Chris Liddell, the newly installed General Motors CFO, could be the poster boy for the portability of finance skills. Coming from tech giant Microsoft, Liddell has a sterling reputation but no direct experience with the auto industry and its various manufacturing and distribution challenges.
To be sure, Liddell may have benefited from the widespread frustration with veteran executives at GM and other automakers. But what likely got him the job (and a shot at the CEO spot, according to GM interim CEO Edward Whitacre) was the general management skills that are increasingly setting the best CFOs apart from the rest. In the press release announcing the move, Whitacre said he and the board were “looking to [Liddell's] experience and insights in corporate strategy” to help with the automaker’s massive restructuring efforts.
“GM’s board is not asking [Liddell] to design a car or manufacture one,” says Russell Boyle, head of the financial officers practice at Egon Zehnder, noting that Liddell didn’t have any technology-industry experience before going to Microsoft. “The ability to be a change agent, to influence across the businesses, and to bring something to the table beyond the traditional analytical skills — that’s what’s really being sought after here.”
And while Liddell might stand out for the starkness of his change and the elevated profile of his new gig, Boyle says CFOs with his kind of skills cross industries “all the time,” and that it’s happening no more or less frequently during the downturn.
A number of recent CFO appointments seem to prove Boyle’s point. Former Washington Mutual CFO Tom Casey just took the same role at Clear Channel Communications with no prior media industry experience listed on his résumé, Brian MacDonald joined Sunoco as CFO from Dell, and Peter Hathaway became JDA Software’s CFO after 14 years in finance at Alliance Waste Systems.
Still, it’s fairly rare these days for large companies to take a bet on a CFO from an industry far afield of their own. CFO‘s analysis of Audit Analytics data shows that of the approximately 77 S&P 500 companies that have had a new CFO start since January 1, 2009, only 15, or about 20%, came from other industries. Even then, many of the other industries were closely related to that of the hiring company. A majority of companies, in fact, preferred to stick with a known quantity and promote from within; only 40% of new CFOs came from outside the company.
Why can it be so hard for some finance executives to switch sectors? Often, boards and CEOs may simply be wary of taking chances. “Finance skills travel, but what I’ve found is that there are CEOs who have it stuck in their heads that they want someone with a specific background,” says Linda Havard, who became CFO of Playboy Enterprises after 17 years at oil giant ARCO.
Havard, who recently left Playboy, is “industry-agnostic” in her current search. “I knew nothing about oil or entertainment, but if you come in with the right attitude — that you have to earn people’s respect and roll up your sleeves — it doesn’t really matter,” she says.