FD to MD – First Deputy to Master of your Destiny
There is plenty of precedent for FDs moving to become MDs, indeed about 20% of FT100 companies are now run by their former FDs. The same is true of SMEs, but why does this move suit some and not others.
I’ve made the move and share some of my own observations:
1. Specialist to generalist
FDs often have a wider remit than many of their director peers. Legal / Contracts, Office, IT and even HR may fall under the remit of an FD in a small or medium sized business, but what rarely sits under the FD are the outward looking functions – sales, marketing, as well as production / delivery of whatever the business does.
Even with a wide FD remit, as I had, the move to encompass production and the outward looking functions can be a challenge. FDs are stereotyped as being the risk averse, cost mangers – and this can somewhat count against them when they move to have sales and marketing directors reporting to them. I firmly believe that creativity isn’t in the sole ownership of these outward facing functions and that many accountants are as creative as their marketing peers, but as MD you might have to work hard to be accepted (and have your input valued) by these functions.
I found being a generalist exciting and a great time to learn, but as an FD I had always taken an interest in many of the areas I had no direct responsibility for, indeed I took a Marketing qualification as soon as I started FD’ing a Marketing agency.
2. Leading specialists to leading everyone
Leading a finance department is probably easier for an accountant than leading a diverse group of people in a business as a whole. I knew as FD I was the most experienced accountant in the business and had confidence as the leader of the other finance employees. This confidence came from knowing, that they knew me and I knew them and we all valued what finance does. When you move to manage the whole business there are (many) people in the team who you don’t know and they don’t know you. There is no earned respect by being good at what they do.
People are motivated by lots of different things. Generalising (probably more than a bit), many accountants like accuracy and order and things that can be measured. In most cases its difficult to measure the value of an idea – or why one creative output is better than another (personal preference aside) and the people who work in these areas may like a looser framework to operate within.
3. Internal to internal and external
As FD I rarely met clients or prospects. When I did it was either because something had gone wrong or because the issue we were discussing was legal. Also, I was a bit guilty of spending too much time looking inwards – relying on outward looking functions to inform future service offerings and to keep up to date with how the market was changing. If you are an FD, I’d encourage you to address this – know your market and what happening (in detail) and get in front of clients often (to hear it from the horse’s mouth).
As MD I had a much wider remit and was expected to be looking outwards at least 50% of the time. It’s easy to focus on the internal – that’s the comfortable area and nearest to your FD role – you can convince yourself that sorting out the internal issues is the first step – particularly in the new areas you are responsible for. However, you could be honing something that no longer delivers what your customers and prospects are looking for, so many new MDs start their tenure by visiting clients and asking for feedback. You have the perfect reason to fix meetings in your early days – to introduce yourself and to ask for feedback and most clients will be glad to be visited and asked for their opinions.
4. And some things that stay the same – but you need to do more of them:
Be curious about everything – ask questions and really listen
Remember to ask open questions “tell me about how we sell?” is a better way to start finding out and isn’t prompting the person you are talking to justify the norm. And listen without the desire to respond.
Simplifying the complex
Many things in business become more complex than they need to be. Make sure you don’t add complexity – in fact make clear that you value simplicity – Stop – reduce – standardise could be your mantra. Simple things get understood and get actioned – complex often don’t.
Consistent communication and behaviours
Leadership is about constant consistent communication – set the vision and the strategy and keep reinforcing it. We have three growth drivers this year and at almost every management meeting we talk about how they are being progressed.
Consistent behaviours also let your team get a feel for you and modelling in yourself what you want to see in others is a key part of leadership – even down to putting your tea mug in the dishwasher, talking (and thanking) the cleaners and not working long office hours (even if you continue working when you get home).
Maybe the most exciting part of being any director is in my mind filtering data, insights and events and suggesting ideas that might improve the business and the way it operates. As MD you will be doing this in relation to the whole business – although many FDs also do this.
You need to be clear why you want to move from FD to MD. It’s not for everyone and many FDs enjoy great satisfaction from their trade and don’t want to lose that in moving across to MD. For me it felt like my goal for a long time before it happened and I really enjoyed the change when it came.
If you have thoughts on the move from FD to MD, I’d love to hear them.
Alistair Moore – Chairman, Trace Recruitment