Interim CFO – What Are The Ideal Qualities?
February 5, 2010
Interim CFO
In today's economic climate, the Interim CFO must immediately consider whether the company has sufficient resources to withstand a downturn.
Alternatively, your Interim CFO must also ask … "Can it withstand a serious competitive attack and respond by funding alternative investments to ensure survival and growth?"
Essential qualities of an Interim CFO are substantial change management and transition implementation experience coupled with the personal attributes to make it happen.
Without strong interpersonal and communication skills, gravitas and team leadership capabilities, an Interim CFO is unlikely to succeed … however strong their technical background might be.
The need for an Interim CFO to demonstrate these qualities is paramount, especially when an interim CFO is dropped into a crisis situation requiring a fast turnaround.
Interim CFO executives will have a track record of at least five to ten years at or near board level experience. They will have previously held a senior management level positions and/or have been a head of an accounting / finance function at companies of similar or larger size.
The Professional attributes for success of an Interim CFO include … (and ones that you should look for in their track record when hiring an interim CFO):
- turnaround experience
- de-risking and debt pay down
- banking relationships and managing covenants
- cash management
- fixing poor internal controls
- built foundations for growth or market downturn
- restructurings, downsizing and cost management expertise
- merger & acquisition integration
- Board conflict and acceptance
- preparation for sale / liquidity event
- de-risking and debt pay down
- banking relationships and managing covenants
- cash management
- fixing poor internal controls
- built foundations for growth or market downturn
- restructurings, downsizing and cost management expertise
- merger & acquisition integration
- Board conflict and acceptance
- preparation for sale / liquidity event
Personal attributes for success of an interim CFO include:
· indications of a high achiever (someone who is proactive, results-orientated, positive, prefers a hands-on approach and makes things happen);
· An Interim CFO is politically sensitive without being drawn into the politics;
· understands the need to stay objective and will not go "native," particularly on an extended assignment. A private-equity firm will require the interim CFO to remain a strong link between them and the investment;
· someone who can stick their neck out and say it how it is, using fine judgment;
· An Interim CFO is not concerned with personal status and can take that necessary step down in responsibility level easily and willingly;
· Your Interim CFO has the ability to operate at different levels and to demonstrate flexibility is essential in a change situation, where the goal posts can move from the day one steps into the assignment. Equally important is the need to adapt quickly to different cultures, sectors and organizations;
· The Interim CFO also has the ability to establish immediate credibility – particularly important as the sponsoring client may have made a brave move in introducing the first interim executive into the organization at or near board level;
· Your Interim CFO will take the team with them very quickly, establish themselves with their peer group and generally sell the concept of why they are there on arrival;
· An effective Interim CFO has exceptional interpersonal skills and positive attitude should be immediately apparent and their "over-qualification," combined with a touch of humility, ensures quick integration
· Finally, an Interim CFO displays personal financial security and fulfilled career ambitions.
The new Interim CFO is, in effect, undertaking a business rescue or re-start with all the associated risks. You should be prepared to compensate your Interim CFO accordingly as his / her experience will go a very long way to re-start your company and lower the anxiety level of your lenders & investors.