The role of the chief financial officer (CFO) has evolved over the last few years. Once considered the chief bean counter within the organisation, today’s CFO is becoming more operational, systems focused and one of the most important and senior people after the CEO.
Organisations have fallen under increasing scrutiny since the recession – not just as a result of a number of high profile scandals such as Enron, JP Morgan and Barclays et al but also because of the greater complexities and uncertainties that have emerged in recent years.
Indeed, new and potential disruptive technologies have the potential to upend existing business models and create a fall out that could have significant long-term consequences, as may be the case in the wake of the current TalkTalk cyber attack.
This all points to the role of the CFO – the person charged with ensuring that the financial security, effectiveness and key drivers of the business are on course and in doing so enabling the organisation to effectively navigate change and influence strategic direction. Which makes their appointment a critical one.
If you’re on the search for a new CFO, how do you go about finding the right person for the job? Here are a few tips to help you.
1. Identify if you really need a CFO at all
There are certain clear signs that your organisation requires a CFO:
- Top-line revenue exceed £5m
- You need a formal audit
- The company is considering going public or engaging in mergers and acquisitions
- Staffing levels exceed 30 employees
- The business looks to maximise and monetise all financial opportunities
2. Qualifications and experience to look for
Being a strategic thinker, with excellent finance skills are just the start. However, there are a number of other key attributes you need to look out for in your next CFO:
- Planning: An essential part of the CFO’s role is to provide strategic direction for the business – to give priority to the matters that have the greatest impact on the business. What has their track record been in this area?
- Leadership: Are they experienced at leading teams and managing people from a range of different disciplines, such as retail, manufacturing or sales?
- Industry knowledge: Do they have an in-depth working knowledge of your industry and understand the challenges you face in your sector? If not, could they apply their knowledge gained elsewhere to benefit your sector?
- Experience: How many years of experience do they have in a similar role overseeing the financial health of the company? How successful were they?
- Qualifications: There has been a push for a global standard of accounting in recent years. An MBA and/or an accounting qualification combined with certified status are the norm.
- Communication and presentation skills: Do they have strong negotiation and persuasive skills which can be used to drive forward their ideas, instil confidence and encourage buy-in from the board of directors or outside investors? Can they present complex information in a way that can be understood by stakeholders, potential investors and Joe Public?
3. What candidate attraction strategy works best?
Recruiting for any senior role takes time as the most talented executives are typically in the market already doing the job you want them to be doing for you, with many commentators estimating that as many as 1 in 10 of all employees are ‘approached’ (or ‘head hunted’) about a new opportunity.
Using an executive search specialist opens up this so-called hidden market of talent to you. They typically have built up a network of key contacts performing similar roles to what you are looking for and it is their job to tap into this network and proactively target individuals who meet you selection criteria.
4. Don’t put all your eggs in one basket
Consider advertising in trade publications and on the job boards that carry similar recruitment adverts. Maximise the opportunities to reach out to potential candidates via online social networks, such as LinkedIn and Twitter to support your existing recruiting activity – if this is where your target market is hanging out then you should be too.
5. Interviewing candidates
Good CFO’s are always in high demand, but great one are even harder to find. Remember, this is the person whose influence in the organisation is surpassed only by that of the CEO so it’s important to ask the right questions that will help you identify the best candidate. What have been their major achievements during their career to date and what could they bring to your organisation? How well will they fit in with your corporate culture?
Give candidates a real-life financial problem to evaluate. Challenge them to provide solutions, their opinions, and their recommendations as to the most effective course of action while looking out for the candidate who think logically, strategically and consider the bigger picture.
Finally, trust your gut
In his book, Blink, Malcolm Gladwell said that “decisions made very quickly can be every bit as good as decisions made cautiously and deliberately”. So no matter how great your chosen candidate’s references may be, is this someone with whom you can establish a strong working relationship and rapport with – the key ingredients to a successful working partnership?
More than just a glorified bookkeeper, the CFO is perhaps the key strategic partner for the CEO. The more the CEO establishes their resolute support for the CFO, the greater the chance for success and collaboration with the rest of the organisation. After all, you can’t whistle a symphony; it takes an orchestra to play it.
If your organisation is looking to appoint a new CFO, talk to us. We have experience of placing some of the best talent across a range of key industry sectors. Call Paul Coleclough, CEO on 0203 283 8746 or email firstname.lastname@example.org