Over the past decade, I’ve conducted
close to one hundred searches for financial executives nationally. What
is interesting, though not surprising, is that the superstar financial
executive comes in all sizes with talents that cover a wide spectrum.
example, the Chief Financial Officer who will lead an IPO needs to be
comfortable interacting with analysts and being part of a “road show” as
the company and its management team are introduced to the investment
community. Conversely, a Chief Financial Officer who will lead a
company’s global expansion should have a bent for process and matrices.
And then there is a company that has overspent or that has not fared
well in today’s market that needs a financial executive with a
finely-tuned scalpel. The list is endless.
So how does this apply to Board of Directors and Chief Executive Officers hiring Chief Financial Officers?
1) Focus on your company, not your competition. Know
your company and where it is headed. Many companies immediately look at
their competition as a source of candidates. Sometimes this works but
even similar sized companies in the same industry have different
challenges. Sure, they all want to increase shareholder value but while
some companies need a Chief Financial Officer, others need a Chief
Financial Officer who will build a sophisticated financial team to
support growth in line with the business plan.
2) Determine what type of Chief Financial Officer you need. What
should your Chief Financial Officer excel at? E.g., restructuring,
capital markets, international finance, compliance, budgeting, etc.
Several years ago, a medical device company bemoaned their Chief
Financial Officer’s inability to perform. One look at her resume showed
that the Chief Financial Officer had moved from investment banking to
one pre-IPO company after another. She had never run a mature post IPO
company that needed strong organizational and financial planning
3) The type of Chief Financial Officer who fits today may not fit tomorrow. Just
as founder Chief Executive Officers may not work for a post public
company, the same can be said for Chief Financial Officers. Many times
we hear clients lament that “Mary was great for the first five years.”
In truth, Mary did not change but as the company became more
acquisitive, sophisticated, and diverse, it needed a different type of
4) Determine pivotal soft skills needed without regard to industry. Are
you looking for a change agent? Someone who can bring a dysfunctional
financial team together? After some initial skepticism, I’ve become a
big believer in the use of benchmarking tests which not only prioritizes
soft skills but allows various stakeholders to compare their results.
Know your culture. Many people mistakenly characterize their culture as
collegial when truth be told, only the dominant sharp elbow types
excel. Chief Financial Officers rarely fail because they
don’t/can’t do debits and credits. They fail because they are not a
cultural fit or their “sweet spot” is not what the company needs.
6) Interview a wide pool of candidates.
This can be a great window into best practices and you may get a result
you didn’t expect. Last year I completed a Chief Financial Officer
search for a global professional service firm. After encouraging my
client to think “outside the box”, we presented candidates from many
industries, including publishing, manufacturing, financial services, as
well as professional service firms. To their surprise but not mine, they
selected an executive from an international publishing company. She
just celebrated her second anniversary and the client is extremely
pleased. Thus this blog ends where it began with a wink to the
publishing industry: don’t judge a book by its cover.