The Myth Of Becoming A CEO Via The Accountant Route
We’ve all heard that Accountancy is supposedly a great launching pad to the CEO role. In fact, like me, you probably even mentioned that in your most recent job interview.
But is it actually true?
Well, apparently yes. According to UK recruitment firm Robert Half, almost one in four (23%) FTSE 100 CEOs are Chartered Accountants and 55% of all UK CEOs come from a finance background.
But the next question that nobody seems to be asking is: What happens once you join the rank and file of an Accountancy company?
Are we meant to just chug along and, eventually, someone will call to ask if we’re interested in replacing Travis Kalanik as the CEO of Uber?
If you stay solely within Accounting, it can take a painful amount of time to try and work your way up within a company.
You’d need to wrangle your way through the Finance function hierarchy … probably starting with several Junior positions, then becoming a Financial Controller (or equivalent), then once you’re ready … Finance Director (if you’re able to shift the existing 50-60 year old FD who is currently leading a comfortable life with a wife, kids & mortgage to pay for).
Once you’re FD, you’ll then have to wait until the CFO position frees up (likely involving another said 50-60 year old with an even more comfortable life, wife, kids & bigger mortgage to pay for).
And once you’re CFO, the hard work doesn’t stop there!
You’ll have to wait for the CEO to get fired / retire until the position is yours! Unless, of course, the Board decides to hire an external candidate…
Who has time to spend 20+ years on this crap?! We’re Millennials … we need want everything now, not in 20 years =)
The reason the Accounting route takes such a long time is partly because it is so competitive.
But for the most part it’s due to the fact that … (and no one within the Finance team will tell you this) … it’s difficult to create substantial value for a business (or yourself) by sitting at the back of the office making a financial record of what happened in the past.
Of course there are many small ways Accountants add value every day, but opportunities are rare for you to significantly improve margins and get heavily rewarded for it.
For argument’s sake, let’s say you did spot a loop hole that nobody else had noticed and you saved your company £millions in tax. Perhaps you managed to get a large cost-cutting initiative approved by your seniors. That still doesn’t make for CEO material.
Companies do need CEOs who understand the financial impact of business decisions and can execute business efficiently and effectively, but more importantly, they need CEOs who can develop strategy and lead the business through turmoil & change.
Ultimately, it’s near impossible to prove your capabilities in this respect without having substantial exposure to the strategic workings of the business, running a team and / or having commercial ownership of your own product / service line.
When I worked in the Oil & Gas industry, prior to getting promoted into Senior Exec positions, the high-performing Engineers would simply be sent on a Corporate Finance course for a week.
This was enough finance knowledge for them to make decisions when leading fast-paced global teams with billion-dollar budgets. You can recruit your own Finance Team and hire an external Accountancy firm.
This also raises another key point … unless you want to become CEO of an Accountancy firm, technical Accounting knowledge is not a strong enough, nor sustainable, competitive advantage.
Heidrick & Struggles found that 30% of Fortune 500 CEOs did indeed spend the first few years of their careers developing a strong foundation in finance. Awesome.
However, only about 5% of those were promoted directly from the role of CFO, yet more than 50% were appointed CEO from the role of COO (or equivalent).
And so it seems, CEOs and other Senior Executives may often begin their careers within Accounting & Finance, but those who tend to make it to the top successfully use their financial expertise only as an initial step to becoming excellent leaders in other fields.
This would help explain why Corporate Finance, Transaction Services & Advisory may not be the best exit routes from Accounting.
The good news
You’re likely now at a prime decision-making stage of your career: deciding what route to take after qualifying as an Accountant.
The above suggests that to increase your chances of making it to the top, your best bet is to bank what you’ve learned so far, branch out of the Accounting industry and build up some commercial & strategic expertise sooner, rather than later.
And that’s where we come in =)
We’ll be sharing tried-and-tested hints & tips about how to make your swift exit out of Accounting & Audit.
We’re also here to show you that times have changed; you no longer need to spend 20+ years “doing your time” in low level jobs before taking on more responsibility and senior leadership roles.
Exit Options | Mapping the post-accounting & audit landscape
A lot of the clients we coach ask about moving into more strategic & commercial roles after spending time in traditional accounting & audit, but don’t know where to start or even what opportunities exist …so-much-so that we’ve put together a map of the , which I encourage you to check out!
Want personalised advice from one of our Co-Founders?
We’ve been where you are and can help you forge your swift exit. Click here to Get Coached.