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Hiring A “Strategic CFO” – What Do They Really Mean And How Do We Interview For It? A Note From Frederick Fox Recruiters

Hiring A “Strategic CFO” – What Do They Really Mean And How Do We Interview For It? A Note From Frederick Fox Recruiters

We often get the comment “I don’t want a numbers cruncher, I want a strategic CFO”. This can mean different things to different people in different situations, so we as talent acquisition professionals are often not really sure what is intended.

Below are a few thoughts intended to help better understand and find this characteristic:

Does “strategic” mean that we want them to create our long-range plans and budgets? Do they determine our strategy? The obvious answer is no, not really, at least not in isolation. Instead what we are looking for is someone who can do the following:

  • Understand our operations, our business fundamentals, our marketplace, and our competitive landscape and therefore meaningfully help in formulating strategy

  • Implement and guide a planning process (annual and long-range) to assemble and evaluate various department or divisional inputs

  • Ask good questions and prompt good thinking

  • Assess our plans and advise, for example, if some parts are unlikely to be achieved

  • Keep a total company perspective, constantly evaluate in a total market, and competitor context

  • Work well with others, at all levels and cross-functionally

  • Display good communication skills – a strategic CFO must articulate the vision.

These are the most basic elements, but if they are not present then it can limit our ability to address broader corporate strategy questions.

A few thoughts on how to interview for these traits:

  • Ask about their current planning processes, what was their role? What problems did they encounter, did they generally meet or exceed the company’s targets?

  • Ask about their current company and how it operates. This can elicit a lot about their general understanding of business.  A couple of quick examples:

  • What are your company’s key points of differentiation?

  • What does your market environment look like, how are you regulated?

  • Ask about how they would evaluate a sales and marketing plan. Benchmarking against prior years is obvious, but extra points get awarded if they:

  • Consider the reasonableness of sales plans against market share goals, or

  • Talk about promotional spend in a share of voice context, relating that back to sales objectives.

  • Ask about preparing a manufacturing plan: their cost build, annual capex review, in-house versus 3rd party evaluations

  • Watch for how they articulate their thoughts, are they “on point” or do they ramble?

Last, you may be confronting larger, more “macro” issues. Taking just one example, you may be deciding between an IPO, a sale of the company, or another round of bank financing. Consider the following when interviewing in this type of circumstance:

First, don’t expect them to solve your “mega questions” in an interview. Instead, determine how they would approach them. If they rely on the net present value of cash flows, that may be “financially accurate” but strategically unhelpful and insufficient. If they relate the discussion back to your market situation, timing questions, value step-up points, and risk/reward values and probabilities then they are displaying a more strategic framework.

Just a few quick thoughts on the topic, we hope it was helpful at your end.

At Frederick Fox we specialize in placing senior financial executives, so feel free to contact us for a more detailed, much more client-specific assessment of what your company might need in a “strategic CFO”.

****The author recently joined Frederick Fox as a partner. He was formerly the CFO at 5 public companies and a member of the board & audit committee chairman at another****