WITHIN THE UK, the top performers in finance still provide the largest pool of potential candidates for promotion to MD, highlighting just how important the finance profession has become to businesses today. Recently there have been several high-profile appointments where FDs have been promoted to central leadership roles – including former Halfords FD Nick Wharton, who was recently appointed as the chief executive of the Dunelm Group; and Ian Dyson, former Group FD at Marks & Spencers, who is now CEO of Punch Taverns.
Why FDs often make good candidates for MDs
The role of the FD has broadened considerably over the last couple of years, creating a wealth of possibilities for successful professionals who can lead with solutions to organisational strategies and work with the MD and the board, rather than simply overseeing the numbers.
FDs have been in the spotlight over the last two years as their role became even more critical during the downturn. Most are now working to execute strategies and make changes across various business functions to ensure the organisation remains profitable. Many professionals managed to deliver results even though they were under immense pressure, helping to highlight their leadership capabilities. Throughout the economic crisis many FDs have become more prominent members of the board, demonstrating objectivity and asking difficult questions in a bid to ensure business success.
Strong FDs have the ability to inspire employees by focusing on areas such as employee engagement, not only within the finance function, but across the entire organisation. This creates an opportunity for them to make an impact on the numbers and also on the company’s bottom line. Individuals, who have shone throughout the tough economic climate and have grasped the opportunity to take more of a central leadership role are those who will be able to cross over into MD territory.
The skills required
For the group of FDs who have the appetite to become an MD, it is crucial to gain an in-depth insight into what is going on across the organisation and develop a strong working relationship with all key business heads and those at the very top.
When an MD position becomes available it needs to go to someone who has a solid track record of supporting the board, who has a relatively high level profile and who is in a strong position of trust. Many FDs have to report to the board as part of their role and therefore have already built good relationships with key stakeholders, making them a strong successor and a likely candidate.
Successful FDs will already be working towards safeguarding the company for the long-term, engaging with a tremendous variety of stakeholders across the business, working closely with both the senior business leaders and staff at the coal-face. This requires them to have skills which will also be needed in the role of MD, such as leadership and communication skills, a high degree of self-motivation and drive, combined with the ability to work under pressure and deliver to demanding deadlines.
A large number of MDs attribute their success to the strong teams they have around them and luck, as identified in Jim Collins’ book ‘Good to Great’. Collins names the key traits of the top echelon of leaders as calm determination, inspiring high standards, ambition for the company and not for his or her self, unwavering resolve to deliver long-term sustainable results, taking responsibility for failures and setting up successors for greater success. It is these leadership skills aspiring MDs need to develop.
Making the move
In order to make the move, you need to be looking for ways to work with the organisation on a broader basis, rather than focusing solely on numbers. Look to support the MD, non-executives and other stakeholders in a variety of ways, such as one-to-one counsel, providing market knowledge and being solutions-driven. Acting as an adviser and a confidential ear to the MD, providing strategic advice and bringing a sense of reality in terms of what is needed to succeed will ensure you are seen as adding value.
This type of move is more common internally, as the board and businesses generally are more inclined to promote someone they are familiar with and trust. Therefore it is important to put the time aside to get to know the senior team and to increase your own profile both internally and externally. If you are considering an external move it is important to network and develop your profile, building your personal brand through good PR. Think about the additional responsibilities that make you stand out. For example, have you implemented business-wide initiatives that have not only impacted the financial results but other areas of the business such as sales and marketing?
Over the last couple of years, the economic landscape has reduced the number of opportunities for new MDs, as there was less movement of individuals during the recession and organisations became more risk adverse, opting to take someone who has already had exposure to the role. But the downturn has also given professionals the opportunity to excel, ensuring the company survives despite the tough economic climate. Make sure you continue to shine, as more opportunities will arise as the market continues to grow and organisations start to recruit based on talent, rather than simply focusing on experience.
Internal versus external
At this level of appointment, it is not uncommon for companies to bring in an external recruiting expert to benchmark internal candidates against external ones, so make sure you are prepared if you do want to put yourself forward. Although you may feel you understand the job description, ensure that you have covered off all aspects, including tasks and responsibilities, so that you are able to communicate why you are the best candidate for the role and talk confidently about your relevant experience. The employer’s aim is to make the best possible appointment for the company, so make sure you are in a position to prove that you will be able to drive it forward both for the short and long-term.
Typically, the move from FD to MD is one of the most straightforward routes in succession planning. However, to be successful you will need to quickly establish your new responsibilities within the role, distancing yourself from finance. In order to do this you will need to ensure that you have your own succession plan in place, so that someone is ready to step into the FD position.
If don’t get the role when making an internal application ensure you get feedback as this will help to strengthen your current post and position. It is also important to see if your company is open to the move in the long-term. If not, speak to your industry contacts and make sure you work with an expert recruiter who operates at this level and understands your goals and aspirations. If no options arise in your company, think about taking on a broader role such as chief operating officer or a commercial director role to expand your experience. It may also be advisable to look at moving into a chief financial officer role at another organisation before trying to become an MD.
Making an impact
When stepping into this role, don’t be over keen to make a sudden impact, starting a new job is a challenge for most people, especially when you are going in at such a senior level. Within the first few months you will have to adjust to your new role while at the same time influencing your senior management team and ensuring that you create a positive working environment. If it is an internal move, start by communicating your appointment quickly and highlighting changes of responsibility so that you can concentrate on the new role. There are various strategies to help achieve this, for example, leadership roadshows across the organisation. It is also crucial to get together with your senior management team on a one-to-one basis to understand their objectives and challenges.
Make sure you are doing all you can to engage with your new stakeholders, as this will increase your chances of making an impact on the business and long-term success.
Chris McCarthy is director at recruiters Hays Senior Finance
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