Archives for November 2011

November 29, 2011 By Samuel Dergel 2 Comments

Ask Samuel: Is it time to change CPA Firms?

Dear Samuel,

I am a CFO of an owner-managed company. In recent years, our CPA firm has not been servicing us properly.

They are always pushing our deadlines to the limit, even when all the information they have requested has been delivered in a timely fashion to them. We also recently had a significant interest charge from the IRS because they ‘forgot’ to file a form on time.

I like the partner in the firm, but I don’t find that we are getting the service we need. Is it time to change CPA firms?

Fed up in Phoenix

Dear Fed up,

If you look at our CFO Relationship Map, you will see that the CPA firm is an important external relationship that needs to be nurtured for a CFO.

It is unfortunate that you are not satisfied with the service from your CPA firm.

Changing CPA Firms is an option. Before you do so, I would recommend that you sit down with the most senior person at the firm you deal with to see if you can find solutions to your dissatisfaction.

If you decide that it is time to change CPA Firms, I recommend that you get referrals to other firms from other CFOs you know, as well as your bankers. You should do a preliminary review of the services of a few CPA firms, and reduce the list to 3 of your top choices. Ask these 3 top firms to meet with you and prepare a proposal.

When making your choice for a CPA firm, make sure that when you assess the proposals, it is not solely based on price, but on the work they will be doing, as well as the service levels they will be committing to. This is important – because the reason you left your previous firm in the first place was not because of price, but because of service.

If you’d like to ask Samuel a question, click here.

November 23, 2011 By Samuel Dergel Leave a Comment

Quoted in: The Small-Firm Path to CFO

Dear Readers,

I was quoted in an article that appeared in CFO World by Lisa Yoon that was released this morning. Below is the part of the article in which I was quoted. For the full article, please follow this link. As always, your comments are appreciated and valued.

Wishing you all a very Happy Thanksgiving,

Samuel

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Some Exceptions

For his part, though, CFO recruiter and consultant Samuel Dergel has a more qualified view. Certainly, more smaller firms “are getting more sophisticated” in assessing their need for a CFO, he agrees. “But not all.” Says Dergel, “It depends on the ownership structure.” He notes that manufacturing companies with sales of $50 million or more, for example, may well need for finance chiefs. But at private companies where much of the decision-making is done by the founder, there’s often a tendency to resist turning over the reins to someone else.

From the rising finance star’s perspective, many times “a small-company CFO position will not be helpful” on the bath to a big-company top job, he adds. And in general, a better tack might be to go first to the finance organizations of large companies, and use that experience to move forward toward CFO skills.

Meanwhile, he notes, if there is going to be a jump from a small-company CFO slote to a large-company one, it is best to stay within the same industry, he says. In general, when small businesses hire CFOs, “they usually take the path of least resistance,” he notes. “It’s hard for a small- or midsize company to give you a chance to grow as a finance leader if you don’t have same-industry experience.”

November 22, 2011 By Samuel Dergel 6 Comments

Why can’t finance and HR just get along?

This blog is a Guest Commentary written by me that appeared in Canadian HR Reporter on November 21, 2011. You can view a copy of the original article here.

Why can’t finance and HR just get along?

Finance and human resources have more in common than they care to admit – here’s how HR can improve its relationship with the CFO

I have been fortunate enough in my career to deal with organizational leaders in finance as well as human resources. For as far back as I can remember, I have noticed the friction that exists between these two groups and it has always fascinated me.

Finance and HR have more in common than they care to admit. The CFO’s role is to manage the financial assets of the company while the CHRO is mandated with managing the company’s human capital.

Both finance and HR are important support functions for any enterprise. However, neither finance nor HR drive revenue — they support it. In organizations where finance and HR work well together, they provide solid support to corporate objectives.

The biggest point of this interdepartmental friction comes from the intersection of their interests — HR deals with people, whose costs are usually the largest expenditure in a company, while finance is mandated with managing costs.

So why can’t finance and HR work well together? The truth is they can — it just takes effort from both sides to make the relationship work.

Here’s a rundown of what HR professionals can do to improve their relationship with finance:

Communicate: A CFO needs to understand what you do, how you do it and how you can help her. HR needs to be proactive to understand the needs of the CFO and work together with her to provide appropriate solutions.

It sounds simple yet how many HR groups really have an open and effective line of communication with finance?

Treat finance like a business unit: A successful CFO needs a strong team to support him to meet objectives. As an HR professional, you understand what is involved in building, developing and sustaining a solid team, so help the CFO in his quest for having the most efficient and effective team. This is one sure way to get on the same side as the CFO.

Give finance what it wants: In the spring, my firm conducted an online survey of 40 CFOs to find out if they were willing to commit internal resources for the development of their finance teams.

More than one-half (56 per cent) said they want support for succession planning, 83 per cent want help with talent management and 94 per cent want a more effective and efficient structure for their finance team. We asked them if they were willing to invest resources in these areas and the majority of them said yes. Who can better solve these challenges than human resources?

Finance training: Ask your CFO to help develop the financial literacy skills of the HR team. Imagine the synergy that can exist internally when your team better understands the financial aspects of the business, how it applies to the corporate objectives and what it means within the context of delivering strategic and tactical HR functions.

These are just some examples. To make the relationship with finance work, HR needs to take steps to build relationships — with the focus on adding value.

Do you have examples of how you were able to bridge the divide between finance and HR and have a positive impact on your organization?

November 22, 2011 By Samuel Dergel Leave a Comment

Ask Samuel: I’ve been approached for another opportunity

Dear Samuel,

I am a CFO that is very committed to my employer. Recently, I was approached by someone I know to consider a CFO role with another company.

The new opportunity sounds challenging, and right up my alley. I have been with my current employer for 4 years, and I think I’m ready for a change.

On the downside, the new CFO opportunity pays less than I am currently earning. Also, my current employer is beginning to face some tough times and I don’t want to leave them in a bind.

What should I do?

Torn in Toronto

Dear Torn,

You are in the ideal situation for a considering a job change. As opposed to being unemployed and looking for a job, here is an opportunity that has found you (you didn’t go looking for it) while you are working and busy. There are people I speak with that would envy your current situation.

That being said, your choice is tough. Giving up the known for the unknown can be a very stressful and difficult choice.

While money is important, you need to look at the situation without the compensation aspect. Once you have all the information you need, then you can add the compensation piece back into the equation to see if it will make a difference.

You need to put your CFO hat on and get as much information you can on the company that is pursuing you. Do your due diligence, as you would for any company you would be considering acquiring for your current employer. Really learn what you could be getting yourself into. True, you will not know everything, but you didn’t get to become CFO by not asking the tough questions and getting the right information you need to make important decisions.

Now that you have all the information, ask yourself the following question:

If I was unemployed, and I had these two opportunities to choose from, which would I choose?

Now that you have this answer, add the compensation piece back into the equation and ask the same question.

If you’ve decided to leave your current employer, you need to prepare yourself for what could be a difficult conversation. As part of your conversation, you should recommend to the CEO that they use a search firm to hire their next CFO, and that you would be happy to speak with the executive recruiter to help them help the company hire a very good replacement CFO.

Good luck with the decision process. If I can help any further, email me and we can talk.

Samuel

If you’d like to ask Samuel a question, click here.

November 16, 2011 By Samuel Dergel 3 Comments

Trend? Increasing numbers of CFOs are hired internally

This blog posting by Marcus Beale of Odgers Berndtson in the UK caught my attention – The growing trend towards Internal FD appointments. (For those that are unaware, FD is short for Financial Director, which is the term used in the UK for CFO).

While Marcus notices this as a trend in the UK, I am led to believe that this is also common in the United States as well.

Since starting our CFO Moves Blog over 3 months ago and tracking CFO Movement (hires and unhires) across America each week, it is evident that companies in the US are hiring from within in many instances.

As 2011 comes to a close, we will be providing you with some statistics on the CFO market that we have gleaned from our CFO Moves Blog. Want to stay on top of these movements? Sign up for the CFO Moves Blog.

November 15, 2011 By Samuel Dergel Leave a Comment

Ask Samuel: How can I accomplish more and firefight less?

Dear Samuel,

I have been reading your blogs and been following your advice. I have laid out my Vision as to what I want to accomplish as CFO, identified the relationships I need to build, and prepared an action plan to accomplish my objectives. I have also started delegating more of my work to my team, and have implemented a development plan to make my team more effective.

Yet I still feel that overwhelmed.

How can I accomplish more and firefight less?

Overwhelmed in Overland

Dear Overwhelmed,

First of all, I want you to look in the mirror and congratulate yourself. You have accomplished a lot on the road to becoming a Better CFO.

I brought your question to the members of the CFO Lounge, a LinkedIn Group where CFOs like yourself can feel comfortable discussing concerns with peers in a relaxed environment. You can find out more about the CFO Lounge in my previous blog post – The Lonely CFO. I invite you to join the CFO Lounge to read what your peers had to say about your challenge.

You have done so much to move yourself forward. While you have done a lot to move yourself forward, I believe you could benefit from planning your days. Just like you’ve prepared an action plan, you need to plan your daily schedule. Failing to plan is planning to fail.

Just because you’ve prepared a schedule, doesn’t mean that you cannot change it as needed. But before you do, you need to ask yourself the following questions:

1) Does this need to be in my schedule?

2) Does it need to be done by me? (Can someone else do it?)

3) Does it need to be done now?

Many times we are attracted to do the ‘easy’ work – when we look back at the end of the day we can say that we have accomplished. While you may have accomplished a number of (lower level) tasks, you may not have accomplished what you needed to. This is when your frustration will kick in.

Avoid frustration by spending time planning your day and your week. Block off the time to get things accomplished. If email or phone calls distract you, close your email and turn the ringer off on your phone (all your phones).

You have control over what you can accomplish. You need to take control of your work, rather than letting it take control of you.

Good luck,

Samuel

If you’d like to ask Samuel a question, click here.

November 10, 2011 By Samuel Dergel 2 Comments

How do you replace your CFO?

Last week, I wrote about how you know it is time to replace your CFO.

So how exactly does a company hire their next CFO when their current CFO is still in his or her chair?

There are 2 choices.

1) Let the CFO go.

2) Look (confidentially) to replace the Chief Financial Officer while they are still employed.

Let the CFO go

I recommend letting the CFO go before replacing them, if:

1) The CEO and the Board has lost confidence in the abilities of the CFO, and

2) There is a senior finance executive (or sometimes, an experienced Board member) in the company that can take the reins on an interim basis.

Be aware that when performing your new search for your Chief Financial Officer, prospective CFO candidates will want to know what happened. I would recommend disclosing as much as you can, because CFOs can smell fertilizer from far away.

Perform a confidential CFO Search

A confidential search for a CFO is difficult because most CFOs pretty much know all the important details of what is going on in the company.

You can choose to do a Search for your Chief Financial Officer without a using an executive search firm. It is not a good choice, but it is still your choice.

I highly recommend using an executive search firm. (I always recommend working with a search firm when hiring a CFO, and even more so in this sensitive situation.) A reputable search firm understands the complexities of working on a confidential search, and knows how to attract candidates to you without word getting out on the street, or getting back to your current CFO.

One important issue to address when using a search firm is how you pay your retainer for this search. As the CFO may be one of the people signing cheques in your organization, the last thing you would want is the CFO to see an invoice for a CFO Search.

November 8, 2011 By Samuel Dergel 3 Comments

Ask Samuel: My finance staff doesn’t deliver

Dear Samuel

I was wondering if you can help me with some thoughts on a situation I continually face.

I would really like to be able to focus on adding value to the business, both from a longer term strategic view as well as helping the company make the right decisions on an ongoing basis.

I am finding however that I am spending too much time reviewing and correcting the work of my team. Sometimes I find myself having to do the work that my team was supposed to do because of vacations or unplanned time off.

How can I get beyond this?

Frustrated in Fresno

Dear Frustrated,

As CFO, you are only as strong as your finance team allows you to be.

A smooth functioning finance team does not happen by itself. It requires:

– knowing what work needs to get done

– preparing an org chart that allows you to be properly staffed so that the work get done, right, the first time, on time.

– staffing your team with the appropriate people

– replacing poor performers and people that do not have the skills you need

– having a talent development plan to ensure the people on your team continue to develop.

Not only do you need to make sure your team is well prepared to support you, you also need to know what your vision is as CFO, and what your personal action plan is to make it happen.

Having a sounding board, like a CFO Coach, can certainly help you stay on track to ensure you develop your team properly, as well as help you prepare your vision and action plan.

If you’d like to ask Samuel a question, click here.

November 3, 2011 By Samuel Dergel 2 Comments

Is it time to replace your CFO?

There have been lots of topics online recently about the need for a CFO. Some of these articles have been referred to in my previous blogs. I recently realized that these articles and blogs talk only about bringing a Chief Financial Officer on board, but do not about replacing a CFO.

I’m very pro-CFO. I am close with a lot of CFOs and know many, many more. So why would I write a blog about replacing the CFO?

When a CFO is hired, they are the right fit for the job. (Unless a company hires the wrong CFO). However, change is a constant. Companies change. Industries change. Economies change. Not only is change a constant of our current business landscape, but change is happening quicker than ever. So in a very short period of time, the CFO that was hired and right for the job may no longer be the right person if he or she is not changing and growing along with the company.

For the CFO that wants to continue to be successful with the company they are with, they need to constantly challenge themselves to grow and make sure they can meet the needs of the company as it grows. Coaching can provide support and guidance towards a path of continuous improvement for the CFO.

What I see in many cases is that a CFO gets lazy. Rather than continue to grow, these CFOs focus on their abilities and get stuck in the past.

So, when should a company replace their CFO?

1) When the company has changed, and the CFO hasn’t.

2) When the major investors lose confidence in the CFO.

3) When the company is getting ready to change, and the current CFO does not have the skills and abilities necessary to be a leader for that change.

Some of my CFO Search mandates are driven by these factors. The remainder of my Chief Financial Officer Searches are due to

1) a CFO leaving the company by their own choice

2) a CFO that was asked to leave the company

3) the company hiring their first CFO.

So how exactly does a company hire their next CFO when their current CFO is still in his or her chair?

Stay tuned (and click “Sign me up!” on the right of the blog page to get Samuel’s CFO Blog delivered to your email inbox as soon as it’s published).

November 1, 2011 By Samuel Dergel 2 Comments

Ask Samuel: Negotiating coaching for my new job

Dear Samuel,

I am about to get a job offer as CFO. Thank you for your blog on Negotiating your CFO contract – I am finding it very useful as I’m going through this process.

I have networked my way to this opportunity, and I think it’s a good fit for me. In the last steps of this hiring process, I would like to ensure that I not only deliver value to my new employer, but also have the ability to access coaching to help me become the best CFO I can be.

Do you have any guidance on how to make sure I can get the approval for a budget for an Accelerated Transition Program and CFO Coaching?

Almost There in Almont

Dear Almost,

What is most important at this time is to secure an offer of employment from the company. I have seen too many instances where CFOs were about to get a job offer that never materialized.

Once your next employer is serious about bringing you on board, you can discuss other key terms for your employment.

Regarding an Accelerated Transition Program, it is important to ask the following question to your new employer as you finalize your offer of employment: “What support do you offer executives to ensure a successful transition into the company?” If you get a blank stare, you might be on your own. If however you get some recognition by your employer that executive job transition is important, you may have room to negotiate this program. If you cannot get official transition assistance, you should at least read the book I’ve recommended and apply it for yourself and your new company.

When it comes to the subject of coaching, some CFOs have mentioned to me that they are uncomfortable bringing up the concept with their new (or their current) employer.

Like any great idea that others may not understand right away, it is important that you understand the perspective of the decision maker before you present them with your great idea.

The easiest person to convince that you can get great value from a Coach is your CEO, IF they have a coach themselves.

Companies that understand the need for professional development and readily invest in these activities for their key people are solid candidates to pay for CFO Coaching.

Regardless, I recommend that new (or current) CFOs should ask for approval of an annual budget amount for their professional development that can include conferences, training, books as well as coaching. Getting a budgeted amount approved upfront allows you the freedom in how to best spend these professional development dollars. This gives you the flexibility to choose your own areas and methods of development while not having to go back again and again for permission.

Remember, you’re the Chief Financial Officer. Your negotiation skills are being tested at this critical junction. A great negotiator gets what they want while the other party gets what they want as well. As you finalize the conditions of your next CFO role, keep this in mind.

If you’d like to ask Samuel a question, click here.

Archives for November 2011

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