We are in the process of hiring a high level
Hiring a CFO
Answers
First, health care expenditures at high-pressure companies are nearly 50% greater than at other organizations. The American Psychological Association estimates that more than $500 billion is siphoned off from the U.S. economy because of workplace stress, and 550 million workdays are lost each year due to stress on the job. Sixty percent to 80% of workplace accidents are attributed to stress, and it’s estimated that more than 80% of doctor visits are due to stress. Workplace stress has been linked to health problems ranging from metabolic syndrome to cardiovascular disease and mortality.
The stress of belonging to hierarchies itself is linked to disease and death. One study showed that, the lower someone’s rank in a hierarchy, the higher their chances of cardiovascular disease and death from heart attacks. In a large-scale study of over 3,000 employees conducted by Anna Nyberg at the Karolinska Institute, results showed a strong link between
In sum, a positive workplace is more successful over time because it increases positive emotions and well-being. This, in turn, improves people’s relationships with each other and amplifies their abilities and their creativity. It buffers against negative experiences such as stress, thus improving employees’ ability to bounce back from challenges and difficulties while bolstering their health. And, it attracts employees, making them more loyal to the leader and to the organization as well as bringing out their best strengths. When organizations develop positive, virtuous cultures they achieve significantly higher levels of organizational effectiveness — including financial performance, customer satisfaction, productivity, and employee engagement.
You have touched a sore bruise in me. From my experience the arrogance comes from the industry itself. As an example, Have you dug deeper on why you really need "actual" (your emphasis) healthcare experience? I will say upfront that I am not a big fan of "industry experience" as a requirement and my posts here and on LinkedIn will attest to that. The industry has been lagging in innovations yet the industry still insists on enticing the same people in the same sandbox with the same perspectives over and over.
I am not even talking about multi disciplinary institutions. Even Long Term Care or Hospices or Behavioural Health have a "healthcare experience" requirement. I don't belittle those in the LTC/Hospice/BH industries but managing their strategy, financials and growth is not rocket science.
For transparency (and sincerity) sake, I did not make my response anonymous.
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I agree with Emerson. I can't begin to tell you how many jobs I've lost because I supposedly don't have industry experience.
One of my precepts of beings a CFO is to surround myself with SME's. One can't know everything, can one. So while I may not be an expert or even very conversant in topic 'X', I'm sure I can find some who is..... My job is to interpret and make (hopefully) a fully informed decision and the correct one.
Granting this isn't a CFO, but a CEO example....
Gerstner went from AmEx to RJR to IBM, and most folks think he did pretty well.
The obsession with "having done it" vs. "clearly capable" narrows the selection from the best candidate, to the candidate with the "best" resume. It's an ongoing problem...
Thanks Emerson. I wish I could speak in more specifics, but we are an innovative company and in our current position in the market, I cannot let out more details than that. We did hire a consultant to prepare our reports for our auditors while we are on the search - so that they were compliant with the SEC requirements (PCAOB). This consultant wanted the job, eventually, and may have had it -- but his arrogance and nastiness to all those that would have been under him (which is pretty much everyone in the company but the CEO) did him in. Upper management and the Board were aware of his behavior which even touched our international counterparts. It was not acceptable. Because of the kind of
I know there are good people out there -- I am just so surprised that I am not finding more. I also think I am very upset to find such a disconnection with people. We are building, and priding ourselves, on building a company that is supportive and will attract the best people -- and not just in technical expertise. Someone that will treat people like humans, is open to a truly diverse staff from all over the world. It has seemed like these candidates come in and feel like they have to act superior in knowledge and ability and they treat others with an attitude of "they are higher up than you" -- everyone else in the office. I am not sure if they feel this is how they should present themselves or if it is truly how they are inside. It has been extremely disappointing to me.
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Here is my response...
The CFO's responsibility is to understand the business (revenue and cost) model, the projections and capitalization strategies. Investors do NOT expect the CFO to be extremely knowledgeable with the technical/science (product) side of it. I will give in that the CFO should at least have a basic (and maybe a tad more) understanding of the product. Fully understanding the product is the role of the CEO and/or the Chief Technical Officer and/or Chief Science Officer. I still have to encounter an investor who questioned a CFO of how the programming works or what's the science behind the product. And believe me, any CFO worth his salt will have a very good understanding of the product as they go through the roadshow even if he did not have a clue at the start.
An experienced CFO in fundraising and maybe IPO preparation (note that I did not even say IPO proper) will work for you. You have consultants/Investment Bankers that have worked with the healthcare,medical device (or whatever) field and they will provide the CFO with the details. This will (should) happen whether you have a healthcare/medical device experienced CFO or not.
Most startups and companies THINK that their product or business model is unique or complicated to require a special set of skills or a special breed of CFO. What they do NOT realize (IMO) is that most "skilled" finance professionals boil it down to basics and adapt/plan from there.
Just my two cents. (steps off the box).
Oh, and I agree, cultural fit greatly matters.
Emerson -
Excellent analysis, well stated and based on my experience most of the time ignored.
Here's another reason why one should hire a non-industry CFO, fresh eyes. New points of view. Individuals who have a diverse background of experiences can bring enormous value to a role, versus doing the same old, same old.
"I know there are good people out there -- I am just so surprised that I am not finding more."
I'm not surprised at all. You need to check your own attitude and assumptions. Perhaps the answer lies there.
When one points one's finger at another to emphasize blame, there are four fingers on that same hand pointing right back at you.
Hi Anon
Just some thoughts based on reading your thread:
Has your search to date included CFOs other than Americans (assuming your company is US headquartered)? Full disclosure: I am a South African now living in the USA:)
Are you using a search expert with global contacts who could perhaps help find better candidates?
Is your international CFO a person you want to retain? It seems like he has many of the soft skills you really need. What about bringing him in and using a CFO advisor (e.g. board member, investor) to fill in the temporary gaps that may exist while he settles in?
I am a CFO in Financial Services in Australia and I frequently encounter other CFOs in this industry who are buoyant with arrogance and ego. Whilst clever and technically sharp, these CFOs lack empathy, personality and awareness and thereby would not connect well with staff, particularly younger staff who require and demand greater personal engagement and respect. I particularly encounter such CFOs at conferences and it never ceases to amaze me just how self-indulgent, robotic, glum, conservative and boring these guys can be. Having said this, there are many others that I meet who are schooled in a more similar way to myself, being modernised, non-hierarchical, less conservative, respectful to all age-cohorts, relaxed and willing to learn from and listen to others. We get paid for the stress packaged up within our roles, but we also get paid to lead and engage our staff and through this, maximise their potential for themselves and the business!
Get somebody who can roll her/his sleves up and get cracking on internal issues that deal with performance measures in the areas of revenue and cost.
IPO, Board and
Shareholders are
infrequent dealings that can be tackled by the
incumbent from time to
time. It works
I don't agree that one can generalize all CFOs in that category. I have worked for and with both types of individuals. I think some of it is due to the fact that the CFO is sometimes expected to be the smartest person in the room. He/she is the guardian of the companies assets. With that comes a responsibility to understand many things. A person that has some shortcomings may not want that to show and, as a result, take on a position of arrogance when challenged. I strongly suggest you keep looking. Keep in mind, you may have to "up the ante" as you are not the only company looking for that type of person.
In my humble opinion, you may be able to find someone capable who does not have the experience but has the skills and fit that will work. That may save you money and may work out well. It doesn't take having been a CFO to be a CFO at another company.
Anon,
As Emerson suggested, perhaps you should hire for the best possible outcomes rather than hire the best person that applies for the job.
Good luck!
Anon - something tells me you are working with the wrong search firm or your first level candidate filter is focused too heavily on high profile successes. Both of those would explain your experience. I would suggest asking your search firm to send you the resumes of those they have rejected. When you sort through those, I think you will find some more suitable candidates. Also, you may want to consider a contrarian tack: talk to a few individuals that have a few of what appear to be failures on their resume.
I agree with the comments from @Emerson and @Wayne.
The arrogance I've experienced and witnessed comes not just from the individual applying for the CFO position but from the industries (and lots of companies) themselves.
Sorry to say but the tone of the original comment seemed... a bit unfriendly.
Have I been there? You bet.
Classic example... Hired to help a start-up as a CFO but cultural issues arose and left amicably. The company "said" they were 'open-minded' and wanted things like efficiency.
Try dealing with management who was quite the opposite... controlling and manipulative!
The company shut down in less than 2 years after I left, due to 'financial issues', which most likely were related to my reasons leaving.
Do companies move fast? What makes your company any different?
Notice the tone in your original comments.
Maybe it's the company that needs to consider the most 'qualified candidate' instead of the "BEST" candidate. Notice the Fallacy... many companies "expect" to find the 'best' [i.e. IDEAL] candidates, instead of the best 'qualified' to help them.
What is your company 'truly' looking for?
Someone with accounting experience? Finance experience? Industry experience? MBA?
Oh, wait... you want it ALL!
Notice the tone in your original comments.
Sometimes the "Better" candidate may be one that's NOT within your industry who can give the company a new perspective on things.
I noticed 2 things from the original comments:
1. You're looking for the 'IDEAL' candidate.. NO SUCH THING!
FYI... there's NO such thing as the 'Ideal' boss or company, either.
2. The candidate has to work WITH YOU. The tone of your comments suggests that You may not be as responsive or open-minded as you think!
Are you honestly sincere in what you commented or was that from your 'point of view' of how things went?
I believe their is some good feedback here. In addition however you need to make sure you are hiring a person that will "fit" well into your organization and its culture. I suggest you look into a new company I've stumbled upon and have been impressed with called Jobzology (and that is their website). They seem to do this well. Call and ask for Eric (one of the founders and very nice guy). And there is nothing in it for me here but I think you will be impressed. Good luck!
I don't think that it is clear if OP/Anon has engaged a search firm.
If this is high-level, are you working with a high-level search firm? Heidrich & Struggles would be one suggestion.
(Disclosure - no personal relationship with them. DIL did work in their NYC/CFO practice at one time.)
Are you serious? There are many capable people out there. Your firm has weeded them out due to"goldilock's" syndrome. One a related note, the two most eye rolling requiriments for this type of job are 1)
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To take Rich's point a step further, maybe it's
Not to sound like an elitist, but C-suite members are not and should not be treated as low level employees (and neither should the low level employees be treated poorly). We all have seen questions proffered to C-Suite candidates that are just insulting or at least very unprofessional.
One aspect that is never mentioned in hiring discussions and CFO's are their sales "Q". We are sales people, whether it is the Board, other employees, the Bank, other creditors or investors, customers or vendors, we are selling the value of our company or the plans of the company to those individuals.
I truly believe HR doesn't realize they are salespeople. No different than the regular sales team, and in that vein, the CFO him/herself. You (HR) are selling the company to me, the candidate.
While I might want/need a job, I may not want or need to work for you. Your job is to convince me that I want to work there. Just as my assignment is to convince you (sic sell you) I'm the best (by the way I am, that's what I keep telling myself).
@Wayne:
"While I might want/need a job, I may not want or need to work for you. Your job is to convince me that I want to work there. Just as my assignment is to convince you (sic sell you) I'm the best (by the way I am, that's what I keep telling myself)."
I really like that. It's been my approach as well. I can't say it's been successful though.
However, most potential employers, particularly their HR departments, seem to see it differently. From their perspective, they will be the one's asking questions and passing judgement.
So, one must ask, who is actually being arrogant? And, very short sighted!
@Anonymous - the part I can never figure out is:
1. HR many times reports to the CFO (or at least another C-suite member)?
2. Why HR is "hiring" the C-suite?
3. Why would you make the process more difficult or disagreeable for all candidates when one them might will be your boss (or at least control the purse strings)?
It's a quandary...
Seems like your Company is stuck on high center with the way you have been looking for a CFO. So change your approach!!
If you are a company that is "going places fast" maybe you need a CFO with broader industry experience. Nothing like a different world view to help you innovate.
In my opinion, hiring for specific industry experience is narrow minded and out dated. That requirement is usually used to make it easier on the HR department to eliminate candidates. Too many HR departments concentrate on "eliminating" candidates using key words and tight experience requirements rather than finding candidates with a broader knowledge of several industries and the right attitude.
When I hire, I look for attitude and aptitude. Those can't be taught. I can teach everything else.
Finally, a CFO candidate that has been in several industries must be flexible and willing to learn new things. They are typically more open minded to trying new things as well. I believe that is the type of personality you are looking for, among other things.
In my view you have brought this upon yourself to some degree. Do you have the courage to admit you are wrong in your approach? Maybe it is time to look at all of those resumes you "eliminated" and look for the right attitude and a demonstrated ability to learn new industries and to be flexible in their thinking and approach.
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Well said Scott!!!
NO Mr. CEO, as a CFO, I don't make it a habit to apply for positions or industries I know or there is a good chance that I will fail and tarnish my reputation.
Yes this is very frustrating for those of us who are looking for these opportunities. Finding myself back in the market due to a move and feel like that specific industry experience pushes you to the back of the line or actually to the circular file. I have been "Controller" for several small to mid-range companies - a wide variety from services, retail, restaurant, construction etc. and now because I don't have health care it is a determent? Why? Are the debits and credits different? Is the Accounts Payable and Accounts Receivable aged differently? Is Cash-flow in health care not a problem?
And yes the "CPA required" is frustrating but not impossible to overcome. Thanks for letting me vent a bit.
If you've only talked to 12 candidates in 3 months and all but 1 has been found to be arrogant, very good chance something in your screening process is the reason. If someone is screening for you, perhaps they favor a different personality type than you like, going for candidates who are the most boastful in their resumes and cover letters, or favoring candidates out of larger, more political organizations.
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To add to Bob's assessment, maybe you sent a cut and paste group of questions without bothering to read each person's resume. The questions themselves could be absurd as well.
Or maybe you asked for individually written reference letters before even talking with the candidate.
Or better yet, take a seasoned, experienced individual and ask them to take a predictive index test.
Three reasons to get arrogant answers back.....
The attitude of many CFOs is I am a caretaker, as a member of senior management I let the others do the work. Ask the tough questions "How many times have you been in the office at 8 or 9 p.m (or maybe later) evaluating options that will keep a company afloat and not have to lay off people, or trying to find financing, or working on a serious personnel problem or working on a system conversion or finding answers to why employees want union representation, or successfully completing a tough negotiation with a supplier. The list goes on and on. You want a hands on experienced, working CFO, not a caretaker. Again, ask the tough questions - " how did you handle a such and such issue?" If you get a blank stare, then this is not the person you want as CFO. If you get the answer, "well, I did such and such" then your question back is "why?"
It would be helpful to know just what your screen is. A slightly different angle that others have touched upon, in my experience (and I realize this is a HIGH generalization) if you are looking for an accounting focused CFO, you are going to have much more issues trying to find the right "fit." Certainly not meant to be a criticism of others on this site, but the skill sets you are looking for are just not very well developed in the traditional Big-4 (and their counterparts) structures.
If you haven't, I might suggest broadening your search to those coming out of investment banking and private equity tracks. Again, not like this will be a slam dunk - I've met plenty of these people who I wouldn't want to work for/with, but those two industry tracks have a much higher "soft skill" touch point IMO.
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Anonymous - very interested in your view. I used to disagree with this line of thought. Most of that was the "how can you govern my team if you know little of what we actually do on a daily basis".
Working for the arrogant type who insists he knows your job better than you (and doesn't) has soured me on this and moving on from pure "Controller" duties myself has helped me understand its reduced importance relative to everything else a company must manage.
Still, the best CFO I ever worked for did have a Big 4 start and he definitely had soft skills in abundance.
There are exceptions to every rule, but the function of the CFO is in my humble opinion no longer just a bean counter, in fact those responsibilities have almost entirely moved to the Controller as Chief Accounting Officer. The CFO is a strategic partner to the CEO and other C-level individuals to help move the company by leveraging their diverse knowledge gain working in multiple businesses and sectors.
The diverse knowledge comes again from working in, not specifically auditing those business sectors. Yes you can gain some very good insight being the
I'm with you Wayne.
One additional point, I have seen some truly strange job descriptions for CFOs.
"Must have detailed experience with XYZ Accounting Software."
"Must be motivated to succeed."
"Performs monthly bank reconciliations."
"Prepares monthly financial statements."
These are not the job responsibilities of a CFO!!!!
Thanks all. All good points. The CEO and the Board made the decision for industry specific skills, and the hiring decision -- and chose the recruiter to send the candidates. I absolutely agree that it should not matter as to the industry experience - that was my frustration, but the board and the CEO was set on that more than anyone else. It took us several months but they finally made a decision. Should it have taken that long with a recruiting firm?
I won't name the recruiter -- they really were useless for the price they charged IMO. I have worked with much better recruiters. I can only figure they are in the back pockets of the board. And what is with paying recruiters with no guarantee that they will find you someone? What a job!
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In my experience the recruiter fee is on placement. The fee changes between an exclusive and non-exclusive engagement... But that too could have changed...