This is part two of a two-part series. Click here to read the first part.
It’s easy to imagine the traits that characterize successful financial executives at service firms—and why those same qualities might become a liability when it comes to even being considered for the position of CEO.
In a recent study conducted by global recruiter Russell Reynolds Associates, Inside the Mind of the CFO, finance leaders scored from 11-13% higher than CEOs when it came to being more cautious, acting more conventionally, and following rules. Such inclinations are hardly the attributes boards are seeking out in a fast-moving economy, where staying competitive demands fast, decisive and creative-thinking leaders. In fact, when it comes to leadership, the study found that CFOs lag CEOs in such key areas as enjoying selling or appreciating being the center of attention.
The rise of former CFO Dennis Arriola, however, doesn’t contradict the study’s findings. Arriola, who serves as CEO of SoCalGas, the nation’s largest natural gas distributor, contends that CFOs who aspire to be the boss need to view their careers in that context. “It becomes part of your career journey to collect the different tools you’ll need,” he says. “I picked up what I needed to know—manufacturing, customers, regulation, international and employees—here and there. I had broader experience than closing the books.”
Here are some of the steps he advises ambitious CFOs to take:
- Invite Yourself to Meetings You Want to Attend. As CFO, Arriola wasn’t invited to summits about such operational decisions as whether to expand manufacturing capacity. He showed up, anyway. Other times, he was brought in strictly for the purpose of providing financial insight. In both situations, he brought his broader experience to bear, drawing on his financial acumen and also on what he had learned while serving as regional president and general manager of parent company Sempra Energy’s South American operations. Companies “need to have a diversity of people who have different expertise and have had different life experiences,” says Arriola. “CFOs can get so silo-ed.”
- Be an advocate for growth. A CFO’s primary job may be to identify risk, but that shouldn’t prevent you from helping grow the business. “Be an advocate for where the business ought to go,” says Arriola. “People think about CFOs, and they think about the person who is closing the books, and working with numbers about past performance.” By showing that you are thinking about the future, you are acquiring the mindset of a CEO whose job, Arriola says, “is to dream—and to inspire others to dream.”
- Become a partner with C-suite peers. Successful CFOs are much more than single-minded numbers jockeys. “The CFO today is an equal partner with the COO, general counsel and head of HR,” says Arriola. “It’s become a job where you have to relate more to people.” Foremost among them, of course, is the CEO. “The partnership with the CEO can be challenging because the CEO wants to continue to grow and invest and, as CFO, you have to be the realist and be the one who says, ‘we don’t have the money today.’ It’s about finding a balance.” Now that he’s on the other side of that relationship, he values having been a CFO that much more. “What makes it effective and fun is that the CFO and I can have discussions on a deeper level on the financial side,” Arriola says. “He knows I understand and that I don’t want to undermine or second-guess him. There’s a trust that comes from knowing I was formerly a CFO.”