Which role, CFO or COO better prepares an executive to be CEO?

In a recent survey of senior executives, we sought to find out what experience is best for the CEO position, a CFO or a COO? Read the following 6 key elements a CEO must possess:

1. A Sales and Marketing background is essential for a CEO.

Harold Torninger, CEO at Sight Executive Group, stated, “In my experience the CEO position is best prepared from individuals who have a Product Marketing and Sales and Marketing track record. They have demonstrated a strong Customer focus and also an ability to handle the whole Supplychain.”

Related article: Executive Recruitment for Sales and Marketing Executive Positions.ceo cfo coo

2. CEO’s must have a strong grasp of Finance and Accounting

Ed Galatai, currently working as both the CFO and COO, recognizes that favoring sales and marketing backgrounds is a prevalent trend that is only now beginning to change, “I continue to see the overwhelming focus on the Sales/Marketing side as a precursor to the CEO spot. However, I think more and more companies look to the CFO to move into that role. Today's CFO role is that of a true business partner involved with not just Finance and Accounting, but of the strategy and business development of the company as a whole.”

Related article: Executive Search and the CFO role.

3. The executives job title (CIO, CFO, COO, CMO) is not as important as a well-rounded skill set.

Aman Khan, Vice-President at Star Alliance, highlights the danger of over-specification, stating that “If [CFO or COO] operate in their classic roles, [they] may not be appropriate for CEO because both have a very specific focus.” Returning to Ed Galatai’s comments earlier, this problem is reduced when the C-suite executives under the CEO are encouraged to become involved in all areas of the companies management in a partner-like role.

4. Management AND leadership

Mike Hart, COO at Bolder BioTechnology, Inc, takes this point further by focusing less upon the specific title, “Regardless of C-suite experience one also needs to be considered a leader with excellent management skills to make the transition.”

Related Article: 12 Key Elements of a Successful Leader

5. Soft skills are the differentiators

Marilyn Dunbar, Principle at Ray & Berndston (as do many other commenter’s), agrees with this sentiment, “I believe that any of the roles mentioned would work - supported by expertise in complementary areas. The differentiator might be around soft skills - leadership, change management, ability to build relationships, etc.” This view, dominates the discussion, and is one that I am at most at affinity with. Having C-Suite experience is essential but what will differentiate you from other executives are relationship-building, people management and leadership skills.

Related Article: What executive recruiters look for in senior executive candidates.

6. Requirements for a CEO depends entirely on the company and its current position.

Al Walsh, CEO, believes that there is flexibility in the appropriate candidate for CEO positions and that every CEO must know all areas of the business, “A CEO should have knowledge in both areas, as I did before assuming CEO responsibilities. But, given a choice of one I'd say CFO. The CFO position is usually better for preparing the candidate to perform the strategic thinking that's are required in the CEO chair.” Al Walsh believes CFO’s are generally better prepared, however, many senior executives participating in the discussion believe this judgment is impossible. Instead, they highlight that each company looks for different qualities at any given time:

Eduardo Schumann - Interim Executive, Turnaround and Restructuring Consultant, “I believe it depends on the company. In companies with large debt, the CFO tends to be more important in a succession line. In a consumer goods company, would be the CMO. In a B2B company may be either operations or sales. In any case, a strong leadership and knowledge of the products and the clients are extremely important.”

Related Article: Executive Search and the CEO Position.

Key additional respondants:

Andrew Ive - Senior Director, Model N Inc.

“The text book approach would point towards COO but I would suggest its dependent on the individual concerned and the challenges and opportunities the business is facing.”

Amit Sen - Experienced Management Consulting Executive

“I guess what the company needs and the board looking for. If the company is in need of e CEO in the mold of Mike Hurd, CEO of HP: you would look for someone coming from the role of a COO. But on the other hand a Carly Fiorina style CEO might be more appropriate. In that case you have to emphasize Sales/Marketing side. So the point I am making is that a lot will depend on the company needs at that particular time and if he or she brings the necessary soft skills. Everything else is academic.”

Nikhilesh Mathur - General Manager-Data and Research at MRI China Group / Tal-os Asia

“The question around selecting a CEO would depend on a number of factors including the line of business, challenges being faced, key short and long term strategies for future growth, capabilities of the individual etc.”


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