I recently had the pleasure of spending some time in Paris and took a class at the Alain Ducasse School of Cooking. Monsieur Ducasse has built an empire and amassed numerous Michelin stars at his restaurants around the world. One of his protégés actually taught the course I took─conducted 100% in French! While my primary interest was acquiring skills in technique for the kitchen, I was surprised that as I julienned and sautéed, I gained fresh insights on the executive search process for hiring a CFO.
Preparation is the Key in Cooking and in Executive Search
The French say that before you start cooking you must be in a state of “mis en place,” loosely translated as “having everything in its place.” The course was Bistro cooking, meaning a simple meal well prepared. Of course, nothing could be simple in the world of Ducasse. Just as no hiring process is simple; whether you are hiring a junior accountant or a CFO one thing remains true: you need to know what you are looking for BEFORE you start looking. Mis en place! Mais oui, Chef!
An important part of my process when hiring a CFO for a client is first, to truly understand what they are looking for, and second, to help the client understand what they should be looking for. The discovery in this phase of the process goes beyond identifying the obvious skills of a CFO; it gets to the heart of the culture of the company, its growth plan, where the blind spots of the CEO are, how dynamics at the Board level affect the CFO hire, and more. This deep dive is the necessary prep work before any cooking can start. It is not trivial and must be approached systematically so when the real work begins the result is a timely, targeted, and effective search.
Three Hour Prep for Two Course Lunch Pays Off
We spent about three hours prepping a two-course lunch consisting of a white and green asparagus salad followed by a veal tenderloin with a green pea sauce. All the heavy lifting was in the prep. Once we got to “plating” and then the enjoyment of the meal, it was clear to me why we spent so much time in the prep.
When you are hiring a CFO and are presented with a slate of candidates for consideration, you are going to be happy with the results because the prep work goes on every day of the year at Arnold Partners, and the customization for your specific needs will not be short-changed. Prep, prep, prep. Mais oui, Chef!
Let’s get cookin’ on your CFO hire. I’ve got the recipe for success. Contact me at moc.srentraPdlonrA@evaD.
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.
When and How to Check References?
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?
A Two-Edged Sword to Swing Carefully
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@evador 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.
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.
This 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: afirm 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.
