With nearly a fifth of all FTSE 100 CEOs in 2018 holding an accounting qualification and half having some form of background in finance, the trend towards appointing CFOs to CEO is a growing one. With CFOs having a much greater say in strategic direction when financial issues are particularly central to strategy, e.g. during turnarounds, transformations, increased governance, or M&A-oriented growth programs, it is likely that the fallout of Brexit and the likely resulting downturn will see even more CFOs taking the top spot.
Rutherford Cross recently welcomed Ron Robson, a Managing Director at Tavistock Group and a qualified accountant, to share his story of making the move from CFO to CEO. You can read some of the highlights of this insightful board room lunch discussion below.
Ron Robson took an alternative route to a career in finance, spending four years in the Merchant Navy sailing the world before returning to the UK to study accountancy at University, and afterwards completing his training with Arthur Andersen.
Ron made the move into industry relatively early on in his career in finance and describes his career path as ‘fairly typical’ before reaching the position of CFO. He cemented his CFO experience with stints with a number of organisations including some private equity backed businesses, working across sectors including leisure, logistics, retail, communications, tech and property.
Ron took the role of Managing Director in Tavistock Group in 2009. The Group is a family investment house which has a number of MDs managing investments in different geographies. At Tavistock, Ron has run various businesses and been responsible for some major projects, as well as being CFO then CEO of their European property business. For the last four years, Ron was CEO of Ultimate Finance, a Bristol based IF business.
Whilst Ron concedes that his journey to CEO did not follow a specific plan, he understands that the evolution of the CFO role into a wider, more business focused position has played its part. Understandably, a board will want any CEO to have a good grip of the financials, so being CFO can be a good grounding for the role of CEO, but Ron highlighted that this on its own is not enough.
A CFO is a member of the senior team, and is often the CEO’s right hand, but the CEO is the leader of the team, and that is a huge difference. In fact, Ron highlighted that in his experience, it was much more of a difference than seemed from the CFO chair.
CFOs are the finance experts, providing valuable input to decision making, but they are usually a part of the process. The CEO takes input from all areas of the business, including areas where they have no experience or expertise, and is the start and end of the process.
How can you prepare for this experience? How can you understand sales, marketing, product, operations, risk and compliance, IT……?
Ron’s simple answer is you cannot understand all those areas to the extent necessary. The CEO’s role is about setting the Vision, instilling and nurturing the right culture, building an experienced team, then developing and encouraging people to deliver that Vision within the culture.
In fact, the key step change from CFO to CEO that Ron identified is to lead, not to do – not always easy for the highly trained finance professional who is used to ‘getting things done’. It requires a much greater emphasis on softer people skills than a typical CFO background gives, and for most, will need to be worked at.
Ron shared his key recommendations for success as a CEO:
- Overcome the Stereotype – CFOs can and do make great CEOs, but they need to push hard against the stereotype of being (only) great finance people
- Challenge your Mindset – you need to develop the optimistic, creative side of your personality
- Get Comfortable Being Uncomfortable – accept that you have to make decisions (or go along with them) that are out with your comfort zone
- Learn to Communicate (again) – no matter how good you think you are at communicating, it can be improved and is crucial in being a great CEO
- Get a Coach or Mentor – its lonely being CEO and you need a support structure to perform at your peak
- You Have to Want it – being CEO means you are ultimately responsible for everything, but if you can deal with that, it’s also great fun!
Ron is a Managing Director in Tavistock Group, Chairman of Avenue Insurance Partners, Deputy Chairman of Mitchells and Butlers plc and a Non-Executive Director of Tottenham Hotspur Football Club Limited. Previously he held a number of senior finance roles including Chief Financial Officer of Tamar Capital Partners, Group Finance Director of Kenmore and Group Finance Director of The Belhaven Group plc. Ron is originally from Keith in Moray and trained as a Chartered Accountant with Arthur Andersen in Edinburgh.