Investors: Kleiner Perkins, TPG. Stage: Commercial launch
This ground breaking imaging software company is revolutionizing the IVF market. With a marketing focused CEO, the BOD and CEO needed a strong number two to help support their rapid growth and expected IPO path. We delivered!
Investors, Reid Hoffman, Omidyar Networks, Stage: Rapid Global Growth
The highly regarded Kiva organization had been seeking a CFO for over two years when they turned to Arnold Partners for help. We helped streamline the criteria and process and helped them attract a true winner to support their growth.
Investors: Norwest, RBC, Onset Stage: Rapid Growth
World’s number one business intelligence SaaS company was seeking a CFO who could help drive their growth. Unique role since the products they sell are used by CFO’s. Needed to satisfy a long list of requirements from a very demanding CEO.
I read with great interest a LinkedIn post by Lou Adler, the self-proclaimed “Original Headhunter” about how to how to avoid hiring mistakes. As a long-time executive search consultant and former hiring manager, avoiding mistakes is paramount for me and my CEO clients.
Lou made some excellent points about cultural fit, not over or under hiring, assigning appropriate tasks once the new hire is on board, etc. However, he failed to mention a common hiring practice: the misuse of references. It just so happened that this practice was the subject of a lunch conversation I had with a CEO a few days after reading Lou’s post.
The CEO was not having success in hiring a senior finance person. Rather than using references early in the process to gain an objective, outside view of a candidate, she made the mistake of using the references after she made up her mind about who to hire. The reference merely validated her decision. When used correctly, references are a very valuable tool to uncover the truth about candidates before making a hiring decision.
This business is a bit tricky. Say you are learning how to hire a CFO and are courting a new candidate to your company, a woman currently the CFO of a public company. You can hardly start calling official or backdoor references prior to a serious intent to hire. Let’s lower the bar: say you are courting a CFO who is currently in between assignments…when is it ok to start the reference checking process?
In the somewhat small halls of Sand Hill Road, everyone’s references are quietly checked all the time.
In hiring a CFO, the reference process is a delicate and infinitely important one. There isn’t a hard and fast rule for when and how to check references. It needs to be considered on a case by case basis. But one thing I will recommend: don’t make the mistake of waiting to check references until the very end of your hiring process. You’ll just validate your view of the candidate, or waste a lot of your time and that of your executive team.
For those interested in understanding how to hire a CFO, I also recommend hiring a third party to execute on finding the truth about anyone you’re thinking about adding to your team. This will take the emotion out of the equation. If you have comments or want to share your thoughts on how to hire a CFO, please email me, Dave Arnold, at moc.srentrapdlonra@evad or call 408-205-7373.
Now that you’ve learned how to avoid these common pitfalls, are you ready to dive into the complicated issue of industry experience? Read more on my post “Industry Experience: Key in CFO Search?“
I get asked about industry experience a lot by CEOs, CFOs, and Investors. My answer always stimulates a passionate discussion.
Two recent, high-profile CFO appointments shed light on the issue.
Ken Goldman (63) was hired by Yahoo! and Marissa Mayer (38) to help resurrect this great entity. What is Yahoo! anyway? Simply put, it’s a digital media company, but it has trouble explaining that in an elevator pitch. I suppose it’s many things, and it’s sitting on a big pile of cash! How does Ken fit in from an industry experience perspective? Ken started his career in semiconductors (Cypress), moved to software (Seibel), then to the famed @Home, then back to security software (Fortinet). You could make a case that @Home and Yahoo! have some similarities, but on the surface, it doesn’t seem like a natural transition or fit for Ken.
Facebook founder Mark Zuckerberg (29) hired David Ebersman (42) from Genentech to be his CFO. Despite what Andrew Ross Sorkin wrote about David after the “debacle” of Facebook’s IPO (NY Times, Sept 3, 2012), I would hold him up to be one of the best CFOs in the Valley. It’s not immediately clear that Genentech has much in common with Facebook either.
The decision has more to do with the character and quality of the CFOs than what was on the spec. Marissa and Mark probably asked everyone they knew who is the best CFO in the Valley. The same names kept coming up and they went out and got them. In the case of Yahoo!, they paid a pretty penny too.
So you think your company is the next Facebook or Yahoo! — after all, your investors just valued your company at $B+. (Even though you may or may not have revenue). Who should you try to attract to be your CFO: the person with the best industry experience on their resume, or the perceived best CFO?
In executive search, the starting point should be clear. The spec is written with clear goals in mind that are derived from careful listening to the CEO and BOD. This spec will generally include the desired industry experience. But at the end of the day, the spec may be less important if you are able to attract the very best athlete. This goes to the heart of the matter of masterful recruiting, and why sometimes one plus one might not equal two. Call me, Dave Arnold, to discuss this further at: 408-205-7373.
Another essential trait for a CFO? Integrity. Be sure to read my post Search for Job Integrity in a CFO Search.