The urgent need to recruit a CFO is a common occurrence in a turnaround with the exit of the incumbent often the catalyst to drive change.
Unfortunately a desire from stakeholders to find the “forever” CFO to drive a turnaround and long term performance improvement does not accord with the reality of the recruitment market where finding quality candidates takes time.
Further, if stakeholders wait too long for a new appointment to be made the “runway” to complete a turnaround shortens and strategic options begin to diminish ie you might die waiting!
The answer to this problem may be to find a “fixer” while searching for a “forever” CFO! This approach reflects some upfront pragmatism about the nature of turnarounds and the recruitment market and may help give some direction and focus to the situation.
A long term appointee would have a mixture of qualities including industry and turnaround experience while being a cultural fit. However, there are some practical issues to keep in mind when searching for this person:
Unless you get lucky, the right candidate will take some time to find.
Many good candidates are already in existing roles and will require convincing to join your company. A company being in a turnaround reduces the pool of talent ie many candidates would prefer to avoid the personal financial uncertainties and challenges associated with an under performing company.
Here’s some reasons to initially make an interim appointment:
The most urgent needs of a company typically require “situational” expertise which are the specialty of interim appointees eg cash control, managing financiers, strategic financial restructuring and transaction management.
Most experienced turnaround advisers have some experience in most industries and those that are “worth their salt” are quickly able to get across the strategic nuances of an industry.
Limiting the appointment period of an interim to (say) 3 months is important lest they become permanent. In most situations, most of the “heavy lifting” can be completed in this period and thereby avoiding a “baptism of fire” for your long term appointee.
Here’s some considerations for the recruitment of a permanent CFO:
For a permanent appointee, this is where industry experience becomes more prevalent while hopefully some of the urgency regarding cash flow and financiers has dissipated by the time this person is recruited.
A long term appointment is best placed to drive the “deep” changes to reporting, systems and this needs to be part of their background and skill set.
Further, there is some wisdom to delaying starting systematic changes until a long term appointee is in place as you need them to “own” this process which may be difficult if they are inheriting someone else’s plan.
A practical approach is to define the recruitment process such that it incorporates both a short term and long term strategy ie an interim appointment (or fixer) to “right the ship” and a permanent appointee (your forever candidate) once the situation stabilises and to help deliver long term improvements. Interim appointees will have higher rates, but generally this will be the premium cost of having a person in place quickly to address the urgent issues of the business and affording yourself the time to find that “forever” CFO who you need in the long term.
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