Best Way to Executive/Junior Exec Roles at F500s Besides MBB Consulting + 1 More Q?

The final question I had is can FP&A or non-corp dev people eventually become junior execs/executives at a company or is that solely reserved for corp development/corp strategy teams?

A large % of finance executives (including CFOs) at F500 companies come from non-corpdev/banking/consulting backgrounds...I would say the majority don't have the aforementioned background...most have pretty heavy FP&A backgrounds since the vast majority of the work that these guys focus on is forecasting, budgeting, planning, tax, treasury, etc...not that much time is spent thinking about M&A and strategy (they are generally afterthoughts and not core finance...hence these groups are usually the first to get laid off in bad times).

Just look at the backgrounds for the CFOs of the some of the fortune 15 non-banking companies (2010 list): - Wal-Mart: http://investors.walmartstores.com/phoenix.zhtml?c=112761&p=irol-govBio… - Exxon Mobile: http://www.exxonmobil.com/Corporate/about_who_mgmt_ddh.aspx - Chevron: http://www.chevron.com/about/leadership/corporateofficers/yarrington/ - GE: http://www.ge.com/company/leadership/bios_exec/keith_sherin.html - ConocoPhillips: http://www.conocophillips.com/EN/about/leadership%20team/pages/jeff%20s… - AT&T: http://www.att.com/gen/investor-relations?pid=7822 - Ford: http://en.wikipedia.org/wiki/Lewis_W.K._Booth - HP: http://www8.hp.com/us/en/company-information/executive-team/lesjak.html - Verizon: http://www22.verizon.com/Content/ExecutiveCenter/Francis_Shammo/?IsBio=Y - McKesson: http://www.mckesson.com/en_us/McKesson.com/Investors/Corporate%2BGovern… -GM: http://www.gm.com/corporate/about/bios/liddell.jsp

I only see 1 with a banking background...GM's Liddell was an ibanker.

Thanks for the in-depth description of all the jobs. So basically, from what I take it, FP&A sounds like a support role, so they won't be doing any decision-making then and will probably have to wait till they get into very senior levels before they get to be on the decision side of processes. Is that a fair assessment? I believe you already said that FP&A does in fact lead to junior exec roles, so is part of the reason they get there because they're so good at the analysis/support side of deals that management figures they'll be good at the actual decision-making aspect once more senior members leave?

So basically, from what I take it, FP&A sounds like a support role, so they won't be doing any decision-making then and will probably have to wait till they get into very senior levels before they get to be on the decision side of processes. Is that a fair assessment?

At most companies finance in general and FP&A are support organizations that essentially provide executives with reporting, projections/forecasts, and analyses around the financial impact of certain decisions the business may make. In effect finance plays the role of a key influencer (usually one of the most important) but is generally never, even at the executive level, in the driver seat in terms of making decisions.

I'll give you a really concrete made up example of what an FP&A decision support type project may look like. Let's say you work in FP&A for Home Depot's retail division. Craig Menear(http://corporate.homedepot.com/wps/portal/Leadership/Menear), the EVP of Merchandising (responsible for all merchandising departments, services and strategy), walks into a senior leadership team meeting and says that his team has come up with a strategy that is going to revolutionize the business - in addition to the large Home Depot warehouse stores they are going to launch a line of new Home Depot "Mom and Pop" type hardware stores (similar to Ace). He walks the leadership team through the strategic rationale, the concept, etc. At the end of the meeting Frank Blake, Home Depot's CEO, tells Craig that it's an interesting idea that should be analyzed further. He asks Craig to engage Ted Decker, (http://corporate.homedepot.com/wps/portal/Leadership/Decker), SVP of Retail Finance, for support. Ted accepts and sends it over to you, his star analyst :), to analyze the financial impact of the decision. Working in conjunction with Craig's team on the key assumptions, you put together a model that analyzes the potential market opportunity of launching these store, the potential cannabalization to Home Depot's current stores, the investment required to launch, among other things. At the end of the day your analysis tells you that the project is retarded...the investment is too high, it's going to cannabalize sales of the major stores, the upside of the additional sales is not enought to justify the negative impacts, etc. You send your analysis back to Ted - he agrees and presents it in the next senior leadership meeting. In that meeting the leadership team discusses everything they know about the proposed project, including your analysis, and decide that they will not undertake the project (or they may decide that for long-term strategic and competitive reasons they are going to undertake the project despite its potentially negative effects over the next 3-5 years that you projected).

Obviously in the example above your analysis is key in influencing the final decision but even then the executive in charge of retail finance is not the one making the final decision but he is at least a key member in the discussion.

I believe you already said that FP&A does in fact lead to junior exec roles, so is part of the reason they get there because they're so good at the analysis/support side of deals that management figures they'll be good at the actual decision-making aspect once more senior members leave?

Yes FP&A is usally one of the primary sources for senior finance executives at most companies. In part this may be because they are good at the analysis/support side of projects, etc. However, the main reason they tend to move into senior roles is because their prior experience that progressively increase in responsibility and scope within FP&A give them the tools necessary to lead a finance org. For example, you start off as an analyst and quickly move up to senior analyst. Management recognizes that you are a rising start and promote you to a manager role where you are effectively responsible for a $100M P&L (chump change at your $40B revenue company). You do well and fix a bunch of problems. Then you are promoted to sr. manager responsible for all finance activities in a small $500M subsidiary - Thailand. lol. You do well in Thailand and get promoted to director leading finance for a larger $1.0B subsidiary - Spain...again you do well and they move you to run finance for one of the company's smaller division $3B....see a trend here? Effectively as you do well you are doing similar kind of work but it starts to scale to the point that at the end of the day when they want to choose who is going to be the next CFO or who is getting promoted to run the $30B division the people best set up to do it are those that already have a proven track record of running increasingly bigger finance orgs...not the former banker who is now in corpdev. What does he know about running a finance division where the vast majority of his work is going to require deep experience in accounting, FP&A, tax, etc. Usually the bankers/corpdev guys that make it to the senior finance positions leave corpdev after a few years to go run finance for one of these small business and eventually get promoted to larger ones, etc. same path...