In recent years, role shifts and the establishment of new tasks and skills at C-level can increasingly be observed in top management. In addition, more and more new positions such as Chief Data Officer, Chief Digital Officer, or Chief Transformation Officer are being added at management level. Read here how companies fill these new positions and what skills a CEO needs today.
Who fills the new positions?
The developments in the C-Suite also raise the question of filling these new positions. It is noticeable that for the new functions such as CDO or CIO, external managers are often recruited who have gained the relevant experience, for example at international tech groups. But would the new roles and positions actually represent a realistic career opportunity for executives with a different professional focus? And who has the best chance of becoming CEO in the future?
The tasks and functions in the C-level area are currently shifting towards the digital world.
CEO, CFO, CTO – what are the differences?
What does CEO and CFO mean? What is a CTO? In order to be able to talk about the different tasks and qualifications, the terms CEO, CTO and CFO should first be clearly differentiated from one another:
- According to abbreviationfinder, The term CEO (Chief Executive Officer) usually refers to the executive board member or the chairman of the board.
- The CFO (Chief Financial Officer) is the commercial manager of a company. In public companies, the term often refers to the chief financial officer.
- A CTO (Chief Technology Officer) is the technical director of a company and thus the highest technical manager. He implements tasks relating to the technical infrastructure.
Can CFOs also CTO?
The first of these two questions is easy to answer because a CFO’s qualifications are very specific.
Between two jobs – self-employment and start-up models for top managers
A simple move to a position that requires a high level of product and process knowledge with a technical background (CTO) is hardly feasible. In our experience, the success rate in the placement of executives who are aiming for a professional reorientation in the top executive segment is less than one percent in Germany.
When it comes to the question of who has the best chance of becoming CEO in the future, things have to be looked at in a more differentiated way. Because the answer is both industry-dependent and organization -dependent .
Who is the best CEO?
Companies with a holding or group structure are particularly suitable for advancing from CFO to CEO. In the automotive sector, for example, you can see that the career step from Head of R&D to CEO position is a planned station on the way to the top of the company. This is to ensure that the CEO, as managing director, has got to know the entire company and the comprehensive tasks of a CEO in all its facets.
This shows that such a professional or functional change in top management functions can definitely be planned within companies. However, a look at the information technology sector, such as Microsoft and Apple, shows that a change from COO or CTO to CEO is definitely possible there.
Product knowledge vs. financial expertise in medium-sized companies
In medium- sized companies, the situation is very different. Here there is often a tandem leadership consisting of a managing director and deputy managing director (CFO). In Germany, for example, there are always cases in mechanical engineering in which this double function is embodied and performed in a personal union. The likelihood of a deputy manager or commercial director moving up to managing director (CEO) is usually significantly lower. This is because the management is much more market and product oriented and their area of competence does not correspond to the usual tasks of a CEO.
“In start-ups and medium-sized companies, product and process knowledge in the management area is almost indispensable.”
But, as always, exceptions confirm the rule. A recent case from mechanical engineering also showed that financial experts can definitely be in demand in larger medium-sized companies. An automotive supplier appointed a former banker to the C-Suite as CEO. A post that one would think would require elaborate knowledge in the field of mechanical engineering. This connection makes it clear that as long as such an appointment creates concrete added value for the company in a certain market cycle, it makes sense and can be justified.
The functions in management are shifting
In addition, another development can be observed, especially in group companies, which is becoming more and more important and also has an impact on the specialist knowledge in top management. Above all, this can be seen from the fact that the management functions and tasks of the CFO are becoming broader. CFOs are increasingly taking on management roles that used to be traditional CEO responsibilities. This is one of the reasons why CFOs will be able to switch to the position of CEO more often in the future.
“Financial expertise is always in demand – especially in times of upheaval.”
The main causes of change are certainly the digital transformation and disruptive business models, which are often embodied by platform-based companies. For top managers and managing directors (CEOs), this means that in the future they will have to be more open to change and always up to date with the latest information. Further training, such as that offered by the Executive School University of St. Gallen, and the acquisition of digital expertise must be a consequence of this development.
Professional reorientation in times of upheaval
External changes such as those caused by digitization also affect the personal motivation for a professional reorientation. Be it a desired change of employer, the perspective of an international environment or the trend towards local production – the motivation for one’s own professional change can be diverse. It is crucial to recognize these in good time, to plan changes accordingly and to implement them consistently.
Whether CEO, CFO or CTO: the opportunities for further development in the top committees of a company require long-term planning. With a regular review of whether the path you have taken is the right one, sparring on an equal footing with experienced career advisors can provide valuable impetus.
Immerse yourself in your career planning and further development opportunities with our experts. Find out more about how our experienced consultants can optimally prepare you for your next career step.