A lot of finance professionals assume that becoming a CFO is the natural next step in their career.

You move from Finance Manager to Financial Controller, then Finance Director… and then CFO.

But in startups and scaleups, that progression often breaks.

Some Finance Directors make the step up quickly. Others don’t, even with years of experience.  The difference is not technical ability. It’s how they operate in the role.

Here are the main reasons why some Finance Directors never become CFOs.

1. They Stay Too Focused on Reporting

Finance Directors are often excellent at:

• producing accurate management accounts
• running a clean month-end
• managing audit and compliance

But CFOs are not judged on reporting and delivering a really slick management accounts pack and accurate, useful reports.  Instead, they’re judged on:

• decisions
• direction
• impact

If your value is still tied to, “the numbers are correct”, then you’ll struggle to move forward.

CFOs are expected to answer:

• what does this mean?
• what should we do next?

If you’re not doing that already, you won’t be seen as ready.

Next time you pull your management accounts pack together, start asking yourself the question, "what do these results tell me about the future?".  How can you use this information?

2. They Don’t Fully Understand the Business

This is a big one.

Many Finance Directors stay too close to finance and not close enough to the business.

They know:

• the P&L
• the variances
• the reports

But they don’t fully understand:

• how revenue is generated
• which customers or products drive profit
• how marketing and sales actually convert

And critically in startups, it might also be how long the business has before it runs out of cash

If you can’t link financial data to:

• growth
• strategy
• runway

you won’t be brought into the conversations that matter.  Again, use the numbers to help you with these areas.

3. They Don’t Influence Decisions

Being “in the room” is not the same as influencing what happens in the room.

Some Finance Directors, stick to what they know and only think about "finance" topics.  They:

• present the numbers
• answer questions
• stay neutral

CFOs don’t do that.  They don't just think about "finance" only and not the rest of the business. Instead, they

• challenge assumptions
• offer a point of view
• guide decisions

That requires confidence, but also clarity and insight.  If you’re waiting to be asked, you’re already behind.

If you want to be able to find your voice in a board room, take a look at this post.

4. They Get Stuck in the Detail

This is also very common.Strong finance professionals are often detail-driven, which is very useful early in your career.

But at CFO level, it becomes a problem if you:

• review everything
• get pulled into operational tasks
• don’t step back

You need to move from doing the work to deciding what work matters

If you’re still heavily involved in:

• reconciliations
• detailed reviews
• fixing processes

you won’t have time for strategic work.

I will also say this can be a problem with Reporting as well.  I have taken over from a CFO before who was let go because of these issues.  The prior board back was pages and pages of detailed numbers.  The board don't want to see that.  They want to see what matters.

5. They Don’t Build a Team Around Them

You can’t operate as a CFO without a team.

Some Finance Directors struggle to:

• delegate
• trust others
• step away from the detail

So they become a bottleneck.  They may have a team, but they aren't utilising the team properly and therefore they can't grow a team.  The finance team also won't be happy with this set up either.

Instead, a CFO builds:

• structure
• clear ownership
• capability within the team

If everything still runs through you, you won’t scale into the role.

6. They Don’t Think Ahead

Finance Directors often focus on:

• what has happened
• what needs fixing

CFOs focus on:

• what’s coming next
• what needs to change
• what risks are ahead

If you’re not thinking ahead, you’re always reacting.  Step away from fire-fighting and carve out time to think and plan.

7. They Wait for the Title

This is probably the biggest mistake.

Some Finance Directors wait until they are promoted to start acting like a CFO.

In startups, it works the other way around.

You become a CFO by:

• taking ownership early
• stepping into strategic conversations
• building relationships across the business

The title usually follows the behaviour.

You don't want to be told that a CFO has been hired above you to find out that you haven't demonstrated the skills.  It's a tough pill to swallow.  I know, it's happened to me before, early in my career and it's heartbreaking.  But in hindsight, I wasn't behaving as a CFO and so the business made the right decision.

The gap between Finance Director and CFO is not about experience.

It’s about how you operate.

The people who make the transition move beyond reporting.  They understand the business and are able to influence decisions.  They can build teams around them and really take the time to think ahead

And they do that before they get the title.

If you’re working towards a CFO role, this is where to focus.

Not more technical knowledge.  But how you show up in the business.

We created the FLF Framework to help with this transition, you can see this below:

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This is part of a series on becoming a CFO in a startup. You might also find these useful:

• How to Become a CFO in a Startup
• The 5 Skills Every Future CFO Must Learn

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