What You Need to Know About Being a CFO Headhunter
I have a very specialized practice recruiting CFOs for small and mid-sized Canadian companies. The majority of my clients are owner-managed, and the revenue range of my client base tends to fall between $25 million and $250 million.
Recruiting a CFO for a $75 million owner-managed company is different than recruiting one for a $750 million company in that the search criteria can be quite a bit more nuanced for the owner-managed company than the large public company. Also, the impact the right CFO can have on a mid-sized, owner-managed company can be quite a bit larger than their counterpart in the large public company.
I’ll get a call to make a proposal for a CFO search for one of four reasons:
- The company needs to replace an outgoing CFO.
- The company wants to (confidentially) replace an under-performing incumbent CFO.
- The company wants to upgrade the person leading their finance function from controller to VP Finance.
- The company is hiring its first CFO.
Btw, in the small and mid-sized market, the title CFO is sometimes misunderstood. Some people think it’s synonymous with VP Finance. While a VP Finance is often the de facto CFO, a mid-sized company’s CFO could also be a Director of Finance; it’s a function of size, complexity and how hands-on the person heading up the finance function needs to be. I’d estimate that almost half of the CFO searches I conduct are actually for Directors of Finance.
In all the circumstances above – where an owner-managed company needs to hire someone to head up their finance function – there are five questions that need to be addressed:
- How much horsepower does the company actually need (VP Finance vs Director of Finance)?
- What does the owner-manager want accomplished by the CFO in the short term?
- How much operational and/or strategic input does the owner-manager expect from this position?
- Where will the company be in five years?
- What sort of person will fit in well with the owner-manager and the rest of the executive team?