Finance professionals sometimes have difficulty making the transition to broader leadership roles. There are five critical changes they need to navigate to succeed.
A few years ago, the chief financial officer of a large company told me that he estimated that his organization had only about a 30% success rate when promoting finance people to leadership roles in or across business units. The CFO wasn’t happy with that rate; he wanted a better pipeline of executives with a finance background, because the company’s business model and strategic choices required leaders to be well versed in finance.
That conversation prompted me to explore — through a combination of interviews, a survey of 35 finance professionals, and a literature review — the question of whether leadership development is different for people from finance backgrounds. In the process, I identified five critical transitions that finance professionals need to navigate when taking on a broader role in an organization.
Transition 1: From Expert to Leveraging Expertise
Finance professionals pride themselves on their expertise. As Colin Pavlovich, executive general manager of group accounting, assurance, and risk at Wesfarmers Ltd., a conglomerate based in Perth, Australia, said:
When I came into a senior leadership role, in the first six months I had to get used to just having to let go … that you’re not in a technical role day to day with a set agenda, that you’re a professional manager and need to step away from being the expert to [being] a leader in strategy development and execution.
Transitioning out of being the expert can be challenging. It is how your worth was evaluated early in your career and is often the basis by which you got promoted. However, finance professionals are able to leverage their expertise directly in leadership roles, since budgets, strategic direction, and business metrics are all communicated in financial terms. So finance people need to realize that the transition to leadership does not mean a loss of expertise but rather an opportunity to leverage the skills they have honed in a much more valued way. As Terry Bowen, finance director of Wesfarmers, explained, finance professionals “already have the language of business, which they can uniquely use in day-to-day leadership.”
Transition 2: From Apprenticeship to Coaching
The finance profession, especially accounting, has in many ways involved a white-collar apprenticeship model.