VideoSo you want to be a CEO? Wanna be in charge? The Big Cheese?
Well, these days it is increasingly common for CFOs to ascend to the CEO job. According to research by Spencer Stuart recruiter E. Peter McLean, 20 percent of the CEOs appointed in 2000 spent time in the finance ranks. While he has no historical comparisons, McLean believes it is safe to say that now more CFOs are included in CEO searches than they were previously, and sometimes they beat out their nonfinance rivals.
The reasons for this are compelling. Over the past decade, finance executives have become more involved in strategy; they have been given operations oversight; and as they have taken a broader view of the organization, they have worked more intimately with the CEO. "CFOs penetrate all facets of a business, which is critical to understanding what levers to push as CEO," says Frank E. Weise III, CEO of Cott Corp. and former CFO of The Campbell Soup Co.
But is the top job all it's cracked up to be? What is life like for a CFO who becomes CEO? How are things different when you're faced with what Weise calls "the weight of accountability" that only a CEO truly shoulders? What is the transition like? What are the pleasures? The disappointments? And how about that finance background: Is it adequate, or is there a lot of learning on the fly?
We asked Weise and several other CFOs-turned-CEOs. Here's what they had to say:
BRUCE C. EDWARDS
Powerwave Technologies Inc.
"CEO is a much better job," asserts Edwards, who has been chief executive of the Santa Ana, California-based wireless company since 1996. "It was great being a CFO [at AST Research Inc. for eight years], but after doing all the legwork and having someone else make the call, I wanted to see what I could do if I were making the call."
Oddly, he finds that being in the hot seat adds up to less stress. The first day on the job, for example, Edwards was caught in traffic on his then-unfamiliar Silicon Valley commute. He was frantic that he would be late for his first meeting. "Then I realized they're meeting with me," he says. "They won't start until I get there."
He also has treasured having more control over his time. When his daughters were in high school (they are now both in college), he could adjust his schedule to coach one daughter's basketball team and attend the other's swim meets. "As CFO, you need to be there whenever the CEO wants you," he says. Of course, as CEO, he has another authority to answer to — customers. "If Nokia wants to see me," he says, "I have to go to Finland."
And even faced with today's tough economic environment — Powerwave Technologies's latest quarterly sales were off 29 percent — the 47-year- old Edwards has been able to maintain his calm. "Because of my CFO background, I know we have the balance sheet to weather this storm," he explains. "But as CEO, I've had to increase my visibility to make sure everyone sees what I'm seeing — that the wireless market will develop, and that this correction will be a short-term blip in a long-term success story."
FRANK E. WEISE III
Cott Corp.
When Frank Weise started as CEO of Cott in 1998, the Toronto-based soft-drink retailer had been leaderless for several months after the death of its founder. The business was in disarray. But Weise, who always welcomed tough assignments in his 25 years as a finance executive at The Procter & Gamble Co. and The Campbell Soup Co., didn't arrive proclaiming he would save the day.
"Being CEO requires a different set of listening skills," the 57- year-old chief executive says. "You have to recognize, understand, and be tolerant of the concerns of all constituencies." So on his first day at Cott, Weise announced that he would spend his first 90 days meeting with employees, customers, investors, and others to develop a plan. "You can't turn a troubled situation around by yourself," he notes.
The listening apparently helped. In July the company reported its 10th consecutive profitable quarter, and Cott's shares have more than doubled in the three years that Weise has been CEO, outperforming the market and its peers.
Another key to his success at Cott, notes Weise, is that he had had a chance to run Campbell's bakery and confectionery division after serving as CFO. "I can't see taking a CFO directly to CEO," he says. "You need a stepping-stone to understand how a business operates and to lead people from multiple disciplines." Another key success factor: Weise hired as his CFO at Cott the person who had been his finance chief when he was in charge of the Campbell's division. "He was a known quantity," says Weise, "and I could let the leash go."
RALPH W. DUNHAM
Mystic Financial Inc.
The ice cream social Ralph Dunham organized in early July served a dual purpose. For one, it marked his promotion from CFO to CEO of Mystic Financial, a community bank with five branches and nearly 100 employees in suburban Boston. At the same time, it functioned as a key indicator of the type of leader he hopes to be. "I wanted to give people a chance to meet me as CEO, not CFO," he explains, "but I also wanted to establish lines of communication among employees and promote a more casual culture."
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