CFOs Don’t Really Care About Technical Skills When It Comes to Who’s Replacing Them

Deloitte’s CFO Signals™ Survey 2Q 2024 is out and we were going to focus on how CFOs aren’t feeling very risky at the moment — only a little more than a quarter of them feel now is a good time to take risks — but instead we’re going to talk about succession matters because that’s probably more relevant to readers of Going Concern who aspire to one day fill their shoes.

Related post for anyone curious about the CFO path:

A Non-Exhaustive List of Reasons Why You Won’t Cut It as a CFO

For this survey, Deloitte got 200 CFOs across the United States, Canada, and Mexico to participate and the “vast majority” of these respondents work for companies with more than $1 billion in revenue. This quarter’s survey is 84 CFOs more than they got last quarter.

Talking strictly succession planning, 1 in 4 respondents say their companies don’t have a formal plan at all. So that’s something. And only 12 percent of CFOs say their company has a framework for succession planning. So a surprising number of large companies are flying by the seat of their pants on that one. Cheers, we support that way of life.

For those that are putting some brain power to succession planning, placing would-be successors in managerial training programs (43%), working with successors to create a developmental/transition plan (39%), and mentoring/coaching them on how to do the job (39%) are the top three things CFOs plan to do with their replacements.

As for what they’re looking for in those replacements, accounting and FP&A skills aren’t at the top of the list:

The skillset desired for CFO successors underscores the changing nature of the CFO role, as a plurality of CFOs (37%) view operational experience as one of the three most important factors in identifying potential replacements. That was followed by familiarity with new technologies (30%) and network leadership (30%). More traditional financial skills, like accounting (28%) and FP&A (24%), did not make the top three.

“Fifteen years ago, you might have gotten a very different order,” wrote Steve Gallucci, Deloitte’s US CFO Program National Managing Partner, in the survey’s introduction.

The full list in graphic form. Don’t try to do the math to get to 100 on these, CFOs could pick more than one.

Side note: We should all use the word “plurality” more.

As you can see from Deloitte’s chart, FP&A skills, respect from others in the company, familiarity with the industry, and strategic acumen all rank equally around a quarter.

Let’s not confuse this priority list with CFOs signaling accounting and FP&A skills barely matter to them. Rather, if you suck at network leadership but are a modeling savant, you’re going to lose out against someone whose FP&A talents are marginal but who excels (no pun) at communication.

One last data point from the survey answers the question “Why do sitting CFOs exit their jobs?”

We asked respondents to name their top three priorities when considering a career move. Somewhat unexpectedly, compensation/benefits did not top the list. It was the fourth most cited response (46%). Number 1: work/life balance (51%)

Is it really unexpected? Some of them make good money. The 75th percentile pulls in $400,000 a year according to ZipRecruiter data.

CFOs Say They Want Operational Experience and Familiarity With New Tech When Identifying Successors; GenAI Tops List of Internal Concerns: Deloitte CFO Signals™ Survey 2Q 2024 [PR Newswire]