Good morning! Fortune writer Lily Mae Lazarus here, filling in for Ruth.
CFOs are often seen as strong contenders for the CEO position thanks to their deep financial chops, visibility with company boards and shareholders, and overall familiarity with the organization’s inner workings. But these strengths alone are just a small part of what it takes to excel in the top role.
Despite the growing trend of CFOs becoming CEOs, not all finance chiefs are suited for it. Research from Spencer Stuart found that, on average, CFOs-turned-CEOs are slower to drive top-line growth compared to leaders from other backgrounds. That’s largely because the CFO archetype doesn’t always align with the leadership, vision, and risk tolerance essential for a successful CEO.
Notably, the study also found that “leapfrog” CEOs—those promoted from two or more levels down—and divisional CEOs have significantly higher odds of outperforming.
“Historically, CFOs are counted on to be black and white and by the numbers, when in reality, a CEO is the one that has to navigate through the gray,” says Jeff Herzog, president of executive recruitment firm FPC National.
Thriving in ambiguity, he explains, often comes more naturally to those with broad, cross-functional experience rather than a narrow financial focus, which can lead to an over-reliance on numbers and quantitative thinking—creating blind spots in areas like vision, talent, and company culture.
CFOs who do go on to have successful stints in the corner office have a more comprehensive and well-rounded background and typically have already taken on strategy, P&L management, and operational responsibilities while developing strong interpersonal skills.
Of course, no single factor determines whether a finance chief will thrive or falter as CEO. But those lacking a diverse and expansive understanding of business functions—along with the ability to inspire and lead through uncertainty—risk falling short in the role.
Read the full story here.
Lily Mae Lazarus
lily.lazarus@fortune.com
