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More finance executives are moving into general management. The transition isn't always easy.
Jason Karaian, CFO Europe Magazine
February 2, 2009
"I wasn't planning to stay in finance forever." In April last year, Laurent Matras made good on his plan, moving from his post as UK finance director of insurer AXA to UK managing director at Groupama, a rival insurer. Though he describes the expansion of his responsibilities as "what I always wanted," the transition was not without difficulties. At first, "the breadth and depth of the job was quite daunting," he says.
As companies turn to their CFOs to steer them through the downturn, Matras and others are finding themselves in high demand outside finance. "There are few roles as well placed to understand every bit of a business as finance," says Tony Osude, head of professional development at the Association of Chartered Certified Accountants. "It's no surprise that we are seeing gifted finance people move into broader management roles."
The most common first step out of finance is to take over a regional division or product business unit. Recent examples include Andrew Higginson, who went from finance director to head of retailing services at Tesco in July, and Hanif Lalani, who stepped over from CFO to head of global services at BT in October.
For those who make a name for themselves in these divisional posts, a group chief executive role often follows. For example, Olli-Pekka Kallasvuo at Nokia was CFO for more than ten years and then took over as general manager of the group's mobile phone unit. Shortly thereafter he was appointed president and COO before rising to CEO in 2006. Then there's Paul Polman, who was promoted from CFO to head of the Americas unit at Nestlé in February last year. At the start of this year, he took over as CEO of Unilever, the first external candidate to win that role at the Anglo-Dutch consumer goods firm.
Meet and Greet
Though companies value the financial savvy that these new hires bring to operations, especially in cost-conscious times like today, CFOs making the move say they find that getting to grips with sales, marketing and the like requires "a humble attitude," as Matras of Groupama puts it. For him, sales and customer service was largely alien territory. To get up to speed, he has been spending a lot of time out at the company's five operations sites. "I know it's a cliché," he admits, "but meeting people face-to-face is invaluable."
It does take time to understand the specific processes and motivations of the people who work in an operational unit. "If you are humble enough to say that you are coming to them because you don't understand what they do, and admit that it is impossible to learn in just a few days, people react positively," Matras says. "They see what you can add in terms of looking at processes with a finance mindset." In the customer-service department, for example, he sees some similarities with the large credit-control department he ran in his previous finance job.
At Sperian, a French manufacturer of safety equipment, Brice de La Morandière has found his financial acumen useful in a wide variety of areas. It began in 2001, when the CFO helped push through a major merger, an exercise that marked a "turning point" in his career, he says. "The difficulty of making that merger happen taught me that success comes not only from finance, but also from getting the most out of people." Although of course the financials had to add up, the enlarged group would succeed only if managers "rallied people around a cause and stoked their enthusiasm," says de La Morandière. Since then, "I wanted to broaden my horizons."
In 2006, after nearly ten years as CFO, he added responsibility for the group's body protection unit. "At first, I saw the move as an opportunity to test my abilities outside of finance," he says. "But after a while, the CEO explained that he saw me as his successor." In August last year, de La Morandière was named Sperian's COO, an appointment that the company announced was part of a final stage of CEO succession planning.
In taking on responsibilities outside finance, the former CFO says that he needed to convince three sets of stakeholders that he was prepared to make the leap. The easiest to convince were the CEO and his fellow directors, who were already familiar with de La Morandière from his participation in board meetings. Colleagues of an equal seniority were trickier, as "you become the boss of your teammates," he says. It took a few months and some "off-the-record conversations" to get this constituency on board. The final group — subordinates comprising the bulk of Sperian's 6,500 employees — presented de La Morandière with his biggest challenge. "When you are close to someone, you are able to show that you are not just a CFO," he says. "For those that may see you very rarely, you will be the CFO for some time."
To convince them otherwise, de La Morandière turned to formal management training, opting for the philosophical over the technical. The Challenge of Leadership programme at Insead business school helps senior participants improve their understanding of "the emotional side of decision making." De La Morandière found it a useful forum for honing his leadership skills. "It's difficult to motivate people on financial goals alone," he says. Like Matras at Groupama, he has been spending a lot of time on the road meeting employees, clients and suppliers he didn't come in contact with as CFO, to explain his vision for the future.
Call of Duty
Martin Lindqvist is also charting a new career course beyond finance at SSAB, a Swedish steel company, where he was appointed head of the strip-products division in August, after seven years as group CFO.
"One day our CEO called me and asked if I wanted to take responsibility for our biggest division," he recalls. Having spent his entire career up until then in finance, he admits that he hadn't given much thought to becoming a general manager. But given the opportunity to "go from being a bit of a spectator to playing on the centre field," as he puts it, he accepted the challenge.
One of his first steps was to build a new management team. Mixing new recruits with existing staff, Lindqvist picked "skilled people who I like to work with and who could support me, especially in areas such as production and marketing." His perspective of the business from being CFO gave him a good sense of which managers he worked well with, while a previous stint in charge of finance at the division he now runs gave him insight into its particular demands. "I knew pretty much what to expect," he says. There was "never a big danger" of him being pigeonholed as strictly a finance person.
Lindqvist has straightforward advice for finance executives considering a similar move. "If you get the opportunity, take it," he says. "From what I've seen so far, I could have done this earlier." If others follow his advice — and it appears that many finance chiefs will soon get their chance — it requires, to a certain extent, turning their backs on a profession that helped make their name.
When Matras was being interviewed by Groupama, he was asked whether he would find it difficult not to fixate on finance, even though this would be only one of his many responsibilities as managing director. "I understood their concern, but I figured that I would have so much on my plate that the last thing I would want to do is keep focusing on financial issues," he says. Today, in his dealings with the finance function, "I have proven that I am happy to contribute when they ask for my opinion," he notes. "But it's their job."
Jason Karaian is deputy editor of CFO Europe.