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A CFO for growth

The expertise of the CFO, in partnership with the CEO, has often been central to ensuring corporate survival through the economic storm. In many businesses, the recession necessitated a review of leadership expertise, and the instigation of boardroom changes to ensure that the right skills were in place.

High on the list of requirements for a CFO during this time was rigorous financial control and a track record of burrowing into operations to seek out wastage, cut costs and identify ways of streamlining and consolidating operations.  In short, in a world characterised by uncertainty and falling demand, the Finance Director who could ensure that everything is neatly in place and operating at maximum efficiency was a valuable commodity.

As the economic cycle turns towards a more buoyant outlook and companies consider plans for capital investment, there is a change in the style of CFO required. Increasingly, the brief to Search Consultants is: “We have in place a safe pair of hands, but we now need someone who is entrepreneurially-minded, who is prepared to think beyond pure finance and can demonstrate a track record of successful business growth”.

Clearly, the new CFO must still keep a wily eye on the numbers but this has to be complemented by an ability to identify and pursue commercial opportunities that will facilitate growth and capture market share.

However, the recession has been prolonged, so there is an emerging business generation of senior finance professionals who have been focused almost entirely on contraction and consolidation. Certainly there have been pockets of explosive growth, even during the lean years, meaning that there are some experienced CFOs who have helped deliver an expansionist agenda. But overall there is a shortage of talent and a ‘pinch point’ in demand, and as companies move to shape up their boards for the future they find that many of the best people are locked into good posts, or are already in discussion for several other roles.

There are three essential ingredients to a successful CFO search in such a market:

  1. Speed of decision making is crucial to inspire the candidate’s confidence, and secure them before another organisation snaps them up. The best candidates are no longer prepared to wait for a sluggish process.
  2. There is a shift from a buyer’s market, where the company has the pick of available talent, to a seller’s market, where increased demand gives qualified candidates leverage to negotiate and improve their reward.  Final stage ‘low ball’ offers now tend to land badly.
  3. A readiness to think laterally and look further afield for the next CFO is not only more likely to succeed in finding the rare commercial skills, it can also import a wealth of objectivity and fresh thinking. Many companies have slipped into risk-averse recruitment in recent years, believing that their sector is unique and that it is only possible to hire people from within it.  However, finance remains one of the most sector-transferable functions.

 

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