A business of substantial size cannot operate effectively without a Chief Financial Officer (CFO). The complexity of financial processes necessitates this role, and lacking a CFO can even damage a company’s reputation. But how do you find the right CFO?
It’s more complex than you might think. A CFO in healthcare is not the same as a CFO in the food industry, nor is a CFO of a 1,000-employee company the same as one for a 200-employee team.
In essence, beyond just hiring a CFO, you need to find the right person tailored to your specific enterprise and industry.
1. What Are You Expecting from Your CFO?
The responsibilities of a CFO are varied and depend heavily on the industry. This highlights the need for someone with sector-specific expertise.
For example, one primary responsibility is fundraising. In IT, this might involve managing a crowdfunding campaign, which differs significantly from negotiating with venture capitalists or angel investors.
Industry-specific experience is also crucial for managing complex financial operations. Coordinating sales in a company that sells one-time purchase items like exercise equipment is vastly different from managing a SaaS model.
Another major responsibility is overseeing growth and expansion. As your revenue increases, you might enter a higher tax bracket, affecting both your income and expenses.
Additionally, consider whether the candidate can handle your business’s evolving needs. You want someone who has witnessed and navigated business transformations firsthand, even if they were not in a CFO role at their previous job.
2. Looking in the Right Place
To find a CFO with the right sector-specific experience, consider conducting a CFO executive search through a specialized agency. Though it may cost a small fee, it’s a worthwhile investment for selecting one of your highest-ranking executives.
You can also post job listings on platforms like LinkedIn or Jobrack. While these platforms have broad reach, they are invaluable for ensuring your job description gets noticed by potential candidates.
Alternatively, consider looking for a CFO at other companies. Be cautious, though, as candidates from direct competitors may have signed NDAs that restrict them from joining your business for a certain period.
3. Qualities that You’re Looking For
While work history and experience are crucial, they shouldn’t be your sole focus. You need someone with the right traits and characteristics.
Firstly, look for strategic vision. You need a CFO who understands your company’s short-term and long-term goals and can help achieve them.
Secondly, risk management skills are essential. Your CFO should evaluate potential risks and rewards through careful observation and projection, utilizing methods like three-point estimation.
Leadership ability is also crucial, given the high executive nature of the role. Lastly, seek someone adaptable, ready to meet the dynamic needs of your business. Changing a CFO is a significant disruption, so aim for a long-term fit.
4. Define Unique Requirements
Start by understanding the role of a CFO in your specific context. The responsibilities vary by industry and company size.
Clearly define any unique requirements your business may have. Inform candidates about these tasks in advance to ensure transparency and long-term commitment. Imposing unexpected duties not agreed upon can lead to dissatisfaction and turnover.
Be realistic about the workload. Consult with experienced professionals to ensure your requirements are reasonable without overburdening the CFO.
Wrap Up
Ideally, find someone with experience in your industry and at a similarly sized company. However, don’t focus solely on these aspects. Ensure they possess the necessary qualities and be transparent about any special requirements you may have.
