The CFO'S Perspective

Hiring a Chief Financial Officer (CFO) is a daunting activity for many organizations. Understanding when to bring someone on board, what kinds of options are available to fill the CFO role, how to look for the best candidate, and what to expect after making a hiring decision are complicated topics that weigh heavy on many CEOs.

This comprehensive guide to hiring a CFO aims to answer the most common questions we hear when working with new recruiting and executive search clients to find a fractional, interim, or full-time CFO.

A recession or downturn in the market is one of the most demanding scenarios for senior leadership to weather because there are so many possible responses to consider. Each decision leadership makes during this critical time can have a significant effect on the company’s ability to come out on the other side at all, let alone seize available opportunities to grow in the process. So, how can you strategically invest in your business during a downturn to increase the likelihood that it will be able to emerge stronger?

It is critical to act swiftly instead of ignoring the warning signs that a downturn is coming, worsening, or may last longer than anticipated. However, that does not mean giving into kneejerk reactions. A Harvard Business Review article summarizes it best by saying,

“Inaction is the riskiest response to the uncertainties of an economic crisis. But rash or scattershot action can be nearly as damaging. Rising anxiety (how much worse are things likely to get? how long is this going to last?) and the growing pressure to do something often produces a variety of uncoordinated moves that target the wrong problem or overshoot the right one.”

Have honest conversations with your leadership team to solicit feedback on how to proceed while leaning on the data. Focus on efforts on strategically managing expenses, acquiring assets to achieve your goals, prioritizing customer relationships, and developing new markets while focusing on your core competencies.

A CFO’s role is one of many hats. They are expected to be a steward by protecting company assets, have operational savvy, act as a strategist, and be a catalyst for positive change. There are many projects you would expect a CFO to facilitate:

• Facilitating M&A transactions
• Raising capital
• Overseeing Controller and internal auditing functions
• Helping accounting firms prepare for an audit
• Mentoring internal leadership
• Managing the organization’s overall risk and liquidity
• Driving growth initiatives 

These are all areas where a CFO adds value to a business. But one of the biggest priorities of this role should be strategic planning. CEOs and boards increasingly want a CFO that not only gets the numbers right, but that also partners with them in strategic planning.

Recently, CFO Selections division, ASP announced they are now offering contingent recruiting services in addition to their bookkeeping and accounting services. The new ASP recruiting services team is led by Quinn Finnigan. Quinn’s experience includes Deloitte, Seattle Seahawks, and Amazon. In 2015 Quinn made a transition to recruiting and combines his accounting and recruiting experience to provide the type of services people and companies deserve.

Companies that understand how finance and HR overlap and foster a relationship between the two are better poised for long-term growth than their less informed counterparts. The reason behind this is simple – knowing when and how to leverage your CFO to assist with hiring and employee retention can improve profit margins, encouraging sustainable long-term growth. Additionally, encouraging collaboration between these two vital areas of the business improves workplace culture across the entire organization.

Business owners in the middle market are all too familiar with the task of trying to optimize cost structures – getting the most efficiency and “bang for the buck” out of facilities, equipment, customer relationships, and many other elements of a successful enterprise. People have always been vital and important to businesses, but over the last several years, we have noticed a shift in attention toward people in a different way.

Searching for ways to optimize human capital, while fighting the inefficiencies of talent markets, is an ever-present challenge for businesses in the middle market. The human capital corollary to the engineer’s triangle (fast, cheap, reliable – pick two) seems to be availability, relevant experience, and compensation expectation.

An example could be a stable, modestly growing manufacturing business in a small town outside of a major metropolitan area in the Pacific Northwest. It has just outgrown the capability set of its hardworking bookkeeper and needs some expertise in setting up more robust financial oversight and reporting capabilities, but attracting capable, senior-level finance talent to its town with a handsome compensation package seems like overkill.

Contrary to conventional wisdom, the Chief Financial Officer’s (CFO) principal role is not as a “scorekeeper” of past results. Rather, the CFO is the keeper and interpreter of company data, tasked with providing a disciplined quantitative approach to management decisions.

Business process outsourcing (BPO) allows CEOs to focus on the job of running the entire business instead of getting bogged down with the management of individual departments and teams.

Effective outsourcing allows both large and small companies alike to lean on senior skillsets outside of the company to provide accurate information, offer impartial feedback, and inform strategic decision making.

In fact, according to a recent Intuit study, 65% of business owners surveyed said they would be “better positioned for long-term growth if they could take a step back and look at the bigger picture.” These business owners also reported that they were involved in areas of the company such as sales, marketing, customer service, human resources, and accounting, instead of outsourcing them. It is no coincidence that these activities were taking away from their ability to focus on their core business functions. When they were asked what they should be spending their time on instead, their top answers included developing business strategy, making an impact on customers directly, and innovating product/service offerings.

Business process outsourcing allows business owners and CEOs to utilize highly experienced professionals without needing to hire internally, both managing costs and improving business agility. Furthermore, outsourcing allows business leaders to reduce stress, lessening the likelihood of executive burnout.