Aesop’s fable about the race between the tortoise and the hare provides a story to show how a race is not always for the swiftest. In the business world, some companies are very focused on short-term financial results while others are managing for the very long-term time horizon. Some companies are working to improve their operations and financial results in order to sell the business in a few years, while others are building a business for the next generation of owners.

When there is a need to hire a new CFO, the question the CEO and the owners should consider asking is: do I need a tortoise or a hare as my next CFO?

The “Hare” CFO

The hare is very quick and can get someplace in a short amount of time. The hare may also get easily distracted when something more interesting appears and, because of its quickness, maybe it can get back on track to the original goal (or maybe not). The hare in the fable is not thinking about the long game.

There are companies out there and situations where the business is not being operated for the long game. Instead, the strategy is really focused on the short-term. These situations would include times when:

• A CEO/owner is five years away from retiring and does not have a family member or management team to run the business in the future.
• A company is owned by a private equity firm where the idea is, buy the company and sell it in a few years. Yes, the business will still be operating after the sale by the PE firm or CEO/owner, building their product or delivering their service, but under different ownership.

In these situations, the focus for that CEO and/or owner is short-term.

In the context of a CFO seeking to achieve quick results on a personal level, a “hare CFO” is going to be attracted to a company that has the opportunity for fast growth, and some type of transaction (sale of the business or IPO) that can generate a quick and substantial financial result. A number of years ago I wrote about how a CFO spends their day and noted how one style of CFO is a “dealmaker.” This person thrives on working on transactions, selling a division, buying a business, or selling a business. A financial return in the short-term is often a primary motivator for this “hare CFO” (whereas medium/long-term employee development, business information system changes for long-term efficiency, and executive succession planning are not on this style of CFO’s daily to do list).

Additionally, the “hare CFO” is the hare in the fable is not the most self-aware of the two racers. The hare does not understand that it’s main strength (its speed) can actually be a weakness as well. It doesn’t realize that it may burn out physically, resulting in a need for rest, if it goes out too fast. It also doesn’t understand that its propensity to get distracted can be a detriment to finishing the race.

Often, the “hare CFO” may not be aware how their singular focus on closing a big financial transaction may cause them to ignore the needs of their accounting team or fellow management peers. The “hare CFO” may wonder why other people in the organization are not as focused on the goal, and view their lack of performance as a reflection of their own work ethic versus wondering, “Is it my style of leading that is the cause of their lack of performance?”

The “Tortoise” CFO

The tortoise in the fable is portrayed as very slow. The reader starts the story thinking there is no way that the tortoise has a chance at winning. However, the tortoise knows the goal of the race, so it stays focused on the course, keeps going, doesn’t stop, and perseveres when an obstacle appears.

Often, I hear people say they need their CFO to be high energy. Does this really mean fast, or does it mean they need a CFO who can withstand the ups and downs of managing a business and stay the course of the strategic plan? Businesses or organizations that are thinking about the long game need a CFO who should certainly take care of the here and now, but more critically they need a CFO who keeps their mind focused on the long-term goals while battling the daily fires.

The “tortoise CFO” is the most self-aware. They know what they cannot do and don’t try to be something they are not. The hare’s self-confidence comes across as cockiness, while the tortoise has a humbleness to them but knows their abilities and how those abilities will work for the race.

Really understanding yourself is a key for a CFO where the need is to guide and mentor their team for both the short and long-term by:

• Taking an interest in individuals and helping them progress in their career.
• Working with their fellow executive team members on creating a healthy and productive management team
• Understanding each other’s strengths and weaknesses.
• Being willing to be open and transparent with each other.

For the business that is operating for the long-term, having a highly capable and stable workforce and management team is key. The owners will be around for a long time, which means that the bad hire, ignored inadequate business information system, or any other obstacle is still going to be there. You want a CFO who will stay on top of both the business’s short-term and long-term needs and be willing to speak up on issues that will impact the long-term in a manner that is respectful and humble, focusing on the long-term financial benefit for all, not just the current year’s annual bonus plan.

Discerning CFO Styles

This story is certainly generalizing about styles of people, and every human is unique. However, the 80/20 rule always seems to apply, meaning a generalization often has truth to it. Just recently a CEO client said, “I don’t want a CFO that is so focused on money that they ignore the need to work with people. We like working together and we like the company, yes there will be financial rewards if we do well, but it is about liking to work with each other that is the most important!”

Below is a grid to give you some generalizations to think about when interviewing a CFO candidate:

We really don’t know what the course looked like that the tortoise and the hare ran, but the story implies it was long and contained items that could tempt the unfocused hare to stop and look around.   Thus, it was a course that was best suited for the racer that didn’t start out too fast and developed a long-term plan and stuck to it. This sounds like the business that is being run for the long haul – the next generation of the family, or an ESOP and the next group of employee owners, or a non-profit serving a need that will be around for another 100 years. Those types of businesses and organizations need to hire the “tortoise CFO” instead of getting swayed by the highly dynamic, energetic, and exciting personality of the dealmaking “hare CFO.” However, if your company is operating in a very short-term time horizon with a big deal looming, the “hare CFO” is for you. There is no one style that is best – the best style is the one to match your company’s needs. Make sure you understand what type of company you have, so you understand which kind of CFO you need.

At CFO Selections, we have 20+ years of experience working with companies focused solely on the role of CFO. As a team of CFOs ourselves, we understand this role better than anyone, which means we know that one-size does not fit all! Contact us to get help figuring out whether you need a tortoise or a hare when hiring a CFO. We have the unique expertise needed to help you hire better! Find out more about our CFO executive recruiting services today.

About the Author
Alex de Soto – Search Practice Leader

Alex de Soto anchors the CFO Selections search practice and brings over 30 years of experience in accounting, finance, human resources, and executive search to his role as leader of the search team. Since 2008, he has spent most of his time helping CEOs and CFOs of Pacific Northwest based companies find that unique match they seek in a CFO or Controller.

He began his career with eight years as a CPA with Coopers & Lybrand in their Seattle and London offices and served nearly 15 years as a member of or advisor to numerous executive management teams in the Puget Sound area.

He serves as a member of the Board of Directors of Compass Health, a large community behavioral health organization serving the five northwest counties of Washington. Alex’s years as a Board member, former CPA and CFO, HR consultant, and recruiter offer a unique combination of experiences enabling successful CFO and Controller placements.