How does an FD gain commercial skills?

Wednesday, December 01, 2010 | Posted by: Fiona Cullinan
Categories: Research, Thought Leadership | Tags: statistics, report, survey, data, advice, CFO, FD, talent, Directorbank, finance director, analysis, skills, commercial, experience

Understanding the business and getting as much commercial exposure as early as possible is critical for becoming a successful FD, according to Grant Thornton’s recent survey, researched in conjunction with Directorbank. But how? A number of outstanding finance directors share their views…

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You can download the full survey and report What makes an outstanding finance director? as a free PDF. Or, to read just the key findings of the survey of 350 directors, see our post on Elevate – for business leaders.

Commercial versus technical experience
Many talked about the need to look for commercial experience, grabbing knowledge and variety – even if this means pushing yourself beyond your perceived capabilities.

Taking on divisional roles, working at headquarters, getting involved in mergers and acquisitions or an investor-facing role, working overseas, experiencing adverse conditions and getting close to the end user – all are important ways to become commercial.

It was clear that our FDs advise any aspiring FD to manage his or her career aggressively in order to build up the necessary experience. While technical competence was agreed to be essential, there was also a fear that becoming too much of a technical expert could be detrimental.

Our respondents advised:

“Be curious, find out what’s behind the numbers.”

“Understand where the wealth creation is in the business.”

“Seek out influential people in the business and opportunities to work with them.”

“Push yourself into areas that will bring variety to your CV.”

“Keep moving. The biggest enemy is inertia and personal risk control.”

“You need to have had a lucky break but then you need to deliver on it.”

“Get out into the divisions and as close to those things called customers as you can.”

“In the profession I was very happy when my favourite client offered me a job. I had a choice go for partner in say, five years or take a risk and leave. It proved to be a great opportunity. I was made FD and general manager of an organisation that employed 500 people at the age of 27.”
Andrew Gossage, COO, Ultimate Products

“I’ve been headhunted for every job and I think headhunters play an important part. The best are those who have the skills to match people to the job – rather than the paper qualifications. It’s spotting the wild card who doesn’t meet the spec but is really good.”
David Downes, NED, Bio Group

“One of the great advantages of being in M&A for a few years is seeing a lot of different business models. You understand to a degree how different companies tick and what creates value.”
Dr Raymund Scheffrahn, MD, GVO Asset Management

“You have to have a curious mind – really wanting to understand what’s behind the numbers. You have to make an effort to become commercial. For me it started in GEC, being involved in major contract tenders, talking to customers and negotiating variations. The starting point is inside your business and generally people are very willing to help you. When you’re sat at a board meeting trying to make strategic decisions, you need to understand how the customer thinks.”
Barbara Richmond, Group FD, Redrow Plc

“It’s very easy in finance to dive down a tunnel and just be the financial or management accountant or the tax and treasury person. You must think wider and remember that you’re only there counting the beans because somebody is growing them somewhere. You need to find out how the beans are grown.”
Swag Mukerji, CFO, SafetyKleen (Mr Mukerjee has also posted his thoughts on FDs in our Unsung heroes video post.)

“You can have commercial exposure in any role if you choose to, by going out to the front end, understanding it and bringing it back in to the job that you do.”
Judith McKenna, CFO, Asda Stores

“The snag of a CEO, to use a chemical analogy, you’re in continuous production. There is no time when you cannot take a call and expect to add value. An FD is a batch production man. You do the annual accounts – stop. The budget – stop. You can become slightly more detached, more objective. A CEO is absolutely bound up with it.”
Sir Richard Lapthorne, Chair, Cable & Wireless Communications Plc

As always, we welcome your thoughts on this and any other aspects of the What makes an outstanding FD? report. If you would like to speak to anyone about any of the details in the report, please get in touch with Jo Parr at jo.k.parr@uk.gt.com. Tomorrow we will be posting about FD skills in the private equity environment.

You might also find these posts useful:

* Is your FD a chief exec or chair in waiting?
* How to get noticed as an outstanding FD (and get the top jobs)
* Perception vs reality of corporate corruption risk (infographic)