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CEO: When Your Brand New CFO Leaves

Dear CEO,

I noticed in the news that the CFO you hired with big fanfare only a couple of months ago has left. Your press release quoted your recently new and currently past Chief Financial Officer saying that he is returning to his previous employer because the role is too good of an opportunity to pass up.The CFO Revolving Doors

I have never been Chief Executive Officer of a publicly traded billion-dollar revenue company. I do imagine, however, that the conversation your new CFO had with you must have felt like a kick in the gut, among other places. I am sure that it was not a good day for you.

You know more than most that the past can never be changed. The question remains what can be learned from this ordeal.

While I was not involved in the drama that evolved both before, during or after this incident occurred, I have seen it happen too many times in my weekly coverage of CFO Moves across the US, Canada and the UK. Here are some pointers that you can give to other CEOs so that this does not happen to them.

1) Don’t fall in love with the wrong candidate. Technical, interpersonal, leadership, communication skills are all great. But to hire a great CFO to take you to the next level, you need to connect with motivation of the candidate.

2) Be honest with yourself. You may run a great company but your CFO to be is coming from an ever better environment, understand why they are saying yes. If you know you are runner-up, you may find yourself holding the bouquet at the alter.

3) It’s not just about money. Never, ever think that a CFO takes a role just because of the compensation package. Sure, CFOs are money motivated, but once basic needs are met, other needs are much more important.  (Maslow’s hierarchy of needs is the same for CFOs, except their basic needs are different than most).

4) Select your executive search partners carefully. I know that you understand the value of working with retained executive search for hiring your key leaders. Not all search firms are created equal, and not always should a search firm you have used in the past be the one you use for a critical search like your next CFO. One key differentiator you search firm needs to have is the ability to truly connect with the executive candidates. When looking for a Chief Financial Officer, a great retained search team has the ability to act as an advocate for the needs of the CFO candidate. The closer your recruiter can become a true partner to your CFO candidate, the better opportunity you will have for hiring a CFO where you will be his or her first choice.

If there is a cloud to this silver lining, it is that your recently retired CFO is available to cover until you hire again. I wish you all the best in hiring your next CFO. This time, I know you will make a better choice.

Wishing you continued success,

 

Samuel

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Thoughts About Successful CFO Hiring

I was recently interviewed by Jack Sweeney for his podcast series called CFO Thought Leader. This was the second time I was interviewed by Sweeney, and I enjoyed the conversation. I believe you may find the conversation interesting and relevant.

Here are some of the things that were discussed. (You can find the listen to, download or find the iTunes link below)

  • Helping companies hire their next CFO with the correct chemistry for the company.
  • Key reasons a company needs to work with an executive search firm to hire their next CFO.
  • The courtship process in hiring a new CFO.
  • Young CFOs who are “Jumping the curve”.

“Patience is a virtue, and CFOs need to be virtuous.”

“Today’s CFO is all encompassing. CFOs have to be involved and responsible for everything. As CFO, you need to know what you can and cannot do. The importance of the complete finance team allows you to be as successful as possible.”

  • Private Equity firms and the influence they have over the placement of CFOs in mid-size market.

“The CFO is a significant part of the valuation of a company.”

  • The CFO career path – jumping to larger ship vs. niching down.
  • CFO Hiring – from within the same industry or outside the industry?

If any of these topics are of interest to you, you will find this podcast to be worth listening to. (23 minutes)

Which comments resonate most with you? Let me know what you think below, or privately by email.

Download | Subscribe to CFO Thought Leader Podcast series on iTunes | Link to the CFO Thought Leader web page with more details about this podcast

 

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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:

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

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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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LinkedIn vs. Resume – The discussion continues

CFO Coach Cindy Kraft blogged CFOs and LinkedIn, the Evolution. The blog discusses the story of a recruitment firm that would only be focusing on working with CFOs that have a LinkedIn Profile.

My readers will know that I am a big proponent of LinkedIn for CFOs (or any other executive). You can read my previous blogs on the subject:

While I am a fan of LinkedIn for CFOs, I think that people that are looking to hire CFOs (search firms included) that focus solely on LinkedIn are missing a large pool of talent.

Today, it is easier than ever to find talent using LinkedIn. This makes companies and some recruiters (retained and contingency firms) take shortcuts to find talent.

Is LinkedIn a great place to find talent?

Absolutely.

Is it the only place to find talent?

Absolutely not. (Read: When hiring a CFO, is LinkedIn the place to look? )

Finding talent is easy. Finding the best talent to meet the needs of a company is not. Securing that talent is even harder. Ensuring that the talent is hired, stays and delivers multiples of the value of the cost spent on hiring and compensating that talent is why a company decides to work with a quality executive search firm in the first place.

What lessons can CFOs (or other executives) learn from this?

Executives that are not actively searching for their next opportunity beware: You want to be hired by a company that understands the value of executive search and is willing to retain a quality search firm to not only find you, but secure you and keep you for the long term.

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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

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

A recent blog piece on ERE.net called Fishing in a Small Pond discusses, from the recruiter and company perspective, whether LinkedIn is the best source for candidates when looking to hire.

Our own research shows that LinkedIn is not as great a source for CFO candidates as people think. Our CFO Moves Blog, which is the most regular and comprehensive source detailing CFO hires and unhires across America, is the only list that refers to the CFO’s LinkedIn Profile. If the CFO has a LinkedIn Profile, CFO Moves provides the direct link to it. Take a look for yourself.

Look at the blog and you will notice that not all CFOs are on LinkedIn. A good number of them aren’t.

Shocked? Don’t be.

Also, look at the links to CFO LinkedIn Profiles in our CFO Moves Blog. You will notice that of those CFOs that are on LinkedIn, a good number of them have weak or ineffective profiles, with few connections (Category: I’m here, but leave me alone), and what appears to be no real investment in looking out for building their personal brand.

Lessons to be learned:

For… Lesson to be learned Recommendation 
A company looking to hire your next CFO LinkedIn is not sufficient to do a proper search for the best candidates meeting your needs. Engage a Search firm that not only understands what you need, but how and where to find them.
A CFO actively looking for their next opportunity Your LinkedIn Profile can give you a competitive advantage, if done right. Be active and visible to those looking for CFOs that are too lazy to do any other type of search.
A CFO who iskeeping their eyes open for their next opportunity Other CFOs are not on LinkedIn or not taking LinkedIn seriously. Build your personal brand, including being active on LinkedIn, and opportunities may find you.

We are in process of preparing detailed statistics on what we have learned from our CFO Moves Blog this year. Our report will be coming out in January. Sign up to this blog by clicking the “SIGN ME UP” button on the right column to ensure you can learn what we’ve learned from our CFO Moves Blog.

As well, while you’re at it, if the CFO Moves Blog is of interest to you, sign up for it as well!

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Executive Search: Do CFOs understand the difference between Cost & Value?

Last week I wrote 4 Reasons you should use an Executive Search Firm when hiring your CFO. Cindy Kraft brought to my attention a poll that was running in SmartBrief for Finance. These are the results of the poll.

I agree with Cindy’s analysis of the poll results. I find it interesting that it is OK for CFOs to call every Executive Recruiter when they are looking for their next opportunity, while close to half of those polled don’t see the value in using a Search firm when they need to hire.

Can’t say I’m surprised by the results.

I love CFOs. Heck, they are my favourite people.

Except.

Except too many CFOs worry too much about cost, and not enough about value. Unfortunately for these myopic CFOs, this statement applies not only to recruitment, but to many major decisions that they take as a CFO.

Another point I find interesting is that while 30% of CFO see the value in Executive Search, 1/3 of these CFOs don’t know how to sell the value proposition internally.

To the people that responded to this poll, here is my feedback for you based on your answer:

Yes, but I’m not sure there is a worthwhile ROI: Then you haven’t asked the right questions or your search firm isn’t explaining the value of the services you are reluctantly paying for. Either ensure you get value for the search mandates you give them, or work with someone that will give you value.

No, and we do just fine recruiting top talent without them: Congratulations on this accomplishment. Hiring top talent isn’t easy. Be aware that you could be hiring mediocre talent thinking they are top talent. Also keep in mind that while you may be able to attract top talent in some areas of your company, you may still need to hire using an executive search firm for key roles.

Yes, and they are worth every penny to get top talent: I love you. Call me at +1 (201) 961-0838 for your next executive search to receive even more value than you are getting now.

No, but I wish we did: If you took this poll and answered this question, email me to let me know WHY you wish you did.

Thank you Cindy for bringing the poll to my attention (It was in my email inbox, but I didn’t get to reading it). And if you are a CFO and you are not signed up for SmartBrief for Finance, you really should be.

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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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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: [email protected]