CFO Career Track: Can a CFO change industries?

CFOs, like many senior executives, get ‘pigeon-holed’ as they get more senior. In CFO Search, we continually hear these kinds of comments in our needs assessment process at the beginning of a Search:

• “We want our new CFO to come from a competitor”
• “The new CFO will need ___________ (fill in the blank) industry experience”
• “She should have only worked for entrepreneurial companies”
• “He must have IPO experience”

The challenge for any company as they begin their CFO Search process is to properly define what they really need. We still see too many companies treat this part of the search process as a waste of time. Usually, these are the same companies that hire wrong.

I came across this story in the CFO Journal (a new daily Wall Street Journal online publication) “Time Warner Looks Far Afield for CFO Pick”. The article talks about how Time Warner’s new CFO is not from their industry, but from financial services. It is difficult to be privy to the back room conversations that happened for this CFO Search, but I would like to believe that it was done well – not by looking just at the experience of the candidates based on what they have done before, but doing a proper assessment of what the company really needed, and matching the best possible candidates for the role.

My guess is that Time Warner and their Search Firm did their job.

For CFOs planning your career track, be aware that change is possible. You may not be stuck in that ‘pigeon-hole’. One of the challenges you face in career change is to truly understand what the company really needs from their next CFO. Do you own needs assessment. If you understand what the company needs, you will be able to sell yourself appropriately and increase your chances of getting that great new CFO role in a company and an industry that you may not have been considered for otherwise.

Hiring a CFO is easy. Hiring a Great CFO is not.

My friend Cindy Kraft, who is a CFO Coach to the better CFOs out there, recently wrote a blog entitled CFO Turnover is on the Rise. In it, Cindy points to a study that mentions that more CFOs are being hired because the economy is doing better. She also mentions 4 key points as to what has not changed for CFOs looking for their next career move.

What has not changed enough yet is this: Boards and Owners are still looking at 'who they know' and 'who is in their network' as opposed to doing a real search.

The reasons Board Members and Owners give for not doing a real search is mostly cost related. However, it costs more to a company's reputation to do a bad search, or worse, a bad hire.

We have all seen CFOs and Companies that don't fit well together. Most of the time, it is because the company hired wrong. As hard as it may be for the CFO to find the right company, it is just as hard, if not harder, for a company to hire the right CFO.

Many companies (specifically owners and board members) think that calling some people in their network or using LinkedIn is enough. It's not.

A real search is real work.

5 difficult steps to becoming a Great CFO

CFOs get lots of good advice about their career. They hear things like:  

• Build your Personal Brand 
• Always be Networking 
• Learn to be more Strategic 
• Acquire Operational Experience

These tidbits are important for a CFOs success.

However, as good a CFO as you may be, to become a Great CFO you must have a great team.

Having a great team gives you the bench strength you need to spend the time necessary to be strategic and add value to the business, rather than getting lost in the day to day functional realities and firefighting.

Whether you are the newly hired CFO or have been the CFO for a while, the steps necessary are the same. You need to:

1) Design what your team should look like to support your vision

2) Look critically at your current team and allocate people based on their strengths

3) Dismiss those whose strengths do not align with the vision of what your team should look like

4) Hire right to fill the gaps, and

5) Create a succession plan for your team and for yourself.

Sounds simple. It's not. But you already knew that. However, putting in the time and the effort to doing these steps will put you on track to becoming a Great CFO. 

 

I urge you to make this effort. It will be worth the time.

Let me know how it goes.

 

6 Things Real CFOs Do Not Do

Real CFOs Don’t…

Apply to job postings – If I have one pet peeve, it is when a company puts a job posting up for a CFO. The reason it’s my pet peeve is that the only reason a Real CFO will apply to a job posting would be because he or she is not working. This is because Real CFOs are too busy to send their resume, and because Real CFOs know that any CFO job that is posted is not really a CFO job, it’s really a Controller job.

Do the accounting – They don’t manage the books, they do not do accounting research, they do not make journal entries, they do not cut cheques. Real CFOs are helping manage a business, not run an accounting department.

Assume – Real CFOs have learned over time, often before becoming a CFO, that there is a big difference between assuming they know something and actually knowing something. Real CFOs have learned from the mistakes of assumption.

Deal with audit staff– If you are a CFO and you are dealing with the manager or senior on the audit of your financial statements, you are not a Real CFO. You deal with the partner on the file. And tell him or her that the fee is too high.

Stand in the Shadow of the CEO – You give the presentations. You go on the road. You shake hands. You negotiate and you close the deal. If you are watching the CEO do this from the sidelines, you are not a Real CFO.

Melt into the crowd – A Real CFO has presence. You walk into the room, and people know you are a person with responsibility and power. People want to speak with you, want to know you and want to shake your hand.

So, are you a Real CFO?

Thank you to my partner Paul Landry for his important input in preparing this blog.