Three Major Factors Affecting VPs of Finance Who Want to Switch Industries

One of the most frequent questions I get from financial executives looking for a new position is: “Can I switch industries?”

Why Make the Switch?

There are usually three reasons that a VP Finance wants to change industries. If they are actively on the job market, they want to increase their field of potential employers. If they are gainfully and somewhat happily employed, senior financial professionals often want to change industries simply because they’ve run out of technical challenges and want to re-engage professionally and intellectually and apply their experience productively in a new environment.

The third reason financial executives decide to switch fields is because they happen to be working in the modern day equivalent of the buggy whip business and want to jump out of that particular industry before they get pushed.

3 Major Factors to Consider

Whatever the reason, switching industries for financial executives is usually a challenging exercise. When considering a change in industries, there are three major factors that will impact a VP Finance’s chances of success:

1. The Economy
   Ironically, the best time to look at changing industries is when you probably aren’t really motivated to make any drastic changes. A strong economy always translates into too few good candidates for positions on offer. And within a strong economy there are usually one or more very hot segments that are growing like a weed and crying out for qualified professionals and executives. If you suspect that you’ll want or need to get out of manufacturing where you’ve spent the last twenty years, a booming economy is when you want to start putting feelers out.
2. Size of Company
   As I’ve pointed out in a previous blog, “The Invisible Job Market for Financial Executives”, by the time finance and accounting professionals percolate up into VP Finance positions, they are usually working for small and medium sized enterprises (SMEs). And even though you may be in the top financial spot of an organization and a valued member of the executive team, VPS of Finance of SMEs still need to be relatively hands-on. Aside from your financial prowess, a big part of the value-add that you bring to the table is your knowledge of the particular company and industry you work in.In very large organizations, it tends to be easier for top financial executives to switch industries. Typically these VPs of Finance are more focused on strategic, organizational and finance issues than the actual nuts and bolts of the business.
3. Financial Sophistication of the Hiring Authority
   Owner-managers and CEOs of SMEs tend to be either very knowledgeable about the finance and accounting function or they treat finance and accounting as a necessary evil that they prefer would just go away.Financially sophisticated CEOs know how to get maximum value from their CFO and tend to insist on hiring someone who brings a wealth of industry experience to the table. Unless there are a dearth of candidates with relevant industry experience, you’re not going to have much luck with this part of the market if you haven’t spent any time in that particular type of business.

Variation on a Theme

A variation of the above is the savvy CEO who recognizes that his or her company could benefit from some cross fertilization from a different industry. This person recognizes that opportunity often lies in applying old technologies to new situations or applying new technologies to old situations. If you work in an old-school industry that could teach something to a new economy company or conversely, have knowledge of new techniques or technologies that could revitalize a mature company, you stand a very good chance of finding a new home (and industry) with a CEO who recognizes your unique value-add proposition.

One CPA is as Good as Another

For every one CEO with a high level of financial sophistication, there are two owner managers whose core belief is that an accountant is an accountant is an accountant. To this segment of the market, if you’ve got your CPA, have been a VP Finance before and seem like a decent person, you are a definite candidate for the position on offer, regardless of what industry you currently work in. This CEO typically isn’t looking for much in the way of strategic input and just wants the accounting function run well (whatever that looks like) without requiring much oversight or change in how the business is currently being run.

Caveat Emptor

Of course, the VP Finance who manages to switch industries but finds themselves working for someone who doesn’t really understand the value of a good financial executive is going to be facing more challenges than just learning a new industry. The best case scenario is that they educate their new boss and demonstrate how a well-run finance team and a switched on CFO can add real value to the enterprise. The worst case scenario is that the CEO never changes their opinion of the finance function and the new VP Finance finds themselves in a state of perpetual frustration.

Most real life outcomes fall somewhere on the continuum between the best and worst scenarios described above. But since they won’t really know how their new boss will treat them until they’re in the chair, VPs of Finance need to be aware of the possible pitfalls that sometimes accompany a change of industries and have a strategy in place to maximize their chances of success in their new position.

Be Proactive

You need to be creative and proactive if you want to increase your chances of successfully switching industries. If you incorporate these factors into your job search strategy it may still be an uphill climb, but you’ll increase your chances of being the right person in the right place at the right time.