Having begun his career at United Parcel Service (UPS) three decades ago as a driver, you might expect CFO Kurt Kuehn to know the company inside and out. During his long tenure he has managed such business functions as financial analysis, industrial engineering, and strategic costing for the shipping giant, enjoying the kind of linear career path that barely required him to turn the wheel.
With one exception: in 1999 he was unexpectedly asked to serve as UPS's first head of investor relations. The job was hardly trivial, since UPS was about to launch what was, at the time, the largest initial public offering of the 20th century.
"At first I wasn't sure CEO Jim Kelly was serious, but he didn't laugh after he asked me so I figured he must have meant it," Kuehn recalls. After the IPO and a successful stretch in IR, Kuehn spent four years as senior vice president of worldwide sales and marketing before he became CFO in 2008. Kuehn says his sojourn in sales and marketing helped reconnect him with UPS's customers — people he rarely interacted with during the 10 years when financial ratios and market research were his primary concerns.
There is a lesson in Kuehn's experience for other aspiring CFOs: Don't discount the many potential benefits of a nonfinance position. "Because the CFO is increasingly focused on driving results across the company," says Russell Boyle, head of the U.S. Financial Officers practice at executive recruiting firm Egon Zehnder International, "we see a growing number of finance executives take on operational or business-line roles" as they work their way up.
Many companies have long tried to provide that versatility through job-rotation programs, but for some upwardly mobile executives it's the unplanned detour from finance that truly pays off.
In 1995, for example, Thomas Schilling, currently the CFO of USA Mobility, was working in financial planning at MCI. When the telecom giant acquired SHL Systemhouse in an effort to expand into the computer-services market, the company asked Schilling to take on a sales director role at SHL for the next 18 months; despite his doubts, he says the move made him a better finance manager.
"It helped me understand [sales people] a little bit more and what they're up against," Schilling says of his stint as managing director of sales. "It also helped me understand what they're not up against so I could sort through the [stuff] that salespeople sometimes throw at you." (In what he describes as "definitely my best career move," Schilling left MCI before WorldCom acquired it.)
Found in Translation
If positions outside of finance broaden a would-be CFO's experience and vision, they can also help him communicate to the rest of the company just what finance is all about. Steve Fradkin, finance chief of Northern Trust Corp. since 2004, says his "broad array of experiences in international, general management, and compliance roles" prepared him to "help translate my CFO role" to everyone from internal managers and board members to investors and regulators.
Fradkin joined Northern Trust in 1985 as a legal, legislative, and regulatory affairs analyst. Subsequently he held positions in marketing, sales, and general management for Northern Trust's international division before moving onto a finance role. The international experience was particularly useful in that it better equipped Fradkin to deal with clients and staff located outside the United States, where Northern Trust derives a large percentage of its income.
At video-game publisher Activision, much of Thomas Tippl's job involves separating fantasy from reality, a skill set he picked up several years ago when he helped Procter & Gamble sort out potential acquisitions. "Video gaming is a hot industry and growing rapidly, and there's a lot of substance, but there are also deals that are being pitched to you that are a lot of hype," Tippl says. "I get calls everyday, for example, about games for mobile phones, which generate revenue but don't make any money."
From 1999 to 2001 Tippl served as associate director of mergers and acquisitions and co-founded P&G's corporate venture-capital fund, a particularly educational time to be involved in that activity since the dot-com world was going from boom to bust. That experience, he says, taught him how to dig past the initial pitch and look for a well-defined, revenue-and-operating-income-generating business model.
No Longer the Go-To Guy
Although CFOs invariably say that their nonfinance jobs helped them develop in any number of ways, at the time they may not have welcomed those opportunities. Marc Pfefferle, a partner at Carl Marks Advisory Group, says the risk aversion that is innate to finance professionals may be partly to blame. He says that before ruling out such jobs, candidates should "think about it in terms of how it's going to be perceived by someone who may want your services next."
Of course, it may be more than unfamiliarity that's at stake. When Kuehn was asked to head up investor relations at UPS as the company planned its IPO, he says one daunting aspect of the job was knowing that "all of my partners, who I had known for 25 years, were deeply invested in the company, and overnight I was responsible for their well-being."
No doubt it's difficult to "go from being the go-to guy and expert in your area to someone who has to learn the ropes," Schilling says. "You have to feel your way. But it's nothing that a little time and hard work won't help you overcome."
"The more experiences you have that give you the chance to manage," says Pfefferle, "the more versatile you're going to be and the more valuable you'll be."
Kate Plourd is a reporter at CFO.