation to broaden your view. “The world has changed substantially,” explains Currie; financial-services customers are shopping around more.
To gain experience and visibility, you don’t need to restrict yourself to your own company, either. Stybel encourages his clients to join the boards of other companies (though these days you’d certainly want to be very selective). A lower-pressure option might be to volunteer for a nonprofit organization, say in treasury or fund-raising.
Trial by Fire
A tough situation can be a golden opportunity. As related in Extraordinary Careers, Teletech’s Dennis Lacey was once an audit partner at Coopers & Lybrand. In 1989 a Coopers client, Capital Associates, recruited him to be its vice president of operations and chief operating officer. Shortly thereafter he added the title of chief financial officer — and determined that the company was deep in financial trouble and headed toward bankruptcy.
Lacey didn’t respond by sticking to finance. While honoring his newly acquired CFO responsibilities by recapitalizing the company and arranging bank financing, he kept his hand on the COO throttle as well. Once the company’s rehabilitation was under way, the board made him CEO, a job he held for the next seven years.
As chief executive, he restructured the company, installed new management, and came up with a new strategy for the company’s direction. The company’s share price rose from 3 cents to $5. After taking the company from near-collapse to 21 consecutive quarters of profits, Lacey led the successful sale of the company. He went on to lead the turnaround of CKE Restaurants Inc. before joining Teletech.
“It was a trial by fire,” says Lacey of his experience at Capital Associates. “And that was actually an advantage.” He credits his rise to chief executive to addressing the company’s problems holistically, with an eye on both administrative and financial solutions. It’s hard to imagine what kind of career Lacey might have had if — in the midst of his company’s crisis — he had stuck to crunching the numbers.
Lacey’s take-charge attitude was welcome because Capital Associates needed help and leadership. But Rick Smith warns against confusing proactive with overly aggressive. In other words, make sure you have permission — or at least an implicit understanding — that you can exceed your normal role.
You certainly shouldn’t “demonstrate authority when you don’t necessarily have it,” adds Smith. He tells of one executive who was working on a special project with a team. She finished the project on her own and presented it to the CEO, who was impressed — but the executive also alienated her teammates, who felt she was showing them up.
That same warning holds in more-ordinary situations. If you haven’t been invited to a nonfinance company meeting, don’t simply invite yourself. Instead, obtain buy-in from your boss by explaining how your participation would help you perform your finance job better. (Naturally, you will have carefully selected a meeting where you believe you’ll have something to add, too.) As Smith puts it, “Just because you weren’t invited, doesn’t mean you don’t belong in the room.”