Financial acumen is no guarantee of success as a CEO, according to a top leadership advisor.
A new report by Robert Half UK reveals that 67 per cent of newly appointed FTSE100 CEOs have a financial background and in total 49 per cent have come through that route – compared to just 31 per cent three years ago.
However, Niamh O’Keeffe, MD of leadership performance acceleration company First100 says that while promoting an FD to CEO may seem like a “safe bet”, it is no certainty of success.
Niamh, whose company works with CEOs and other senior executives to put in place first 100 day plans upon assuming a new role in an organisation, said: “It has almost become an accepted fact that good FDs are best placed to make good CEOs because of their financial skill set.
“While a strong grasp of numbers is undoubtedly important, the reality is that a great or even good CEO will need an awful lot more skills to achieve success in the top job.
“CEO leadership is about setting a clear direction and bringing people with you in order to get the right financial results. FDs may wield power in the sense that they understand the business model inside out, but this does not mean that they can set out a clear vision for the whole company or know how to serve the needs of its customers in an ever shifting market-place.
“Unfortunately, the FD-becomes-CEO model can make for a very limited approach to the wider leadership challenge, in particular because FDs are risk averse and may be ill-suited to fast decision making or capitalising on growth opportunities and innovation. They are also not always known for their charisma and inter-personal skills!
“We work with CEOs and other senior executives in global organisations helping them create and execute first 100 day plans which encompass many different facets of leadership.
“There are many skill sets beyond a strong grasp of numbers that CEOs will need including the ability to forge a vision for their organisation, an understanding of their market challenges, the talent to build and motivate a great team and managing a business often with tens of thousands of employees.”
Niamh added that long-serving CEOs such as Dame Marjorie Scardino of Pearson and Sir Martin Sorrell of WPP were an increasingly rare breed.
Niamh, who is based in London but works with clients in the US and Europe, said: “The demands on incoming CEOs has never been greater. Whereas a few years ago, you might be asked for ten or five year plans, today’s stakeholders and investors want to know what results you are going to deliver in your first few months.
“Today’s CEOs have never faced such immense pressures which mean the range of skills required to manage their organisation and its stakeholders has never been greater.”
First100’s clients include Accenture, Vodafone, Telefonica 02, John West Foods, Sun Life, Merck and AppSense.
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