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Different companies need different CFOs

© Copyright 2013 McKinsey & Company

CFOs are capable people. Sometimes, when a CFO is actively looking for their next opportunity, they are less selective in the type of company or CFO role that they choose. When they make a career choice that is not appropriate for them, they can spend years trying to repair the choice they made.

2013 has just started, and already there is new CFO oriented research that can help CFOs and the companies that hire them. Today’s CFO: While profile best suits your company?  (Note: there is no charge for the report, but registration is required to download) by McKinsey & Company, identifies four profiles of today’s CFO:

    1. The finance expert
    2. The generalist
    3. The performance leader
    4. The growth champion.

The McKinsey report, authored by Ankur Agrawal, John Goldie, and Bill Huyett, identifies which companies can best benefit from each of these profiles.

Agrawal et al. do realize that most CFOs do not fit precisely into each of these profiles, and have provided questions that CEOs and Boards should ask when beginning their search for their next Chief Financial Officer.

As an executive search specialist helping companies hire their next CFO, I find the report clear and concise. Reading this report can help CFOs better position themselves for the remainder of their career, and help CEOs and Boards hire the right person they need in the CFO chair.

What type of CFO are you?

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Top 12 Samuel’s CFO Blogs of 2012

20132012 sure has been an interesting year.

And I’m looking forward to 2013! I’m looking forward to:

  • Working with my clients at Stanton Chase and providing them with excellent service and value in retained executive search.
  • Staying close to CFOs in my network, and continuing to add value to their businesses and careers.
  • Continuing my blogging, both here and at CFO Moves. I find it humbling that I have people that are not only interested in what I have to say, but have signed up to ensure they don’t miss any of it.

It is customary as the year turns to a close to look back at the previous year.

Blogging is great, but sometimes people can miss out on some very valuable insights or content. So, to make sure you didn’t miss what other people thought was worth reading, I would like to share 12 of my most popular CFO Blogs in 2012.

12) Negotiating your CFO Employment Contract

11) 5 Steps to Building your Finance Dream Team (and 3 tips on how to get it done)

10) The Value of “Thank You”

9) 5 Reasons why Talent Development is a Challenge for CFOs

8) Road Map to Successful CFO Relationships

7) 5 Most Popular Names for CFOs (2012 Edition)

6) The First 90 Days of a New CFO

5) 1 key difference between your LinkedIn Profile and Resume

4) Dear CEO & Board: You can’t afford to hire the wrong CFO.

3) Investor Relations for the New CFO – 6 Steps for IR Success

2) 4 Reasons you should use an Executive Search Firm when hiring your CFO

And the most popular of Samuel’s CFO Blogs for 2012 is:

1) How a Recruiter sees a Candidate (You may not like the analogy)

If you like these blogs and want to ensure you don’t miss any of them, please click on the SIGN ME UP! button on the right.

Happy Holidays and all the best for an amazing 2013!

Samuel

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Why are 87% of CFOs male?

I asked myself this question last week in preparing my blog 5 Most Popular Names for CFOs.

The overwhelming majority of CFOs are male. The sample that I used, with over 1,100 names of CFOs hired and promoted over a ten month period, is significant enough to be considered a close representative of the reality that exists in the CFO World in the United States. (You can follow our weekly edition of CFO Moves by signing up on the CFO Moves Blog page).

In essence, this male domination cuts across most senior executive positions and board roles. CFO roles are not alone in this matter. I’m certain that many of the reasons CEOs and other senior executive roles that are mostly male apply to CFOs as well.

When I look back to my undergraduate years, my classes were well balanced between males and females. Perhaps there were even more women than men at the time.

So what happens between graduation and career success?

Some would say that ‘life’ gets in the way. Some would say that it is more difficult for a woman to have a career and a family than men. Some would say that the “Boys Network” makes it difficult for women to be successful at an executive level. Some would say that women are more interested in work/life balance than men.

I don’t know if these are good reasons to explain the difference or not.

I do know that when I’m looking for a CFO candidate (or any executive candidate) for my client’s search, I’m looking for the best people. Best experience. Best ability. Best skills. Best fit. Period.

Cookie Cutter

I was recently looking at a company’s Management web page. I didn’t know the people or the company well, but at first glance, it was hard to tell the difference in the photographs between the executives. They looked ‘cookie cutter’. I don’t know much about the company, but I got the impression that they were not a diverse crowd. I thought that not only did they look the same, they probably thought the same and may even have had similar backgrounds and experiences.

What is Diversity, and is it Profitable?

A company that is diverse in background and experiences can allow it to be successful. You can read more about how Diversity is Profitable, written by my colleague Robin Adams from Stanton Chase International in Hong Kong.

Diversity at the executive level includes people from different backgrounds and cultures. It also includes having more women.

I always recommend that clients hire the best person for the role they are looking to hire. I also always recommend that clients consider diversity in their search to get the best out of their executive team.

My clients should be hiring the best person for the CFO chair (or any executive position). Sex, color, ethnicity, religion and orientation should never be reasons not to hire the best person.

What do you think?

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Who is valued more? Finance or HR?

Sounds like a silly question. Finance and HR functions are necessary organizational support functions. Companies require both Labor and Capital for success. Yet turf wars and egos impact many companies and the individuals that work in them. (Read: What do CFOs want from HR?). How a CFO manages their relationship with Human Resources is very important to their success (Read: Road Map to Successful CFO Relationships).

Interestingly, my recent blog on Human Capital Reporting Standards shows a new intersection where Finance and Human Resources can work together, building on each other’s strengths.

If this subject interests you, a recent article in CFO.com by John Boudreau called “Does Finance Play Second Fiddle to HR?” is worth reading. In his article, Boudreau states that his research shows that HR feels that their work is more strategic than Finance feels.

To Boudreau’s credit, he does realize that the results of his research does not make sense compared to what would be expected, and provides answers as to the reasons for the difference in how HR and Finance feel about being strategic.

Who’s work is really more strategic? If you want to know the answer, ask the CEO and ask the Board. Until objective research can be done using the approach I mentioned, let`s look one subjective criteria.

Who becomes CEO? If HR was really more strategic than Finance, Vice Presidents of Human Resources (or as we see this title being used more – CHROs) would be promoted to CEO of organizations. While tracking CFO Moves, I see CFOs that get promoted to CEO, either on a permanent or interim basis. I haven`t seen many VP HRs becoming CEO.

Who do you think is more Strategic – Finance or HR? Why?

Filed Under: HR

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Why work with Stanton Chase to hire your next CFO?

CFO Search is a topic that I am passionate about, and have written about before touching on topics such as:

4 Reasons you should use an Executive Search Firm when hiring your CFO

When hiring a CFO, is LinkedIn the place to look?

How do you replace your CFO?

New CFOs and the Entrepreneurial CEO – How to make it work

CEO and Investors: Are you ready for your First CFO?

(You can read all my CFO Search related topics by clicking on this link.)

You will notice that in these blogs I discuss why you should be using an executive search firm to hire your Chief Financial Officer. I have not, to date, written about why you should work with Stanton Chase to hire your next CFO.

I could list generic reasons here, but the reality is that as a company looking for your next Chief Financial Officer, you have challenges in your search that are specific to your situation.

This is where the CFO Search Team at Stanton Chase can help.

If you are looking to hire your next CFO, before you make your decision on an executive search firm, you should consider Stanton Chase.

For more information on Stanton Chase’s CFO Executive Search Practice, Process and Team, complete the form below to receive a copy of our brochure.

Filed Under: Uncategorized

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Announcement: To serve you even better!

Collaboration, teamwork, flexibility, and communication are among the traits of successful business enterprises and they propel us to new heights – personally and in the corporate arena.

While my goal when founding Dergel CFO Search & Consulting was to focus on serving CFOs while remaining a sole practitioner, I have shifted to a team environment by joining one of the world’s leading retained executive search firms – Stanton Chase International. I have learned a lot during the last six months, and the key point in this move is that I’m convinced that I can maintain the one-on-one relationships with you – my clients – while taking advantage of the teamwork, entrepreneurial spirit, and global reach of Stanton Chase.

The international reach of this organization along with a collegial atmosphere will give me the opportunity to reach out worldwide for candidates while getting input from the leading search professionals in the world. With 75 offices in 42 countries, Stanton Chase will lead your organization to new levels of success. While I have and will specialize in the CFO sector, I can now deliver candidates in virtually every C-level sector.

Connecting with Stanton Chase came through a Linkedin overture from Paul Herrerias, the managing partner of the Stanton Chase/San Francisco office. After an initial “thanks but no thanks” response, Paul and I continued to stay in touch, built trust and rapport, resulting in my current position of Director with his office.

The decision to join Paul was firmed up when I contacted him for some assistance with a search. He was forthcoming, cooperative, and experienced. The result was a level of trust that has now blossomed into a partnership.

What started as an online social media relationship is now a “face to face” working relationship. Please be assured that my social media activity will continue to provide you with the cutting edge information that you have been receiving for more than six months.

Here are some highlights:

    • At last count, I have posted 70 Samuel’s CFO Blogs and started a weekly CFO Moves Blog, with a combined total of over 17,000 page views.
    • Over one hundred and forty subscribers have requested to receive my new blogs by email as they are published. (You can get them too – Click on the Sign Me Up button in the right column).
    • The Wall Street Journal’s CFO Journal and CFO World sought me out for my input on news stories about CFOs, and I was asked to write an op-ed piece for Canadian HR Reporter.
    • I started a LinkedIn Group called CFO Lounge that has been very effective in garnering the support and input of CFOs from diverse industries and geographies. I am having conversations with hundreds of CFOs, many of whom expressed appreciation and positive feedback of the content and advice posted.

I look forward to a continuing relationship with you,  sharing the expanded resources now at my fingertips with Stanton Chase, and a successful 2012 for all!

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4 Reasons you should use an Executive Search Firm when hiring your CFO

As CEO, Board Member, or VP of Human Resources of your organization, you may find yourself in a situation where you need to hire a CFO. Some companies take the decision to perform a search for their next CFO by themselves. This is a mistake. In past blog postings, I have detailed the reasons you cannot afford to hire the wrong CFO, asked if it’s time to replace your CFO and how do you replace your CFO?

When you do a search for a Chief Financial Officer on your own, it is a misnomer to call it ‘search’. What you are really performing is a ‘look’. To find a needle in a haystack, ‘looking’ will not suffice – you need to do a proper, methodical search. And just because you find a needle, it doesn’t mean that it will be the right needle you need to get the difficult job done.

Searching for your CFO requires that you have the resources, network and capabilities to succeed. An Executive Search Firm that specializes in the Chief Financial Officer,

• Understands what you need,

• Knows how to find the CFO you need,

• Actively engages in a methodical and detailed search,

• Has the experience necessary to get your next CFO interested in your opportunity,

• Is intimately aware of the market and ensures that negotiations are fair to both parties, and

• Works after your CFO is hired to ensure that they have the right support in place to succeed.

When you look to hire a CFO on your own,

• You have not done a proper Needs Assessment. Do you really know what knowledge, skills and abilities your next CFO needs? Are you making an assumption, or has an expert made you think more about what you really need?

• You are missing the best CFOs. CFOs that are happy in their job are too busy to be looking at job postings. Without an active search, done by people experienced in gaining the attention of a busy CFO, you are missing what could be the best candidates.

• You are tapping in to your network. This is a good thing. Except does your network really have access to the best CFO that you need? Can they attract the right CFO for your needs that is currently working and happy at another company?

• The CFO you hire will not be a match. You’ve hired a square peg CFO to fit your round hole.

If you have the important responsibility of being involved with hiring your organization’s next CFO, it is important to be honest with yourself. If you are not using a Search Firm for hiring your CFO, you are probably resigned to the fact that any CFO will do.

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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.

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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.

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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).

Contact Information

You can reach Samuel by:

Telephone
San Francisco: +1 (415) 738-2070
Montreal: +1 (514) 907-0925

Email: samuel@dergelcfo.com