The Strategic CFO Lessons Learned from the CFOs of Leading Technology and Communications Companies December 2018
The role of the CFO is changing The pace of technological change is accelerating New strategies and operating structures are emerging Gaining insights from data has become key for market success Companies are becoming more diverse CFOs now must possess skills and experience beyond the basic finance function 3
KPMG has build a unique fact base to track CFO careers How is the career path to CFO evolving over time? What skills/experience do successful CFOs have? Where do CFOs go next after being CFO? 100 Companies CFOs 170+ $2T Revenue Years experience 500 6M Employees Data points 7000 4
The career paths of modern CFOs are anything but linear New CFO Mostly Finance Accounting & Controllers FP&A Corporate Finance 22% 2% 5% 37% Other 7% 98 CFOs 19% 28% Prior CFO within technology and communications 8% Prior CFO Prior CFO from another sector 36% 9% Bankers and Investors Source: KPMG CFO Success Database; based on last 3 roles Other 7% 5% Strategists 6% COOs 8% Business Leaders New CFO Mostly Non-Finance 5
Current CFOs differ from their predecessors Current CFOs Former CFOs Better educated % with MBA 44 55 More strategic % with strategy experience 24 40 More operational % with operating experience 20 36 Less internal experience % internal promotions 21 42 More diverse % women 9 16 Source: KPMG CFO Success Database 6
Operational and internal experience are key to succeed as a CFO What is CFO outperformance? Outperformance chance by type of experience 59 Factors correlated to outperformance 32 Company stock failed to outperform the NASDAQ during CFO tenure Operating Experience Internal Candidate 3 24 Prior CFO Experience Full dataset CFOs that were fired or resigned to take smaller roles within first 5 years Outperformers Strategy Experience MBA Degree Source: KPMG CFO Success Database 7
Where do CFOs go next? Next Job for Former CFOs Percent 71 former CFOs Source: KPMG CFO Success Database 8
Are you a strategic CFO? 1 Which technology trends will have the biggest potential impact to your P&L in the next fiscal year? 2 Are you actively involved up-front in strategy formulation with your CEO and chief strategy officer? 3 Have you provided clear financial goals and requirements for what the strategy must deliver? 4 What share of your total investments is allocated to run the business versus transform the business? Questions 5 How are your transformation initiatives performing versus plan since last quarter? 6 Are your strategic, financial, and operational planning closely aligned, and frequently refreshed? 9
A discussion with two leading CFOs Francois Delepine CFO, Venafi Roger Shannon CFO and SVP Finance, ADTRAN 10
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