Industry Experience: Key in CFO Search?

Industry Experience: Key in CFO Search?

by | Feb 14, 2013 | CFO Executive Search Process, CFO Search, How To Hire a CFO, News from Arnold Partners

yahooI 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.

Why two major internet players went “outside” their industries to hire CFOs

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?

Adding up the numbers in the CFO search

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.

Search for Job Integrity in a CFO Search

Search for Job Integrity in a CFO Search

by | Feb 11, 2013 | Board Recruitment, CFO Executive Search Process, CFO Search, How To Hire a CFO, News from Arnold Partners

integrityThis quote from the January 31 NY Times, “The company seeks the most accomplished and competent people for the job” is from a company spokesperson for J&J. It’s in defense of the hiring of Andrew Ekdahl to head their hip replacement business. The problem is that Mr. Ekdahl is lacking THE premiere quality of all executives and particularly CFOs: Job Integrity.

Ekdahl knowingly promoted the sale and implantation of faulty hips into roughly 100,000 patients. This is more than a slight slip up; it’s morally and ethically reprehensible. He may have been accomplished (good sales guy?) and competent (at lying?), but he certainly was not acting with integrity.

A definition that sets the bar

The definition of integrity is easy to find, but I like this one: a firm adherence to a code of moral values: incorruptibility (Merriam Webster). Other definitions use similar words like honesty, being whole, consistency of actions.

The question remains, how do we discover the true level of job integrity in another person? It’s pretty easy when you know someone over the course of years. It’s actually apparent when you play a round of golf with someone! But how do you flush this all-important quality out when you are considering them for an executive position in your company?

I don’t propose that the need for “high integrity” is not just for the CFO; in a perfect world, the entire C-suite and their direct reports would get A+ for integrity. I do maintain that because the CFO has a fiduciary responsibility (the bar in a capitalistic society), CFOs are naturally forced into deciding between difficult, competing interests on a daily and quarterly basis.  So if you are an investor or head an organization, the number one quality you should look for in a CFO is job integrity.

There are many other qualities that one must consider in hiring a CFO, and I will cover these in future posts. If you want to know how the CFOs I consistently place with clients are screened for their integrity, call me, Dave Arnold at 408-205-7373.