Succession Planning - Samuel's CFO Website

November 2, 2012 By Samuel Dergel 6 Comments

2 Types of Knowledge Required for Career Success

I have a theory that there are 2 elements required for career success:

What you know – you are hired and compensated because you have excellent skills and abilities that are in demand and few others have.

Who you know – you have an ability to make things happen because people like you and trust you, people are willing to open doors for you and you are able to add value to yourself and others based on this ability.

Most people in the world that are successful use a combination of these two knowledge points. Some are more “What you know”. Some are more “Who you know”. Few are solely one or the other.

What is your knowledge mix for success?

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October 19, 2012 By Samuel Dergel Leave a Comment

The Quick CFO Turnaround

This is not about a CFO turning a business around quickly.

This blog is about the Quick Hiring & Unhiring of a CFO.

As someone that tracks CFO Moves every week across the country, I see this too often. Every time I see it, it bothers me, especially when I know that it could have been avoided in many cases. Here is one recently reported example of one Quick CFO Turnaround – Ulta Beauty CFO out after 6 weeks on the job.

An outsider will never really know the reason a person leaves their position. Like a divorce, there is the official story, the company’s story, the employee’s story and the real story.

That being said, here are some things that can be done to ensure CFO hires are done well, and can be successful over the long term.

Use an Executive Search Firm: You can read my previous post 4 Reasons you should use an Executive Search Firm when hiring your CFO.

CFO Readiness: Previously I wrote Are you Ready for your First CFO? The same Readiness that applies for a company’s first CFO applies when a company has had a CFO for a very long time and needs to change.

Onboarding: CFOs need to plan their Onboarding. My take on Onboarding is in blog The First 90 Days of a New CFO. As one CFO who went through a Quick Hiring & Unhiring told me recently “I wish I read the book before I accepted the job”.

Hiring for any executive level position needs to be treated seriously. Unfortunately, in too many cases, companies that do not treat their executive level hiring needs with the proper attention and resources necessary. This can end up doing serious damage to their company.

Many executives that are approached for career opportunities rely on their own business acumen to assess and accept career positions. When executives, CFOs included, are looking at career opportunities for themselves, they should know that they are minimizing their own career risk when the company they are being considering by is working with a reputable Executive Search firm.

CFOs: Has being hired by a company that worked with an Executive Search firm make a difference to your career?

September 20, 2012 By Samuel Dergel 8 Comments

5 Reasons why Talent Development is a Challenge for CFOs

Ever meet a CFO who wasn’t busy? I didn’t think so.

CFOs have lots of demands on their time. Unfortunately, when CFOs do not manage their priorities properly, they can end up with surprises.

As someone who has received calls from CFOs in a panic when a key person on their team has left, I can tell you that this happens too often.

If you haven’t seen my CFO Relationship Map, you should. A premise I have made time and time again is that a CFO needs to be able to manage all their relationships. (You may also be interested in reading my other blogs on the topic of Talent Management.)

Ensuring the success of the Finance Team is as important as meeting the demands of the CEO and the Board. Without a Strong Finance Team, the CFO will not be able to meet these demands.

I recently spoke with Mary Driscoll from APQC about their recently released results from their survey A New CFO Priority: Talent Development with a Focus on Soft Skills. This report , created in conjunction with EPM Channel, details how proactive CFOs are evolving their talent development programs so that Finance can excel at the strategy table.

(To view the report, you need to sign up with APCQ. You do not need to be an APCQ member to read their report.)

The summary findings of the survey are as follows:

There is a staggering gap between the potential value that the typical finance organization can deliver to its stakeholders and the value now being delivered.
The gap exists because finance is bogged down in transactional work and doesn’t have the time needed to produce meaningful analysis.
It is hard to add bandwidth because finance, in general, is not given the tools needed to increase productivity and free people from grunt work.
The toughest vacant positions to fill are for financial planning and analysis.
Finance people who are considered effective business partners tend to work for CFOs who have a strong commitment to professional training, including crucial soft skills such as persuasive presenting.

When I spoke with Mary Driscoll, she provided me with this interesting perspective. “Unfortunately, too many CFOs fail to make a commitment to the development of their finance talent. Many say it’s hard to devote time and budget to creating a sustainable program. Some, quite frankly, don’t see the point. But those CFOs are shooting themselves in the foot,” says Driscoll. “They’ll be sorry when the day of reckoning comes and top people walk out the door for lack of professional growth opportunities. All I can say to the CFO who lets this happen is ‘Shame on You!’”

Are you a CFO that has implemented a talent development plan of your finance team?

Do you need help with your finance talent attraction, development and retention?

August 23, 2012 By Samuel Dergel 4 Comments

The New CFO and your Finance Team: Who Stays? Who Goes?

Congratulations! You have been selected as Company XYZ’s new CFO. The selection process was long and difficult, and you have been chosen as the Chief Financial Officer of the Company.

The announcement has been made, and you have the opportunity to meet the key people on your Finance Team. Each leader on the Finance Team is apprehensive. They don’t know you. You don’t know them. How do you approach your new reports?

Before starting any new executive position with a company, I highly recommend that you read “The First 90 Days – Critical Success Strategies for New Leaders at All Levels” by Michael Watkins. I wrote about it here.

Meet your leaders, together and individually. Learn, listen and ask questions. Your Finance Leaders have a lot of information and knowledge. An open and respectful attitude will provide you with an understanding of the leaders themselves, the department and inter-departmental dynamics, as well as critical information you will need to get your job done and be successful.

But do make decisions. CFOs need to have a plan to succeed. The first 90 days are critical to putting the plan together.

Who should stay? Who should go? Figuring this out is a key part of your plan. You need clarity as to what your team should look like to accomplish your goals.

But beware. If you don’t decide who stays and who goes, it may be decided for you. You could end up losing the very people you want and need to keep. You need to act quickly and decisively to ensure you have the team you need to succeed.

Decide who stays.

Decide who goes.

Communicate your plan.

Decide on the type of person/people you need to bring on board.

Start the hiring process quickly and using the best resources to ensure hiring success.

Don’t delay.

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March 22, 2012 By Samuel Dergel 4 Comments

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

As CFO, you can be the best in the world (for your business), but if your team is not up to par, you and your company will suffer. A key foundation for a CFO’s success is their Finance Team (see bottom of my CFO Relationship Map). CFOs I have spoken with agree that A Strong CFO needs a Strong Finance Team.

How does a CFO build their Finance Dream Team?

By having a Talent Plan. Your Talent Plan needs these key components:

1) Vision. What do you want to accomplish as CFO?

2) Needs Assessment. What talent do you need to support you in attaining your CFO Vision? What are your needs today? What will they be in the future?

3) Team Assessment. Assess your current team critically. Do they, individually and as a group, currently have the knowledge, skills and abilities (KSAs) you need to accomplish Vision? Will your team be able to meet your needs in the future?

4) Hire, Promote, Train and Unhire. Once you know your what your needs are and what your team can deliver to you, you need to activate decisions by hiring and unhiring key people, as well as training and promoting those that can deliver.

5) Continuous Hiring. Having a continuous hiring plan is beneficial. (Read: When Should a CFO Hire?)

Sounds simple. Yet most CFOs I speak with agree that this is difficult to implement. With CFOs having so many things to get done, Talent Planning and Management takes too much time for most CFOs to put the necessary effort and focus into it.

Here are some tips on how busy CFOs can accomplish each component of their Talent Plan.

1) Advice & Coaching. Working with an internal resource (HR) or an external resource (executive search firm) can be very beneficial in putting your Talent Plan together – from Vision to Continuous Hiring. CFO Coaching in particular can allow you the resource to become a better CFO while preparing your plan to become one. (Read: CFOs: 5 Reasons why you need an Executive Coach.)

2) Outsource key time-suckers. The hiring process takes a lot of time. Many CFOs are under the impression that they can make great recruiters, with the idea that they don’t have to pay a fee. Working with an executive search firm that you trust will not only make the process easier, but will add value to you and your company. (Read: Executive Search: Do CFOs understand the difference between Cost & Value?)

3) Build your leadership team first. Let your leaders build their team so they can deliver to you.

The War for Talent is returning; don’t get caught unprepared.

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January 19, 2012 By Samuel Dergel 3 Comments

How long should it take to hire a CFO?

According to an article in Wall Street Journal’s CFO Journal by Maxwell Murphy, it took Illumina 2.5 years to hire their Chief Financial Officer, Mark Stapely. (Illumina’s CFO hire was reported in our CFO Moves blog).

Now that, my friends, is a long search.

From my perspective as a CFO Search specialist, 2.5 years is a very long time. There were many reasons cited by the CEO as to the reason that it took that long, but in reality, they sound like excuses, not reasons.

Let’s put it this way. If a company is serious about hiring a CFO, then they will make hiring their CFO a priority. They will retain an experienced executive search firm, create appropriate assessment of the specifications needed for the role together with the search firm, and work to identify the potential candidates that could be appropriate for the role.

Why did it take so long?

Here are some (potential) reasons:

They weren’t serious about hiring. To hire a CFO, you need to be serious. CFOs are smart people. CFOs know when a company that is going through the motions of looking for a Chief Financial Officer, but don’t mean it.

They had a CFO. According to the article, the CFO spot was covered, even though the person covering it was happy to move on to an operational role now that he is relieved from his CFO duty.

There was no pain. Illumina was growing rapidly, cash was coming in, and they didn’t need to raise financing. If it ain’t broke, don’t fix it.

So what made Illumina finally get serious and hire their CFO? Good chance that it was beginning to feel the pain of not having a top quality CFO at the helm and they had to make it a priority.

Lessons Learned?

For the CFO – just because a company says they are hiring a CFO, you should evaluate how serious they are about hiring the best person for the job.

For a company needing a CFO – before you tell the world you are looking for a CFO, make sure you are really ready to go through the process and make the decision. Otherwise, you may have a credibility problem when people know that it took you 2.5 years to hire your CFO.

How long should it take to hire a CFO?

If a company is truly serious about hiring their next CFO and is willing to make the search a priority, it shouldn’t take more than 3 months to complete the search.

How long did it take to hire your CFO?

December 20, 2011 By Samuel Dergel 3 Comments

On the road to CFO, there are winners, and there are losers

A recent article caught my attention on this subject from The Sydney Morning Herald by Malcolm Maiden titled “Fegan exits Telstra after CFO snub” .

The article discusses Telstra’s recent appointment of their new CFO, Andy Penn. Mr. Penn, former chief executive at AXA Asia Pacific, was hired after a through CFO Search, from both inside and outside of the organization. It also discusses how Paul Fegan, an executive at the company, has left following the hiring of Mr. Penn, seemingly, as the article implies, due to Mr. Fegan being snubbed for the CFO role which he thought he was going to be appointed to.

While this story takes place in Australia, it is a common one in the United States and around the world. As executives jockey for position to move up the corporate pyramid, the closer one gets to the top of the pyramid, the greater the opportunity is for an executive to be ‘snubbed’.

Does it make sense to perform a CFO Search outside a company when there is a strong talent pool inside the company? Absolutely. If a company wants to hire the best for their very senior roles, not considering “outsiders” in the nomination process does the company a disservice. Hiring the best CFO is a strategic choice. In making these strategic choices, there will be winners and there will be losers.

Are the losers really losers? No. Strong financial executives who build their reputation and their brand can take their experience elsewhere and provide another company with top-notch leadership.

Does using an executive search firm help? Definitely. When faced with a difficult decision to hire the best CFO, using a search firm not only allows a company access to the best CFOs for consideration, it also provides the company with objective process and guidance to help make the best hiring decision possible for this very important role.

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I would like to take this opportunity to wish all my readers a very Happy Holiday season and a Happy & Successful 2012!

Samuel

December 1, 2011 By Samuel Dergel 6 Comments

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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