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Leadership change at Google: what all new CFOs need to consider

RUTH PORAT will take over from Patrick Pichette in May as the CFO of Google, leaving the investment banking world of Morgan Stanley after 28 years at the firm. Her appointment raises some interesting questions about how new CFOs can best adapt to their new roles, particularly when they involve a major shift in industry, geography or company culture.

Whether it’s moving from Wall Street to Silicon Valley, or to another industry altogether, all new CFOs require structured support from their new colleagues to understand and adjust to the way work gets done. For 91% of new CFOs, we found there is no formal orientation program when they join the company.

Of course all CFOs will have a clear grounding or background in their new role. Porat led the technology banking group at Morgan Stanley during the years of the dot-com boom and has worked on a number of major tech IPOs. She grew up in California and studied at Stanford University, so will no doubt a good ‘cultural fit’ for Google. Yet the same challenges still stand, regardless of how experienced the transitioning leader is.

The biggest tasks that CFOs face when starting at a new company are two-fold. First, building relationships with the leadership team across the business, including the heads of different departments, and secondly getting up to speed on business operations and the ‘day to day’ understanding of how the company is run.

So how can companies ensure a smooth transition for their new CFO? There are four Fs to consider:

FitImproving organisational IQ: Ensure the new candidate understands and adapts to the way the company works, including culture, the business model, and current capabilities. At Google, or any other major global organisation, this means investing time into how different departments work together and becoming familiar with the culture of the business.

FriendsForming connections: Provide structured assistance in identifying and forming connections with key stakeholders. As well as networking internally and building relationships within the business, success for Porat will likely depend on developing strong relationships outside of Google and across Silicon Valley.

FocusCreating role clarity: Ensure understanding of the expectations for the role with the new leader and his or her direct reports. For Porat, setting goals, both for short-term wins and longer-term gains, that are tied to the vision and strategy at Google is key.

Future – Shaping the future: Define strategic priorities and the future vision for the finance function at an early stage. Identifying the current strengths and weaknesses within the function must be the first step for defining the future state at Google or any other organisation.

Our data shows that investment in the first two areas in particular significantly speeds up the time it takes for the new CFO to boost overall performance. When it comes to friends, the CFO’s predecessor and other executives need to share their own connection and pinpoint the important relationships to build, beyond the obvious candidates. Unlike at smaller companies, global companies require their CFOs to be more externally-focused, almost acting as a “mini-CEO”. The chart below shows some the different groups that new CFOs need to engage.

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Ruth Porat will step into her new role on 26 May. For her transition and those of other new CFOs this year), making friends, fitting in and understanding the company culture will be critical hallmarks for success.

Paul Dennis is advisory leader at CEB

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  • If any new CFO felt he or she needed leadership tips from a forum like this, then success is highly unlikely. If the article was oriented towards helping entry-level finance staff learn from managerial changes, then perhaps that would be relevant.