How Important is P&L Management for Up-and-coming CEOs?
Imagine you've had a storied leadership career to date. You're hovering around the 18-22 year mark ... right at that point when a retained executive search firm approaches you about a great next step: successor CEO for a company where the founding CEO is participating in a search to replace him.
The stakes are high and you're interested.
After being vetted by the search firm, your first official meeting (don't call it an interview!) is dinner with the founding CEO. Skip to the front of the line!
Before you order the first appetizer, he ask you this: "So how large of a P&L have you managed?"
You freeze.
You've managed 4,000 people globally. You've managed budgets totaling 45 million dollars. You've mentored 12 high performers into senior leadership roles. You've driven $50B+ in revenue for crying out loud!
But you have to confess: "Well, I've never officially managed a P&L."
The founding CEO doesn't beat around the bush: "Hmm, I wonder why [the search firm] suggested we meet."
Dinner is over early.
Both of these folks—the CEO and the potential successor CEO—had careers that many might consider exceptional. They both continue doing impressive work in tech. They're game changers in their fields.
But the P&L hiccup held three core lessons for both:
P&L management matters.
Not all search firms are built equally (the search firm should have done better).
The CEO in question might have been short-sighted by not exploring the conversation a bit further, and the candidate (my client) should have been better prepared with an answer. (This is a real-life story, and I now make sure my clients are prepared for the P&L question.)
On a related note, I recently began researching how many CEOs in the Fortune 500 founded their own companies or firms in the early parts of their careers, and the percentage is becoming convincing. Guess what starting your own company or firm involves? P&L management.
About Jared
Jared Redick is a San Francisco-based career transition coach, executive résumé writer, and brand development consultant—helping professionals and professional services firms position themselves for what's next.