Last month’s dismissal of Carol Bartz as CEO of Yahoo and the appointment of finance chief Tim Morse as her interim replacement once again raise two related questions: Are CFOs qualified to be chief executives, even for a short while? And, more to the point, do they want the job?
When CFOs land the CEO post on a temporary basis, they stay in the role permanently only about 20% of the time, estimates Tom Kolder, president of executive recruiting firm Crist|Kolder. And his firm’s just-released “Volatility Report 2011” finds that just 8% of the CEOs at the 669 companies in the Fortune 500 and S&P 500 were CFOs immediately prior.
If the CFO post is not exactly a fast track to the corner office, one reason may be that finance chiefs are happy in their roles. “It’s fairly easy to position CFOs as interim, because they typically don’t want the job,” says Mike Lehman, the longtime finance chief for Sun Microsystems and current CFO at Palo Alto Networks.
Lehman speaks from recent experience. When Palo Alto Networks’s CEO departed last December, Lehman filled in as part of a three-person “Office of the CEO.” Like many of his counterparts, he says he prefers being the chief executive’s right-hand man, acting as a business partner, and working with the board of directors.
When John Leahy, currently CFO at iRobot, was tapped as interim CEO at Keane in 2006, the scale of the work was immense. Keane’s CEO had left on short notice, just as the board had begun to consider selling the company. And Leahy still had to run the finance department. “I really had my hands full,” he says. “It helped make it clear to me that finance is what I really enjoy doing. Being a CEO involves a lot more time, and you’re doing a lot of it out in the public domain.”
Still, Leahy says, it was an incredible learning experience. He had to rally the management team, become more involved across the organization, act as chief communicator to 10,000 employees, and make some difficult organizational moves.
Some CFOs do ultimately become CEOs, and an interim post may be just the thing to help them clarify their goals. But it is often a trial by fire, so if the chance presents itself, don’t just do the job, think also about whether you’d like to do it all the time.