CFOs & Recruiters, Redux

My friend Cindy Kraft wrote a blog yesterday called “Recruiter Relationships“. The topic is near and dear to me, so I had to comment as I couldn’t help myself. You can read my comments on Cindy’s blog and add to it if you’d like.

The topic of CFOs and their relationships with recruiters is not a new one for me. I’ve written about it before here, here, here, here and here.

This paragraph of Cindy’s got my attention:

What a waste of time for all concerned when recruiters contact CFOs for opportunities that are obviously not a good fit. Which begs the question, who is responsible for ensuring that recruiters can make an assessment based on a crystal clear value proposition and fit for culture?

So who is responsible?

Companies hire recruiters. Recruiters are working a search for a CFO using what they believe is the best approach to help the company hire. If the wrong approach is used for hiring a CFO, it is the company that hires the recruiter that bears the responsibility. If they chose the wrong type of firm for their CFO Search, then it shows that the company may be more interested in factors other than the right CFO for their needs.

Who do you think is responsible?

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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.

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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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Ask Samuel: I’ve been approached for another opportunity

Dear Samuel,

I am a CFO that is very committed to my employer. Recently, I was approached by someone I know to consider a CFO role with another company.

The new opportunity sounds challenging, and right up my alley. I have been with my current employer for 4 years, and I think I’m ready for a change.

On the downside, the new CFO opportunity pays less than I am currently earning. Also, my current employer is beginning to face some tough times and I don’t want to leave them in a bind.

What should I do?

Torn in Toronto

Dear Torn,

You are in the ideal situation for a considering a job change. As opposed to being unemployed and looking for a job, here is an opportunity that has found you (you didn’t go looking for it) while you are working and busy. There are people I speak with that would envy your current situation.

That being said, your choice is tough. Giving up the known for the unknown can be a very stressful and difficult choice.

While money is important, you need to look at the situation without the compensation aspect. Once you have all the information you need, then you can add the compensation piece back into the equation to see if it will make a difference.

You need to put your CFO hat on and get as much information you can on the company that is pursuing you. Do your due diligence, as you would for any company you would be considering acquiring for your current employer. Really learn what you could be getting yourself into. True, you will not know everything, but you didn’t get to become CFO by not asking the tough questions and getting the right information you need to make important decisions.

Now that you have all the information, ask yourself the following question:

If I was unemployed, and I had these two opportunities to choose from, which would I choose?

Now that you have this answer, add the compensation piece back into the equation and ask the same question.

If you’ve decided to leave your current employer, you need to prepare yourself for what could be a difficult conversation. As part of your conversation, you should recommend to the CEO that they use a search firm to hire their next CFO, and that you would be happy to speak with the executive recruiter to help them help the company hire a very good replacement CFO.

Good luck with the decision process. If I can help any further, email me and we can talk.

Samuel

If you’d like to ask Samuel a question, click here.

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).

“Get a CFO on board when you are ready to take on the world”

The title is a quote from Fred Wilson, a VC and Principal at Union Square Ventures, who recently wrote a blog titled “VP Finance vs CFO”.

It’s an interesting blog – you should read it. It certainly got a lot of attention in the social media space (CFO, Tech and VC subsector) in the time since it was published 72 hours ago.

I chose this quote to write my blog post on because it was the meatiest and juiciest for me to work with. In addition to my own direct take on the blog which I recently wrote – Does a Small yet Growing Business need a CFO? – I have written blogs that have touched this topic from different perspectives.

Let us count the ways.

1) CFO Readiness. When is a company really ready to take on the world? Are they really ready for a CFO?

2) Promoting the VP Finance to CFO. Fred says that a VP Finance is about “what happened” and a CFO is more about “What is happening right now”. I do agree with him. But that doesn’t mean the VP Finance cannot become a CFO. Here is how. And here is how as well.

3) The Successful CFO. How does a CFO become a successful? They prepare a plan, map out their relationships, get coaching, and build a strong team to support them.

4) Hiring your CFO. How do you hire them? Read this. How do you NOT hire a CFO? Read this.

Come to think of it, there are more than just these 4 ways.

Just read all my blogs.

And, to not miss any in the future, Click on the “Sign me up!” button on the right side of the blog.

The First 90 Days of a New CFO

Contrary to the way many people in the recruitment industry work, the successful placement of a CFO does not stop once an offer of employment is accepted by the new CFO.

Actually, this is one of the most critical stages in the successful hire of a new CFO – Transition.

If you look at the timeline for any well planned project, one project stage does not begin at the point in time that another ends.

For a New CFO, Transition begins…

    • before you start on the 1st day.
    • before you sign your offer letter.

Transition begins when you are interviewing.

You need to know what you’re getting yourself into. The more you can learn about the company during the interview process, before you sign your offer and before you start, the better off you will be as you transition into your new CFO role in the first 90 days.

As part of our complete CFO Search service, we provide the new CFO with our Accelerated Transition Program. This program coaches the CFO to get them up and running smoothly and quickly. (We also deliver our Accelerated Transition Program to CFOs who were not placed by us).

The ‘bible’ for successful transitions is “The First 90 Days – Critical Success Strategies for New Leaders at All Levels” by Michael Watkins. Published in 2003, this book is the guide that we use in all our New CFO Transitions. Watkins clearly describes the process to ensure the success of a new leader, including the CFO. Our CFOs appreciate the coaching we provide in conjunction with this important handbook.

I do not want to summarize the content of the book here as I really could not do it justice. However, here are some additional recommendations that CFOs should consider as they embark on their new CFO position.

1) The numbers. A New CFO should really understand the numbers before walking in on Day 1. You should have reviewed the Financial Statements of the company for the last 5 years, including the MD&A (if publicly listed). You should review the current budgets or forecasts and the business plan going forward. You should not be learning this information when you’re at your desk – there will be too much to do once you’re there.

2) Relationships within the company. Yes. I harp on relationships. That is because they are the most important factor for your success with your new employer. I can’t stress this enough. Know your CEO, Board, your fellow VPs and your team. I urge you to follow the guidance in “The First 90 Days” on how to make the most out of these relationships. Remember, you may be the numbers guy or gal, but you will only be able to accomplish and become a Successful CFO by working with and for the people at your new employer.

3) External Relationships. Bankers, Lawyers, Auditors, and of course Investors. You are the CFO. You represent the financial face of the company. They may not have hired you, but they will have to deal with you. Don’t forget, you need them to trust you.

4) Understand the business. You need to really and truly understand the inputs, process and outputs of the company. You need to be able to internalize why people buy your product or service and understand the company’s value proposition. The role of Finance is to support the business. You can only support it if you truly understand it.

5) Smile. It’s simple. No one likes a sourpuss.

Ask Samuel: How is the CFO job market?

Dear Samuel,

I’m a CFO that is considering looking for my next career opportunity. Business conditions seem tough, and I’m concerned that this is not a good time to look for a new CFO role.

How is the CFO job market?

Worried in Wichita

Dear Worried,

You ask a question that almost every CFO I speak with asks, whether they are actively looking for a new CFO role, or are just keeping an ear open to potential opportunities.

The short answer is: CFOs are getting new jobs, even in a difficult economy.

How do I know this? Simple. My firm tracks CFO Moves across the United States. As of last week, we started sharing this information with the public in our sister blog, CFO Moves. You can view our blog, which is updated every Monday with CFO Moves for the previous week. (If you want to get a weekly update on these CFO Moves, click on the “Sign me Up!” button on the right side of the blog).

So, to answer your question: How is the CFO job market? Good.

Can it be better? Absolutely.

What can you do about it? Be visible, build your CFO brand, network and smile (no one wants to hire a Grumpy CFO).

Samuel

If you would have a question to Ask Samuel, click here to send him your question.

Recruiter Relationships – Build them before you need them!

As a follow up to my previous guest blog post (CFOs and Recruiters: Beefs and Beef and How to Find the Best Recruiter for Your Needs) written for Cindy Kraft, CFO Coach, here is a glimpse of the latest post:

Build your recruiter relationships BEFORE you need them.

In my previous guest blog for Cindy How to Find the Best Recruiter for Your Needs, I brought up (among other points) how important it is to build relationships with recruiters.

For recruiter relationships to be most effective, you need to build relationships with key recruiters BEFORE you need them.

Here is why…

[Visit Cindy's Blog to read more]

Dear CEO & Board: You can’t afford to hire the wrong CFO.

Hiring the wrong CFO can be detrimental to your business.

Costs of hiring the wrong CFO include:

    1. Risk to your company reputation.
    2. A weak CFO will not help your company with what it needs.
    3. Not being able to get the most out of your CFO as soon as possible.
    4. Opportunity cost – the wrong CFO misses the opportunities to add value to the company.

Yet, many companies fear doing a proper search because

    1. Cost of a CFO Search.
    2. Effort and time required to do a CFO Search properly.
    3. Cost.

As CEO or Board Member, you may think that you know people (that know people) that know CFOs. And you ask yourself “How hard can it be?”

Let’s face it. The cost of hiring the wrong CFO is way more than the fees you will pay for a proper CFO Search.

Well. Have you ever hired the wrong CFO? Wonder why they were wrong for you? The CFO was not right for your company because you didn’t do a proper CFO Search.

Now, there are options to how to do a proper CFO Search. You can work with me, work with any good executive search firm, or even manage the process internally.

However, you must have the following elements in your CFO Search.

Assessment: You need to assess what your company really needs from the CFO, both today, and in the future. You need to assess whether your leadership is really ready for a good CFO that will add value and be a leader in the business. You need to assess what skills, knowledge and abilities your new CFO will have to have to be successful in your environment. If your last CFO failed, ask yourself if you did a proper assessment first before hiring him or her.

Search: “Who you know” will not cut it. You need to do a proper search for CFO caliber people that can meet the needs you’ve assessed. If you don’t do a proper search, you will not end up with the best possible CFO for your business.

Onboarding: For a new CFO to be successful, it is important to invest in ensuring that the CFO has what they need to be successful. Onboarding allows your new CFO to acquire the necessary knowledge, skills, and behaviors to become most effective for your organization.

If you’re ready for your next CFO, do yourself and your company a favor. Hire the right CFO this time.