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CFOs-Turned-CEOs: The View from the Other Side of the Desk

So what's it like being a CEO? These former CFOs know.
Stephen BarrSeptember 27, 2001

So 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:


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.”


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.”


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.”

Not that the 45-year-old chief executive isn’t serious. Hired as CFO to improve the budgeting process and strengthen internal controls, Dunham was deeply involved in operations as the bank quadrupled its asset base and got into commercial lending. He also earned his law degree at night. “But I always had an eye toward the corner office,” he admits, adding that during his 13 years as CFO, he was anything but a “stereotypical number cruncher.”

The transition to CEO, he has found, offers two related yet contradictory challenges. On one hand, he must wean the finance staff from relying on him for the support he provided as CFO. “It’s easy to revert to old roles,” he notes. On the other hand, he must deal with the new reserve with which people now relate to him. “People seem to be more careful about how they approach me, because now I have the final word. But I want them to know that I’m still the same guy, just with different responsibilities.”

As for the ice cream social, after Dunham said a few words, he had two helpings with all the fixings — and a cherry on top.


Baxter International Inc.

As Baxter International CFO from 1993 to 1997, Harry Kraemer reveled in the hours he could devote to analyzing a big capital expenditure or a major acquisition. “I loved to dig through the numbers, challenge the assumptions, and play with my calculator,” he says. But as CEO, he rarely spends more than 30 minutes on any activity, except for the two days he spends preparing for the company’s quarterly earnings release.

Faced with such daunting demands on his time, it’s no wonder that one of Kraemer’s goals is for Baxter to be noted for its family- friendly programs. “The biggest challenge for me, as an individual, is to lead a balanced life where I am a leader of a company, a great father [of four children], and a socially conscious and aware citizen,” says the 46-year-old CEO.

This year, Baxter climbed to third among health-care companies in Fortune magazine’s list of most-admired companies, while its market capitalization has increased approximately 67 percent during Kraemer’s two-year tenure.

And though the CEO job is more hectic, he argues that the responsibilities are not all that different from those of the CFO. “If you see yourself as a financial person who ‘serves’ the organization, the transition will be monumental,” explains Kraemer. “But if you see yourself as someone with finance skills who provides leadership as part of a team that’s running the company, the move to the next level just involves a change in how you spend your time. This is more than a semantic difference.”


Ralph F. Hake (52) Maytag Fluor (since 1999)
Whirlpool (1998)

Spent 12 years in finance and operations at Whirlpool

David Gow (52) (since 1999)

Also ran the gift purveyor’s corporate sales division

Jim Offerdahl (44) Traq-wireless Pervasive Software, Tivoli Systems

Also held the COO title at Pervasive

Timothy Jenson (42) Merisel Merisel (since 1998)

Served as treasurer for five years before becoming CFO

C. Taylor Pickett (39) Omega Healthcare Investors Integrated Health Services Outsider; also served as president of an IHS subsidiary
Douglas R. Potter (50) Anika Therapeutics Anika (since 2000) Held on to CFO title after CEO resigned to be with family
Timothy H. Powers (53) Hubbell Hubbell (since 1998) Succeeded retiring CEO

Source: Hunt-Scanlon Advisors

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