In this blog I provide advice on how to progress from ACA newly qualified to CFO. This is targeted at people who are ACA newly qualified from a traditional audit practice background, as opposed to those coming from corporate finance, TS, or banking.
Like a Jamie Oliver 30min meal, this blog is about speed, not presentation! It is an ACA career in an “ideal world” where nothing goes wrong, and you can pick and choose what roles you move between. This is just one possible route. It is the path I believe most likely to succeed for an ACA coming from practice.
The 6 steps between ACA qualification and your first CFO role:
Once you become ACA qualified there are an enormous array of career options, and racing to the top does not need to be your driving force. However, for some, the lure of shooting for the stars is too hard to resist. For these people, this advice is for you!
Step 1 – Get a role in commerce, ideally a Group Accounting, Group Finance Manager or even Controller position.
The sooner you move into commerce and industry the better. While extra time in practice further develops your technical skills learnt through gaining your ACA qualification, it does not add anywhere near as much experience as your first role in commerce.
Forget commercial roles for now. Very few CFO’s have not held a group accounting position. While a move immediately into commercial finance will feel like a fast track, in the long term it will delay your CFO ambitions. You will need to take a step back into technical finance later in your career, which is considerably harder to do.
Team management is a must. The sooner you are managing a team in commerce, the sooner you will climb the ladder.
When it comes to size of business, the rule is simple; only work for businesses bigger than the ones you want to ultimately to be the CFO of. For example, don’t join a FTSE 250 if you hope to become a FTSE 30 CFO.
Step 2 – Move into FP&A (within the same business, sector or related sector)
FP&A will be a stepping stone role into your first truly commercial role. FP&A is a crucial area to build analytical skills and business knowledge. It will also give you your first exposure to non finance, and to supporting business decisions.
For this move, you don’t need to stay in the same business, but you do need to stay in broadly the same sector. As you rocket up the ladder, at some point you will lead people with far more experience than you. The more specialist market knowledge you have, the easier this will be.
Step 3 – Move into commercial finance (again, within the same sector, and still managing a team)
Right, you are starting to build a very strong CV. Now you need to demonstrate that you can work with non finance; MD’s, Operations, Sales and Marketing. If you haven’t already, it’s time to fly the group finance nest! Non finance are a different breed of people. They talk and think differently, and you need to be able to tune into their world to become an effective and forward thinking CFO.
Warning! Don’t fall into the trap of taking another FP&A role but with a different title. You need to gain genuine commercial experience, such as bid support, NPD, customer negotiations, pricing, investment appraisal, etc. Some FP&A roles cover these areas, but usually as only a small percentage of the overall role.
Step 4 – Play outside your sandbox
Future CEO’s searching for a finance partner won’t care about your ability to reduce month end. Yes they will want a CFO who can make finance more efficient, but mainly they will want someone who can add commercial and strategic value to the business, whilst also managing risk, external stakeholders and statutory obligations. To prove you can add value above and beyond finance, you need to pick up a project that is outside your formal job brief.
Remember: The best CFO’s are business leaders who just happen to specialise in finance. You need to “play in other peoples sandboxes” and become a rounded business leader.
Step 5 – Move into your first senior role
Whether it is as a Business Unit FD, Group FC, Head of Finance, Head of Reporting, FP&A Director etc, you need to obtain your first senior role. And by senior, I mean the top 1% of decision makers in your business. In a FTSE 100, this is usually in the top 200 of senior managers (sounds a lot, but only about 10 – 15 will be finance). If you want to become a CFO in the next 5 years, don’t take any role that does not fill this requirement.
Step 6 – Back to group
If you haven’t already, you now need to move back into group. But this time, and for the first time in your career, you are targeting niche roles. In an ideal world, you would gain exposure to investor relations, a key skill for a new CFO. Failing this, you should target a niche discipline that is important for your sector. For example, if your sector is heavily reliant on debt for investment, experience of leading treasury would be a possible next move. Alternatively, if your business is expanding, your sector consolidating, or a change of ownership is likely, M&A would be a useful next step.
Step 7 – Bask in the glory of your new CFO role
If you follow the above steps, you are guaranteed to become a CFO. Ok, obviously that is not true. The actual process of moving from Director to CFO is entirely dependent on time and place. You need to be in favour with the right people, and will have been “marked out” for years in advance as a high flyer. You will need a mentor, multiple sponsors across the business, and ultimately you need someone to retire, leave, be promoted, or fired. There are no guarantees. However, you will have given yourself the best possible shot. Your broad experience, coupled with some specific niche sector and skill experience, will put you in the frame. You are also in a strong position to be headhunted, as your sector specialism will put you on the radar of head-hunters who are usually restricted to narrow sector briefs.
If you are an ACA looking for your next step, email me - I am very happy to help. I can also put you in contact with our ACA specialist Thames Valley and ACA specialist London teams.