Have you ever been presented with a counter offer after resigning a position? Or, have you presented a counter offer to an employee who resigned?
Let me clearly state that one should (almost) never accept a counter offer, and why companies as a policy should (almost) never make them. None of the CFOs I’ve placed have accepted a counter offer. This dreaded possibility is always discussed prior to my making an offer on behalf of my client.
I was recently interviewed by FierceCEO for an article about counter offers, and as is frequently the case, the reporter only used a few of my words, so I’m jumping on this soapbox as a public service and as a refresher on this important issue!
Explore Your Motivation
It’s easy for a company to make a counter offer. Much easier than trying to get the work done without you and experiencing the pain that would be felt in your absence. But the truth is, as soon as you walk into your boss’ office and resign, a critical line of trust has been broken and will most likely never be repaired. Typically, counter offers include an increase in pay and perhaps a title boost. In my many years of recruiting CFOs and C-level executives, it’s clear to me that people don’t change jobs merely for money. There are a whole host of other reasons. Usually it’s because they don’t like their direct boss, they don’t agree with the strategic direction of the company, they don’t see a route up the ladder, they are bored with the work, they hate their commute, or their benefits are lousy and getting worse. Or a combination of some of these factors.
If you accept a counter offer for more money, the root cause of your unhappiness will still be in place. And, your increase in pay could be an annual increase just given early. Calculate the after-tax value of that increase. Is it really worth it? My cynical side also says that if you accept the counter offer, you’ve just provided cover time for your employer to start looking for your replacement!
Band-aid Solution
Most counter offers only put a band-aid on the wound. They usually start with praise about your important contributions or they present some big project that is coming up they plan on giving you. They almost always include some increase in pay. I don’t have research to back this up, but conventional wisdom says 80-90% of people who accept counter offers end up leaving within a year. I made that mistake myself once and missed out on joining my next company when the stock was much cheaper. I was fairly low level and the counter offer included a call from the CEO. Talk about being swayed to stay! I stayed ten months after accepting a counter offer. Lucky for me, the offer I accepted and turned down was still available!
People make a change because they’re moving away from things, or moving towards something — a better company, a better role, a shorter commute, etc. Usually people have some items on each ledger, a combination of moving away and towards. If you’ve lost trust in your current company and considering an offer elsewhere, think through what accepting a counter offer really means. If you take the counter offer, you have to tell your new company that spent weeks/months getting to know you that you will not be joining them. Good luck going back to them when your root problem returns in your new role! Making decisions is largely what executives get paid to do. If you second guess your decision to leave, what does that say about you?
The Exception!
I can think of one instance where a head of engineering resigned to the CEO having accepted a large role as division general manager in a new company. The new role was bigger than his current one and paid significantly more, but the company was not as exciting or successful as the company he was working for. This savvy CEO got to the root cause of this executive’s motivation for change — he wanted a more strategic rather than an execution role. The CEO didn’t make a counter offer to keep this exec in his role, he actually created a new position as head of strategy that fully enabled the potential deserter to remain with the company, reputation intact! So this was not a mere title change, it was truly a new job. (The reason I can tell this story is that the executive is my brother. He stayed in the new role for several years and later retired.)
If and when you do resign, do so with dignity and thanks to your current employer. Make a good hand-off and leave as quickly as you can without burning any bridges. Back up your verbal resignation in writing. You will need your references down the road. We are in an incredibly tight labor market, so be sure-footed and clear about your reasons for moving on. To steal from the Kona Brewing ad, “One career bro, don’t blow it.”
I invite you to share your experience with being offered or offering counter offers. Or if you’d like to learn more about our process and how it supports successful career decisions, email me at moc.srentrapdlonra@evad.
In celebrating the end of another successful year here at Arnold Partners, I gave thought to what happens once we shake off the satisfaction of completing a search, and the real work begins for our clients and placed candidates. As a general rule, I’m not personally involved in the details of on-boarding the new hire. I have an important regimen of follow-up with the executives involved, but certainly I’m not on-site to see how the new CFO is brought into the fold to maximize success. So, I reached out to some of my clients to educate me (and maybe you too?) about successful methods of on-boarding for success.
My client Shari Simpson, Head of Global Human Resources at Shockwave Medical, points out that while on-boarding a c-suite executive is different than an entry-level employee, “It’s very important that everyone deserves attention and respect from day one.” She says much more information is shared at the executive level about the business plan, company goals and objectives, and the timelines to achieve them, but the contribution of every employee is critical. Shari also states, “If the employer’s expectations of the new hire aren’t met in the first 60 days, the new hire is likely to leave. You don’t want any surprises in the new hire’s experience. You want their expectations of what it’s like to work there to be right in line with reality.” She goes on to say, “On-boarding is more than a check-list, it needs to be real and based on empathy for all employees and focused on mutual success — no surprises!”
John Owens, Chief People Officer at Sentient (and long-time client of Arnold Partners), chimed in as well on some important factors at the CXO level. He emphasizes the culture of the company during the interview process, specifically how the executive staff interacts with one another. How are meetings conducted? What are the key behaviors? Is communication tight and crisp, or is it long-winded and heavy on details? John says, “What you really don’t want is a new executive to fall on their face in their first executive meeting!” He also takes a lot of time in the interview process to explain the culture of the company, because, he says,“If you don’t get the cultural fit right from the start, it’s highly unlikely it will ever be right.”
Ms. Andy Danforth, former client of Arnold Partners, has some even stronger thoughts on the importance of on-boarding: “All new employees really want to have a formal orientation process, especially executives. The complexities of the executive role require that they learn the lay of the land before they dive into any form of execution. They need to know the who, the what, the where, and understand the expectations from all parties.” She added, “The on-boarding process builds momentum and is absolutely critical for retention. It’s really not an option — it’s mission critical to have a formal and well-systemized process for all employees.”
Finally, I had the pleasure to speak with Jennifer McKay, VPHR at Hercules Capital, placed there by yours truly. She had a couple of unique ideas to add: “The big thing is to communicate with new hires before they even start, and to set their schedule for them so they know what meetings they will be in, and with whom. Then, the critical part is getting feedback on their initial impressions. They bring a fresh set of eyes and ears to the company at a high level — they can offer some truly novel and unique ideas about what seems to be working well and what’s not. It’s like having a free consultant!” Jennifer also likes to meet with the new exec during the first week to talk about the star employees from their previous job. She keeps a list for future hires.
So, while I may hand the baton off to my clients after we have sign-off on an offer, I do believe our process is in lock step with the advice from above. It’s about respecting all the parties involved in the search process, it’s about getting the cultural fit right, it’s about being as clear as we can about the current situation in our client company and sharing the vision of where the company wants to go. Most importantly is long-term success. My speculation is that the long-term success of any hire may begin with the first recruiting call, and how the opportunity is presented to a potential candidate. For a refresher on this point see my video, https://youtu.be/eLdprDG_3Uw. There are many steps from there.
I’d like to hear your perspectives on on-boarding. Or if you would like to learn more about our process and how it supports on-boarding, email me at moc.srentrapdlonra@evad.
If you’re a CFO candidate, how many times have you seen a job specification and only casually glanced at it? I had a CFO candidate tell me just the other day that he had no reason to read the spec, because, as he said: “I already know very well what a CFO does.” I’ll admit as a writer of detailed position specifications, it’s easy to give less attention to the finer details, but that’s a mistake when you’re getting started with executive recruiting.
Being focused on one discipline as I am in the CFO role, it would be possible to become complacent and not dig into the nuances of the specifics in each client situation. But it’s critical to not fall into that trap! The round peg-round hole does not apply to executive recruiting, and the spec should carefully represent the uniqueness of each client we represent. Yes, there may be some similarities in CFO roles at different organizations, but experience has taught me that focusing on the subtle differences in each client situation is what enables us to find an exceptional match—vs. finding an also-ran.
Making the Deep Dive
The specification is a product of the deep dive into the company we are representing that reflects hours of diligence to understand the specifics of our client’s situation. Here’s an example that illustrates the benefit of this approach. My firm Arnold Partners was recently hired by a CEO to perform executive recruiting for a CFO following a meeting that was 99% about Arnold Partners—our approach, successes and past clients. As he was leaving for vacation he asked us to meet with his entire executive team. After an in-depth conversation with just the first person we realized that they didn’t need a CFO given their stage of development. We cancelled the rest of the meetings, no spec was needed, at least not for now.
We incorporate into the spec the unique qualities of the company and the strengths and weaknesses of the CEO so we can target the CFO who will bring complimentary skills and style. The spec is created in a way that can’t be duplicated robotically, and sets the tone for the partnership between company and search consultant, and the value that will be created with the right hire. Gaining an understanding of an IT’s company’s core technology and what makes the company tick is not a trivial undertaking, and we expect a few back and forths until we nail it.
Enticing the Candidate into Action
A spec should entice the candidate by sparking an interest in the specific opportunity or an idea for action. The goal is to have a prospective candidate think, “Wow, this was written for me!” or “This is not exactly right for me, but I know Joe would love to hear about this opportunity.”
I have said to clients in the past: “the spec goes out the window after the first meeting.” There’s some truth to that, but only because so much thought was put into the spec in the first place. The spec serves as a guidepost and may need fine-tuning after some interviews meetings take place, as “nice to haves” become “must haves” or vis versa. The spec can be a dynamic tool over the course of the search. The spec is worth obsessing over, and at Arnold Partners, we do. Clients should take a serious view of the creation process and CFO candidates should mind the details.
What’s your experience with specs in executive recruiting? I’d like to hear your thoughts or have the opportunity to help create one that creates extraordinary value for your company. Email me at moc.srentrapdlonra@evad or head over to our About page to learn more about how Arnold Partners can help with the process.
As the leading independent CFO executive search consultant, I’m interviewed about my search process and approach to search by prospective clients many times a year. But frequently I’m not asked some of the questions that I know to be the most critical, based on my 20+ years of experience in the search field. Given the key role of the search consultant in the hiring process, and the importance of making the right management hire to the bottom line, you wouldn’t think this was the case. I chalk it up to the idea that most executives only engage search consultants for exceptional hires so they do not have a lot of experience in this area. So, as a public service to any company contemplating hiring a search firm to assist on ANY executive level assignment, here are some key questions to ask.
What is your percentage completion rate for searches you (not the firm) undertake?
The answer can be hard to verify, but it’s critical to understand the completion and stick rate of the search consultant you’re considering hiring. Publicly-available industry estimates indicate that only 70% of searches are completed. It would be outrageous to pay 100% of the fee to a certain search firm if there’s a 30% chance that you don’t get a great hire, right?!
Look for an executive search consultant that is in the 90%+ range for completions. Our completion rate at Arnold Partners is 98%. The way to verify this is through the tone and sincerity of the consultant’s answer and by doing in-depth reference checks. The corollary to completion rate is stick rate: how do the placed candidates perform once in the seat, for how long, and how much value did they create? This can be verified by checking older references. I am FREQUENTLY asked how many searches I’ve done in the last six months. This is not nearly as important as: “Tell me about a placement you made two years ago, and what is happening with that placement?” Or “Tell me about a difficult search you completed, and what made it difficult?”
Who will be representing me and my company to the marketplace?
In most search firms, even boutique firms, the role of “sourcing candidates” is usually performed by the most junior people on staff. Partners, even in boutique firms, are incentivized by bringing new business into the firm. This means the person you meet when interviewing a prospective search firm is probably not the person that would represent you (initially) to potential candidates. The “sourcing” person may not really understand the nuances of you, your culture and/or the unique elements of the role. That situation is kind of like the game of telephone: you tell the partner/executive search consultant all the subtleties of your needs… they return to their office and have someone else write a specification… then yet another more junior associate reaches out to prospects. This is part of the reason for the 70% industry completion rate. In the case of Arnold Partners, while we use very sophisticated, data-driven research, ONLY Dave Arnold contacts prospects to ascertain interest and then qualifications — more on this in question 5.
Are you willing to “shoot for the moon” for me?
What I mean by this question is that every company has a level of executive they can realistically attract to their C-suite based on various factors unique to that company. Is your executive search consultant willing to push that threshold, to try to attract a pro-level player to a Triple-A club? There’s no harm in shopping at a level above your current team but this actually causes fear in most search consultants, because if the bar is set too high in terms of client expectations, the role may never be filled, and mutual frustration can result.
My approach is to shoot for the moon out of the gate, and have a realistic agreement with my client that if we don’t land that moon-shot after an agreed-to amount of time, we agree to re-aim our expectations. This can make for more work, but why try to land the executive you dream about?
What is the specific expertise of the search consultant handling my search?
There are two ways to go: the consultant is an expert in your industry, or they’re an expert in the function of the role to be hired. Obviously in my case, I’m a CFO expert and industry agnostic. Part of the reason for that is my belief that CFOs are industry agnostic because their skills and abilities cross over industry lines. That is not typically the case in other C-suite functions such as marketing or engineering. It’s OK to go one way or the other, but don’t hire a generalist. Your executive search consultant needs to answer to your liking to the question, “Tell me about your expertise in…”
What is the specific approach you will use to attract candidates to consider our opportunity?
It’s my opinion, based on many years of studying recruitment practices and training other recruiters, this is a good question because it will separate the wheat from the chaff. If the search consultant answers the question by saying they will sell your opportunity to candidates by telling them about you, and expounding on what a great opportunity it is, they have the cart before the horse. In my experience, a skillful search consultant will get the candidate to talk about themselves, their accomplishments, and aspirations BEFORE launching into a pitch for your company’s opportunity. Gaining this insight about the candidate is key to successful recruiting. By listening closely to the candidate’s words, a seasoned search consultant can determine whether it makes sense to go the next step. And if your executive search consultant regurgitates the spec as an opening salvo, take note, you may have the wrong search partner.
There are several other key considerations such as: current work load of the partner you’re considering hiring, fee structure, guarantee terms, conflicts of interest or “hands off” target companies, geographical reach, follow-up post placement, etc. But in my opinion, the five questions above will bring about the most important discovery, leading to the right partner for a successful search.
Let me know what you think about the best questions to ask when hiring a search firm and your own experience by contacting me at moc.srentrapdlonra@evad or call 408-205-737. For more great tips, check out the rest of my blog!
My CEO clients are always asking me, “How long will it take to find a CFO, Dave?”
By industry standards, an executive-level search takes between four and five months to complete, on average. This is backed by search industry statistics, as well as data from our project management software provider, Clockwork Recruiting, as noted in a memo they sent their customers last week.
Clockwork Findings
The Clockwork memo stated: “Over the last two years, Clockwork has been growing fast. We’ve signed up a lot of new executive search firms and we’ve migrated over 7,000 search projects from other systems like Bullhorn, Encore, Invenias, and Filefinder. Over that same two-year period, you—our Clockwork users—ran over 7,000 search projects inside Clockwork. This gave us two large, similarly-sized datasets to look at. We looked at “Days to Close,” a top Key Performance Indicator (KPI) in our industry measuring how long it takes to run a search project from start to placement. Thanks to you guys and your great work, the data show that projects run on Clockwork close 48% faster than the other guys.”
Arnold Partners Beats the Clock
We discovered that Arnold Partners is running 30% faster in “Days to Close” than the average Clockwork user. So that puts us at the top of the industry for a key measure that almost every CEO asks me about. By the time most of my clients call me, they are feeling like they should have started the search to find a CFO months, or sometimes years, before. They generally have a strong sense of urgency and want to know that the project will be thorough AND timely.
One major reason we can move more quickly than our competition comes down to focus. We meet CFOs every day. When we are called on to find that needle in the hay stack, we probably know where it is, or only need to move a few straws to find it. It’s never a new search in the sense of having to build an entirely new database of connections every time—it’s really an organic outreach to people we already know, warm calls to people with whom we have influence, who gladly take our call. Even if the role is not for them, they are quick to make referrals. This is why we never outsource candidate calls to associates or third parties. The CFO community wants to hear from Dave. Period.
More Important than Speed: Accuracy
However, I want to emphasize: more important than speed is accuracy. In fact, I don’t really want to be known for being fast or the fastest if people associate that with recklessness, sloppiness or lack of lasting results. What I want to be known for is our accuracy when we find a CFO. The truth is, over the last 20 years of recruiting experience, we have placed only one CFO that did not work out—far less than 1% of all our placements. And honestly, the reason had nothing to do with our process.
The Bottom Line: Value Creation
Our placed CFOs are extremely well tenured post-placement, creating massive value creation for their companies and stakeholders. Over the last 10 years our placed CFOs have created over $11B in value and counting. (Did you see our client Roblox just raised $92MM?)
So if you want to find the right CFO—the right way—right away, email me at moc.srentrapdlonra@evaD or call 408-205-7373. I look forward to helping you with a successful, long lasting CFO hire with the help of Arnold Partners’ connections and experience.
When you think of the word “headhunter,” what comes to mind? I generally have a distaste for the cannibalistic title as it engenders a scene of a crowded, bullpen-type work environment with individuals working furiously to fill open job orders—like the penny stock operation in Wolf of Wall Street. “CFO Headhunters” fall short of the complexity of what a real search consultant brings to their clients.
I have always seen myself first as a management consultant, establishing a relationship of mutual trust with Boards and CEOs where valuable advice is shared, strategy is discussed, and technology is understood. I also see myself as a career counselor with multi-decade relationships with the CFOs I work with, helping them make great decisions while in the chair or choosing the next one.
One of the key differences between transactional “cfo headhunters” and a true search partner is the depth of understanding about the client situation, the nuances of what is needed, and the particular characteristics of each candidate and how they would contribute value, both short and long term. Creating lasting value is what it’s all about—creating value for our clients through the actions of the placed CFO or Board Member, and creating value for the placed individuals as well.
Having that deep understanding of the client situation enables us to do what might seem like shooting for the moon: reaching out to potential candidates whom the client may think are out of their league. As Dan Steele, president of influential.co recently attested: “We interviewed 10 search firms before deciding to work with Arnold Partners. Dave Arnold was the only search consultant that felt he could source and deliver a candidate out of our league, or at least go after those candidates. The other firms all thought we would just be wasting their time and ours in looking for a superstar. In the end, we got a CFO that hit on all of our must-haves, and all of our like-to-haves.”
As I pointed out in my last blog about my relationships with our CFO and Board candidates, our ability to fully prepare a candidate for the client meeting is crucial to our mutual success. By truly understanding both the client situation and the psychology of our CFO candidates, we will be on target with the match, and bring the search to a faster completion. We have a track record of doing so; an independent service provider reported that our time to close is running much shorter than the competition. While we never feel rushed or pushed by a “bullpen” environment, our clients benefit from our diligent and persistent laser focus on CFO search and Board search, delivering expedient results that create long-lasting value.
By truly being a thought partner in the search, together we can persevere though the challenges all search assignments face. Sometimes it takes perseverance, sometimes charm, most times just plain old hard work, and even Lady Luck may play a role. No matter the challenge, when you’re ready to have a real partner—not cfo headhunters—helping with your CFO hiring needs and select Board appointments, please contact me at moc.srentrapdlonra@evaD or call 408-205-7373.
