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).