CFOs’ Path to CEO: Strategic Thinking Key

The journey from CFO to CEO is increasingly common, with more current CEOs having CFO backgrounds than in the past decade. According to the Crist|Kolder Volatility Report, strategic thinking is key for CFOs aspiring to the top spot. I spoke with Mr. Rich Brady, CEO of ASMC and Global Chair of IMA, who highlighted the importance of strategic thinking in differentiating CFOs from CEOs. Brady, a former CFO-turned-CEO with an extensive military career, emphasized the evolution of the CFO role and the skills needed for CFOs to become attractive CEO candidates.

Historically, CFOs focused on financial information management, but the role has evolved into a more strategic and analytical one. Brady noted that modern finance tools have streamlined financial reporting, allowing CFOs to focus on higher-value activities such as data analytics and decision support. Additionally, CFOs are now more visible in crisis management, which has honed their communication and soft skills, making them more appealing to boards seeking CEOs.

Brady outlined five ways CFOs can prepare for the CEO role:

Recognize the evolving CFO role : CEO job requirements now align more with CFO responsibilities, leading to an increased transition rate from CFO to CEO.

Embrace digital transformation : CFOs should invest in digital innovation, such as AI and automation, to improve strategic positioning.

Maintain an enterprisewide perspective : CFOs should collaborate with other functions to understand their objectives and translate them into financial requirements.

Continue upskilling : Keeping abreast of technology and business practices is crucial for CFOs and their teams.

Take risks : CFOs must be comfortable with uncertainty and offer bold, strategic visions for their organizations.

Moreover, Brady emphasized the importance of strategic thinking for CFOs aspiring to become CEOs. He differentiated between shorter-term and longer-term planning, noting that CFOs should focus on scenario planning for the future environment rather than static plans. CEOs must transition between tactical and strategic levels quickly and maintain a contingency mindset to address unanticipated crises effectively.

In conclusion, Brady advised all CFOs, even those not aspiring to be CEOs, to develop strategic thinking and leadership skills. By doing so, CFOs can provide more value to their organizations and enhance their career trajectories.