How Not to Search for a CFO

A year or so ago I got a call from the CEO of a $50mm roofing contractor who needed to hire a new CFO. The CEO was the son of the founder of the firm, and had been at the helm of the family business for about five years. Dad had ostensibly retired but still came to the office most days. As much as I think he was trying to let his son run the show, my sense was that the father was still pretty involved in day to day operations and executive decisions.

The $150,000 Bookkeeper

It seems that the incumbent CFO was not a qualified accounting professional but rather someone with some accounting training that had been referred to the firm some years before and had, over the course of the years, morphed from bookkeeper to CFO. By the way, this a very common phenomenon in owner-managed businesses that go from mom and pop shops to much larger, much more complex, businesses. In most of these instances, although the business becomes much more sophisticated, the technical sophistication of the top financial person doesn’t really change. So many owner-managers find themselves in the position of paying a CFO’s wage to someone who is basically a bookkeeper / senior accountant.

Oh – oh, the Bank Called

This was the case with this prospective new client. What had precipitated the CEO’s call to me was that the CFO had inadvertently put the company offside with their bank. But when I met with the son and the dad to discuss how I would recruit a qualified, experienced accounting professional to take over their finance function, I discovered that the incumbent wasn’t providing any of the basic services one might expect from a controller or a Director of Finance (kpis, basic management reporting and variance analysis, internal controls, etc.).

What Are You Looking for in Your New CFO?

When the three of us got into the needs analysis, preferred candidate profile part of the discussion, it was a bit of tough sledding. Father and son may have been expert in all things roofing, but they knew virtually nothing about what they should expect from the accounting function. I tried to drill down into things like costing, estimating, performance metrics, etc., and all I really got back from the two of them was “Just get me a good guy!”

I countered with “Yes, I’ll certainly get you a good person for the job, but let’s define what that looks like a little more specifically.” And for the life of me I couldn’t get them to give me a definition of what that person would look like.

So I suggested that before I engaged on a full blown search for them, I show them a couple of potential candidates that I thought might fit the bill.

Good Fit / Not a Good Fit

Fast forward a week and father and son met a candidate that I thought was a very good fit. He was from a contracting company, albeit not roofing, had a very solid resume and interviewed very well.

The son kind of liked this candidate but the dad thought he wasn’t a good fit. I asked why and all I got in return was “He’s had too many jobs. Get me someone who’s more stable.” (This person’s average tenure in each job, including his current position was five years or more.)

So I sent in candidate number two, also a very good fit, at least according to me, who was with his last company for fourteen years. Here the feedback was “Didn’t like him, not enough ambition and fire in the belly.”

I pointed out that if they were looking for someone with a lot of ambition, someone who’s spent the last fourteen years as a controller with the same company probably isn’t going to be a good match.

I Don’t Hunt Unicorns

After another couple of conversations in which the only consistent direction I could get from père et fils was “Just find me a good guy”, I concluded that this was going to turn into a unicorn hunt and I politely declined to take on the search.

A month or so ago, I got another call from the CEO of this roofing contractor. It turns out that they had tried to fill the job through online postings, personal referrals and looked at a few people through a placement agency and still had come up short. They finally concluded that they were ready to reboot the search and could I come up and meet with them again?

Let’s Try This Again

This time out we had a good discussion around what the issues were, put together a detailed delineation of the responsibilities and the scope of the position and created a preferred candidate profile that we all agree on.

Given the urgency of the search, it would have been much better for the client if they had been willing to go to the trouble of setting up the search properly when I had first met with them four months previously. So that’s the bad news.

The good news is, that as of this writing, I’m confident that I’ll be able to find, and more importantly, they’ll be able to recognize and hire, someone who’ll do a great job as their new Director of Finance / CFO.