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You are here: Home / Archives for CFO / CFO Consulting / Succession Planning

February 4, 2014 By Samuel Dergel 4 Comments

The Sleepless CFO

Being Chief Financial Officer can be stressful. The responsibility that the CFO bears for the company they work for is not a 9 to 5 job. Most CFOs I have met and spoken with agree that the role takes up most of the hours they are awake, and even some of the hours they should be sleeping.Couple In Bed With Husband Suffering From Insomnia

So what keeps the CFO awake in 2014?

To find out, I reached out to my CFO Advisory Group. My CFO Advisors were instrumental in providing me with relevant and realistic input as I wrote my upcoming book. Guide to CFO Success: Leadership Strategies for Corporate Financial Professionals is published by Wiley & Sons, and will be available at all fine bookstores end of March 2014.

I recently asked my CFO Advisors what top their top 3 concerns that keep them awake at night. After reviewing their responses, here are the top 3 current issues that are keeping CFOs from getting a good night sleep.

#3 – Team

CFOs are worried about their team. Some CFOs are concerned about how to continue to grow and motivate their staff. Others are losing sleep worried about retaining the staff they need or dealing with the aftermath of unforeseen resignations. There are some CFOs who are unsure of how they will succeed in acquiring and developing the new talent they need to make their team even better.

Regardless of the type team based challenges facing the CFO, they know that they can only be successful if their team is strong enough to support them. When the finance team is not giving the CFO what she needs to succeed, this can cause anxiety and sleeplessness for even the most experienced CFO.

#2 – Growth

Growth can be an issue for many CFOs. Or, rather, the lack of growth is the real issue. Most for-profit companies define success as making more money, and for the Chief Money Counter, growth drives corporate financial success. It is the Key Performance Indicators of this growth that informs the CFO if the company will reach their targets or not.

When companies are continually growing their revenue and profit, all is good. Few companies though, do this regularly and consistently. Financial success for most organizations can only come when sales rise and profitability continues an upward trend. For the CFO, who knows they are king when the results are good, and the court jester when the results aren’t, losing sleep over growth is understandable indeed.

#1 – Cashflow

Cash is King. The ultimate responsibility of whether there is enough cash to do what needs to get done rests with the Chief Financial Officer (even when their team does the technical work). CFOs are concerned with cash from all sides, whether they are collections issues, access to capital and lending or how to make decisions about allocating cash in the most effective way.

Cash is, by far, the most common issue that is keeping my CFO Advisors awake at night. What is interesting about this response is that cash was a concern for most of my CFO Advisors, yet they all come from different industries and company sizes. It seems that cash issues are a challenge in most, if not all companies. While the type of cash challenges will certainly change based on the situation facing a company and its industry, most companies, and therefore most CFOs, are anxious and losing sleep over cash.

What is keeping you awake at night?

Filed Under: books for CFOs, Sales Department

January 7, 2014 By Samuel Dergel 4 Comments

CFOs, Are You Doing Your Job?

As an executive search professional that focuses on the office of the CFO, I am involved with the hiring of Chief Financial Officers for companies. Unless I am working to help a company hire their first CFO, the mandate I have is to replace a current CFO or a Chief Financial Officer that has left.

While only having the time to work on a handful of CFO searches at a time, you may know that I track CFO movement on my CFO Moves Blog. When I combine my personal direct involvement with helping companies hire their Chief Financial Officer with my tracking of hiring and unhiring of CFOs across the US, Canada and the UK, I see many CFO getting replaced.

You can understand that this a topic that interests me. And if you are reading this, the topic probably interests you as well.

I came across a very interesting academic working paper, CFO Succession and Corporate Financial Practices, authored by Ellen Engel, Feng Gao and Xue Wang, that was published in October 2013. This paper looks at reasons and financial reporting consequences of CFO successions. The document is a properly researched academic paper, and makes for an interesting read if you are academically inclined.

Here is the Abstract of the document which summarizes the findings of the research:

We examine the determinants and financial performance consequences of Chief Financial Officer (CFO) successions. We argue that if internal monitoring mechanisms are effective, there should be a greater probability of forced CFO departures in firms with poor financial reporting and capital management performance, and resulting improvements in financial practices following forced turnovers. We test these hypotheses over the period 2002 to 2008. We find that

(1) the incidences of accounting restatements and debt covenant violations are significantly associated with the probability of forced CFO turnovers;

(2) firms are more likely to hire successor CFOs from outside the firm following accounting restatements, especially those due to irregularities;

(3) the hiring of outside CFOs is associated with improved financial reporting quality.

Further, these findings are concentrated in firms with majority independent boards, suggesting that outside directors play a greater role in monitoring CFOs than inside board members.

These findings are not surprising.

When CFOs don’t do their job, they get fired and replaced.

As CFO, are you doing your job?

Filed Under: Ellen Engel, First CFO

August 14, 2013 By Samuel Dergel 1 Comment

CFOs: IPOs are coming back. Are you ready?

Initial Public Offerings were hot commodities in the early and mid oh-oh’s. Most finance leadership reading this blog remember those days well, and some of you did very well financially because of it.

The recession that occurred towards the end of the last decade put a stop to that IPO train. Companies needing capital for growth had to look elsewhere, and many companies were unable to succeed because this driver of growth dried up.IPO (Initial Public Offering)

For the past few months I have been hearing the rumble of the oncoming IPO train. A number of CFOs I have spoken with in the past months have shared with me that they are being given the strategic responsibility to be ready for when the IPO market comes back. There is a feeling of cautious optimism that this catalyst for economic growth will soon be back.

How can a CFO prepare for the talent challenges to come?

One of the biggest challenges that an uptick in the IPO market will face is that there is a small pool of talented mid-level professionals with relevant and recent IPO experience. The amount of work needed to be IPO ready is significant. When the IPO dam breaks, many companies will be rushing to get their IPO done. If the talent challenges are not planned properly, companies will have to be more reliant on expensive external resources (think audit and law firm rates). Companies who properly plan for their talent needs in advance will be able to go public earlier, which could be very beneficial as well.

Another significant challenge to companies that are currently private is that the cost of being public is expensive. A CFO needs to ensure that they have the leadership and professionals on staff that can deliver the quantity and quality of timely and correct information necessary to be considered a well-run public company. CFOs bear the burden when their finance team is not able to deliver accordingly.

CFOs who have been mandated to prepare for an upcoming IPO by their board need to have a talent plan to ensure they can meet their needs for going public and staying public. This plan for talent acquisition, development and retention is necessary to balance the costs of going public and staying public.

This talent planning business will not be easy. But those that start planning now will be at an advantage.

CFOs, get ready. You could be in for a very bumpy ride on the IPO Express.

Filed Under: CPA Firm, Investors, Investors, Investors, Public Company, Risk Management, Risk Management

May 30, 2013 By Samuel Dergel Leave a Comment

VIDEO: Webinar Presentation – CFO Succession: The Right Way to Grow your Company’s next CFO

On May 23, 2013 I presented this Webinar on Proformative.

To get more information on this presentation, please view this blog.

[youtube http://www.youtube.com/watch?v=55pbBzKiojU&w=480&h=360]

Links referred to in this presentation:

    • CFO Moves
    • Blog: Why do CFOs Leave?
    • Blog: CFOs: Do you want to become a Controller? This CFO did just that.

If you have any questions on CFO Succession, please complete the form below and I will be pleased to get back to you.

[contact-form subject='[Samuel%26#039;s CFO Blog’][contact-field label=’Name’ type=’name’ required=’1’/][contact-field label=’Email’ type=’email’ required=’1’/][contact-field label=’Question for Samuel on CFO Succession’ type=’textarea’/][/contact-form]

Filed Under: Assessment, Board, Build your Finance Team, CEO, Guide to CFO Success, Guide to CFO Success, IPO, IPO, Wiley, Wiley, Youtube

May 1, 2013 By Samuel Dergel 5 Comments

Webinar – May 23, 2013 | CFO Succession: The Right Way to Grow your Company’s next CFO

Join me on May 23, 2013 as I present a Webinar on the following topic:Webinar - CFO Succession

CFO Succession: The Right Way to Grow your Company’s next CFO

This session is graciously hosted by Proformative, and there is no charge for attending this seminar. To sign up, please click on this link.

Overview

Chief Financial Officers (CFOs) know that they will not stay in their current role with their current company forever. The CFO needs to ensure that his or her team has the right talent that can be called upon to replace them when they eventually leave the company (or the role of CFO). Strong CFOs also know that they are only as strong as the weakest leader on their team. This session will discuss the right way for the CFO to attract, retain and develop financial leadership talent for their team, while ensuring that they are setting the stage and preparing for their own eventual succession.

Learning Objectives

After attending this webinar you will be able to:

    • Understand why your success depends on having the best possible leadership talent in your finance team
    • Learn how to identify which areas to develop your finance leaders for future success
    • Become aware of the key components necessary to attract, retain and develop your company’s next CFO and other future finance leaders

CPE Credits are available for this session. For further information, please see details in the “CPE Info” tab on the sign up page.

Filed Under: CFO Readiness Program, John Kogan, Leadership, On the Road to CFO, On the Road to CFO, The Strong CFO, Webinar

April 23, 2013 By Samuel Dergel 3 Comments

Quoted In: Why Strong CFOs Know Who Will Replace Them

Recently I was quoted in an article titled “Why Strong CFOs Know Who Will Replace Them” by Sarah Johnson on the Proformative Website.

Here are paragraphs where I was quoted.

“It’s not surprising a company like that has that kind of planning,” says Samuel Dergel, director, executive search, at Stanton Chase International. “Most companies do not.”

…

In fact, succession planning falls under CFOs’ risk management duties and their responsibility for business continuity, Dergel suggests. Just as CFOs have to ask “what if” questions about the viability of their company’s suppliers and credit risk, for example, they need to go through the possible scenarios for what would happen if they were incapacitated. “It’s the people who represent a company,” Dergel. “They are a key part, and if there’s instability in that, then the company is not stable.”

…

While talk about succession planning in the corporate world usually centers around the future of the CEO role, the CFO position deserves attention as well. “The CFO is an important figure in an organization. The more important they are, the more important it is to have a succession plan,” Dergel says.

At the very least, Dergel suggests, finance chiefs should – in addition to all their other duties – give the matter some thought.

To read the entire article, click here.

Filed Under: Media, Proformative, Proformative, Proformative, Quoted, Sarah Johnson, Sarah Johnson

March 14, 2013 By Samuel Dergel 2 Comments

Listen to: Samuel Dergel at Lunch with DriveThruHR, March 14, 2013

Listen in to my Interview with Bryan Wempen on DriveThruHR from earlier today.

Please feel free to share your comments, input and questions…

Thank you to Bryan and William Tincup for inviting me!
You can listen to the show in the player below or in iTunes.

Check Out Social Networking Podcasts at Blog Talk Radio with DriveThru HR on BlogTalkRadio
Listen to
internet radio with Drive Thru HR on Blog Talk Radio

Filed Under: Bryan Wempen, DriveThruHR, HR, HR, iTunes, Podcast, Podcast, Speaking and Training, Speaking and Training, Speaking and Training, Speaking and Training, William Tincup

January 31, 2013 By Samuel Dergel 13 Comments

Why do CFOs Leave?

What does it take for a CFO to move on in their career?

We asked this question to CFOs in January 2013 and had over 150 responses to this question.

Graph - Reasons for leaving

The responses shown in the graph give a good indication why CFOs leave.

What I found more interesting (and personal) was the detailed reasons given below.

    • Board decided they wanted a different profile CFO
    • Corporate consolidation/restructuring
    • Board forced new CFO, CEO resisted then succumbed, I was hired as new CFO, CEO made life tough for me, I offered resignation after 2 years.
    • No more personal growth potential
    • I resigned due to a desire to relocate to another state
    • I was with my former employer for twelve years as their CFO.  Owner’s son got married and needed a job.  The owner decided to give my job to his son.
    • Company changed direction in terms of exit strategy.
    • unsustainable business model
    • It was apparent that the foreign founders wanted to re-domicile the company to their country of residence, so I began evaluating other opportunities.
    • Disagreement over revenue recognition policy
    • moved management positions to a different city
    • After selling controlling interest to PE I did not adapt fast enough to PE requirements vs. family owned prior to sale.
    • Left to start a consulting practice.
    • Retired
    • Sold the Company
    • No opportunity for equity
    • Company moved HO to another country.
    • Internal restructuring, consolidation of back office functions
    • Lead the restructuring process with CEO, which transformed the company to service a specific market, eliminated all C-Level positions.
    • Get bored quickly
    • Was resigning regardless of another opportunity.
    • It’s complicated – but in essence, I was no longer effective as CFO there.
    • I did the restructuring and elected to leave due to lack of opportunity and company prospects.
    • Poor fit
    • Disagreement with CEOs strategy or lack of it…
    • New CEO (2 responses)
    • The wife of the president was involved in the company. she often disagreed with the president’s decision
    • Controlling interest taken by Venture Capital Firm who in turn brought in new BOD and New Executive Team
    • One of the partners was creating major issues as he wanted to significantly modify the business model. His disagreements were also with our lender, which was creating cash flow issues.
    • Various reasons not listed above. No longer felt like it was a fit for me professionally.
    • Under resourced
    • Interim CFO role

Interesting food for thought, isn’t it?

What do you think about the results of this survey?

Filed Under: CFO Poll, CFO Poll, CFO Research, CFO Research, CFO Research, Hire your Next CFO, Private Equity, Venture Capital

January 16, 2013 By Samuel Dergel 17 Comments

CFOs: Do you want to become a Controller? This CFO did just that.

Non-CFOs might think that CFOs are people that look backwards, not forwards. I speak with Chief Financial Officers every day, and I can tell you that they look are interested in moving forward with their careers. They want to improve, grow and succeed. They want their next career opportunity to be bigger, better and have more responsibility. Many CFOs want to be able to grow into the CEO role, and as I report each Monday morning in my CFO Moves blog, a number of CFOs do just that.

Cindy Kraft wrote a blog just yesterday called CFOs Really Can Move On and Up! which deals with how a CFO can position themselves for the CEO role. 

So this CFO Move last week really caught my attention. 

Courtesy of Xerox Corporation

Courtesy of Xerox Corporation

Luca Maestri, CFO of Xerox, let his company know that he would be taking a position with a new company. This is not an uncommon occurrence. 

He also informed his employer that he will be taking on the role of Controller at his new employer. This does not happen often. 

Now you need to keep in mind that the new employer is Apple. But it is not like he was working for a small company either as CFO. He was working for Xerox! 

So why would a CFO at one company become a Controller at another company? 

I have not had the opportunity to speak with Mr. Maestri about his decision. I’m sure he had good reasons. If Mr. Maestri was consulting with me about the move I would most probably tell him that I think it’s a great move. 

However, most CFOs are so focused on moving forward in their career and getting promoted that they often lose sight that the best opportunities for them may require ‘stepping down’ a little. 

Luca Maestri did just that.

As CFO, what can you learn from Luca Maestri?

Filed Under: Cindy Kraft, Controller, Controller, Personal Branding

December 20, 2012 By Samuel Dergel 2 Comments

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.
  • Working on my book for CFOs. Stay tuned!

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

Filed Under: All of Samuel's Blogs, All of Samuel's Blogs, All of Samuel's Blogs, All of Samuel's Blogs, All of Samuel's Blogs, All of Samuel's Blogs, All of Samuel's Blogs, All of Samuel's Blogs, All of Samuel's Blogs, All of Samuel's Blogs, Blog, Blog, Board, Board, Board, Board, Board, Board, Books, Books, Career Management, Career Management, Career Management, Career Management, CEO, CEO, CEO, CEO, CEO, CFO, CFO, CFO, CFO, CFO, CFO, CFO, CFO, CFO, CFO, CFO Coach, CFO Coach, CFO Coach, CFO Coach, CFO Coach, CFO Coaching, CFO Coaching, CFO Coaching, CFO Coaching, CFO Coaching, CFO Coaching, CFO Compensation, CFO Compensation, CFO Compensation, CFO Consulting, CFO Consulting, CFO Moves, CFO Moves, CFO Moves, CFO Moves, CFO Relationships, CFO Relationships, CFO Relationships, CFO Relationships, CFO Relationships, CFO Relationships, CFO Relationships, CFO Relationships, CFO Search, CFO Search, CFO Search, CFO Search, CFO Search, CFO Search, CFO Search, Chief Financial Officer, Chief Financial Officer, Chief Financial Officer, Chief Financial Officer, Chief Financial Officer, Chief Financial Officer, Chief Financial Officer, Chief Financial Officer, Chief Financial Officer, Confidential Search, Confidential Search, Confidential Search, David Calusdian, Executive Coaching, Executive Coaching, Executive Coaching, Executive Coaching, Executive Coaching, Executive Coaching, Executive Search, Executive Search, Executive Search, Executive Search, Executive Search, Executive Search, Finance Team, Finance Team, Finance Team, Finance Team, Finance Team, Finance Team, Finance Team, Great CFO, Guest Blog, HR, HR, HR, Human Resources, Human Resources, Human Resources, Investor Relations, Investor Relations, Investor Relations, LinkedIn, Negotiation, New CFO, New CFO, Social Media, Social Media, Social Media, Social Media, Successful CFO, Successful CFO, Successful CFO, Successful CFO, Talent Management, Talent Management, Talent Management, Talent Management, Talent Management, Talent Management, Talent Management, Team Structuring, Team Structuring, Team Structuring, Team Structuring, Team Structuring, Training and Development, Training and Development, Training and Development, Training and Development, Training and Development, Training and Development

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