There seems to be a growing trend of CFOs moving into CEO or president roles, according to a report by Bloomberg. As previously highlighted by HealthLeaders, this shift shows the changing nature of the CFO’s role in healthcare and the need for finance leaders to possess a deep understanding of what drives growth to succeed in top leadership positions.
Historically, CFOs across all industries have been primarily responsible for number crunching and financial management. However, their responsibilities have expanded to include more operational duties, requiring a broader skill set—especially in healthcare.
This shift has helped a record number of CFOs ascend to CEO positions last year at some of America’s biggest companies, Bloomberg said.
So what are the numbers? Among the firms represented in the S&P 500 and Fortune 500, 8.4% of them promoted a CFO to CEO, according to exclusive data from Crist Kolder Associates cited by Bloomberg. That’s up from 5.8% a decade ago.
“CFOs are taking on a more operational role in those businesses, ingratiating themselves,” Josh Crist, a co-managing partner at Crist Kolder, told the outlet. “The more you can grab as CFO, the more likely you will have chances at the top gig.”
Healthcare Leaders Weigh In
This sentiment is ringing especially true in the healthcare industry where from a strictly operational perspective, the pandemic has significantly increased the workload for most healthcare CFOs—but this could have really benefited them for future roles.
This shift includes handling and accounting for rounds of stimulus money, complying with new regulations, and managing skyrocketing accounts for healthcare services.
In fact, HealthLeaders has spoken to multiple CFOs on just that.
“My role as CFO has become much more active as I try to balance the normal work of the monthly financial statement process; the annual budget process; year-end and audit preparation; and cost reports, with managing the additional funding received as a result of COVID—how to effectively and appropriately expend it; and analyzing new services along with market evaluation of pay structures,” explained Terry Lutz, CFO at Scheurer Hospital, a 25-bed critical access hospital in Pigeon, Michigan.
On top of COVID, the Great Resignation also played a part in the expansion of the CFO role.
“[The great resignation also] forced me to think about things that are not 100% germane to finance numbers,” said Carlos Bohorquez, CFO at El Camino Health. El Camino Health includes two nonprofit hospitals: Mountain View Hospital and Los Gatos Hospital, as well as urgent care, multi-specialty care, and primary care facilities.
Bohorquez said he now needs to have a strong grasp on human resources issues, including recruiting and retention—issues that have also been on the top of finance leaders’ minds in our HealthLeaders Exchange community.
So How Can CFOs Move Forward (And Up)?
CFOs who take on a more operational role within their organizations increase their chances of eventually becoming CEO, Crist said to Bloomberg.
In order to advance to the CEO role, hospital and health system CFOs can take several steps.
CFOs can continue to focus on broadening their skill set to include more operational expertise. This may involve gaining experience in areas such as supply chain management, revenue cycle management, human resources, and overall strategic planning—areas that I have seen most CFOs already prioritize.
On top of this though, building strong relationships and networking within their organization and the healthcare industry can help create opportunities for growth.
But, while the path to CEO is becoming more attainable for CFOs, serving as a COO still remains the clearest route to the top leadership position, Crist Kolder says. In fact, nearly 50% of CEOs who rose from within their organization previously held COO-type roles.
This means gaining experience in operational leadership positions can provide valuable insights and experiences that translate well into the CEO role.
Amanda Norris is the Associate Content Manager of Finance, Payer, Revenue Cycle, and Strategy for HealthLeaders.