A search in the S&P Capital IQ database, for sitting CFOs with undergraduate degrees in engineering, returns 1,466 results. No, there’s not a mistaken extra digit in there.
Some portion of those are duplicates — people who run finance for multiple entities under one corporate umbrella, for example — but still: If you didn’t know anything else about this topic, you would have to acknowledge that an engineering education is sweet-spot training for a finance executive.
To be sure, a majority of CFOs were accounting, finance or business majors in college. But after speaking with a number of finance chiefs who have engineering degrees, one must question whether those traditional educational backgrounds are really the optimal entry points. As it turns out, the way engineers think is very much the way finance executives think.
“If you think about what people say a CFO should be or what a good CFO is,” says Vasant Prabhu, finance chief at Starwood Hotels Worldwide, “you’ll hear things like he or she has got to be strategic, analytical, fact-based, willing to deal at a detailed level, objective, results-oriented. All that is what you learn when you become an engineer.”
Engineering is strategic? Really? Yes, says Prabhu, who has a degree in mechanical engineering from the Indian Institute of Technology. “Engineering is about conceptualizing problems and how to solve them. I call that strategic.”
An ability to solve problems is probably the one skill CFOs rely on most, and every single day, says Wade Miquelon, head of finance for Walgreens. What remains with someone from an engineering degree is knowing how to frame a problem, how to use the scientific method and how to think about the problem logically, he notes.
Miquelon, who earned a civil engineering degree at Purdue University, is leaning heavily on that experience right now while working on a merger with Alliance Boots, one of the largest European pharmaceutical retailers. “It’s a sort of an unprecedented deal, and every day there are 10 things I’m trying to solve that are basically new problems,” he says.
The same mindset helps with finding flaws in arguments. “CFOs are often labeled as skeptics, the people who say ‘no,’ which may be a little unfair,” says Miquelon. “The CFO is the one who has to be able to vet things, to say, ‘What has to be true for this other thing to be true? And what are the consequences if we’re wrong?’ Engineering teaches you to think logically in different ways, to question assumptions and to cross-check facts.”