Selecting a Chief Financial Officer

An Intuitive Guide to Selecting a CFO

James R. Fisher, Jr., Ph.D.
(Copyright December 2000)

Companies are finding it increasingly hard to stay afloat. Invariably, when the screw turns to unhinging things, the CFO comes in for taking the heat. In most instances this is patently unfair because the CFO is behaving precisely as programmed to behave, that is, crunching the numbers and leaving the leadership to the CEO. But in today’s global economy the CFO needs to more resemble the Renaissance man. He or she can see – by the numbers – where obsolescent skills and job categories are counterproductive, where current production processes are anachronistic and cost intensive, where product lines, perhaps of historic nostalgic value, need to be discontinue, where entire businesses no longer fit the business plan, and where relocation is not only prudent but necessary. Unfortunately, too often the CFO waits to be asked about such matters rather than being the soothsayer of trouble ahead. Again and again, I have had CEOs wonder in consternation why a particular CFO failed to work out. That is how I have come to design this intuitive guide to the selection of the CFO.

Senior management, it has been my experience to discover, accepts the vicissitudes of the market place, the changing demands of consumers, the soaring complexity of technology and competition, and economic oscillations far better than it accepts the vicissitudes of performance of its Chief Financial Officer. It is a consuming frustration for the Chief Executive Officer to find a CFO with whom he or she can relate as well as trust to have the same vision and grasp of what he or she is trying to accomplish. In a word, when trouble comes (and come it does in increasingly surprising forms), it often falls to the shoulders of the CFO to explain what commission or omission in has led to crisis.

There are books written on the selection process of key executives, none more copious than that of the CFO. Often a select committee of the most discerning minds does a detailed search and comes up with a representative assortment of skills, accomplishment, and evidence of courage under fire, which profile the man or woman for the job. I have no problem with this detailed investigative process. It is time consuming, costly, and alas, necessary. My problem, and I find it repeated again and again, is with the final stage, the actual selection of the CFO.


CFO Selection Phase

Once the process of recruiting, screening, and interviewing several candidates is completed, a select number becomes the critical mass to determine who should get the job. I have developed an extremely simple intuitive guide for the selection of the CFO.

There are three critical dimensions to this phase in the hiring process. These dimensions are either consciously managed or unconsciously experienced. In either case they happen every time during the selection phase without exception. They are:

(1) Am I (the interviewer and selector) comfortable with this person?
(2) Will this person fit in my organization?
(3) Is this person qualified to do the job?

Obviously, the emphasis during the recruiting phase is placed on qualification. But the actual selection of the person to be hired invariably is reduced to the first two dimensions, and always in the order listed. Qualifications may get the person in the door with manipulative charm paving the way through the herd to the final line of candidates. But it is no guarantee that this person will or should be hired. None whatsoever. This is precisely why the selection phase needs in depth review.


Dimension One: Am I (personally) Comfortable with this Person?

Comfort is an intrinsic characteristic. Without much fanfare, we are more or less comfortable with others for rather difficult to define reasons. However, there are broad aspects of our character that give us ample indication of our comfort level.

Comfort is manifested in very specific responses to what we personally:

(1) Value
(2) Believe
(3) Expect
(4) Consider important
(5) Need

(1) What do you value?

This gets to the core of your personality and what drives your own behavior. We all act very much in accordance with what we value. To help you in considering your values, react to this list honestly and completely in a note to yourself. On a scale of one to ten, with ten the high and one the low, indicate the value you place on:

Family
Religion
Freedom
Love
Trustworthiness
Faith
Work
Competence
Skill/Talent
Intelligence
Loyalty
Honesty
Courage
………… add or subtract from this list as suits you.

Then make personal comments on the side why you consider each of these particular values as a reflection of your character and personality. Make the list as complete as you like to comprehensively cover what you value. As you interview the candidate, you will intuitively sense how the candidate resonates with your value system. I say “intuitive” because chances are you will not be aware of the comparison or, indeed, of the compatibility of values, leastwise consciously.

Now that you have a list of these values, break them down into instrumental and terminal values. Instrumental values are of two kinds: moral values and competence values. The concept of moral values refers to modes of behavior with an interpersonal focus. Moral values arouse pangs of conscience or feelings of guilt for wrongdoing.

The concept of competence values refers to modes of behavior with a personal focus. Such values have little concern with morality. Violation of competence values leads to feelings of shame about personal inadequacy rather than feelings of guilt about wrongdoing.

Terminal values are of two kinds as well: personal and social. Terminal values may be in terms of a focus on being self-centered or society-centered, intrapersonal (within a person) or interpersonal (between persons). Such end-states as “salvation” and “peace of mind” are intrapersonal, or within the person and relating only to the person. On the other hand, a quest for “world peace” and “brotherhood of man” are interpersonal.


Thus, it can be seen that instrumental values deal more with modes of behavior, while terminal values deal more with end-states or existence.

Once you interview the candidate, and are now puzzling over what impressions he or she has is making on you, it is a good time to develop a VALUE PROFILE of this candidate compared to your already developed self-profile. It doesn’t have to be fancy, or in detail. It doesn’t even have to be in complete sentences. It is your journal guide to how the candidate stacks up to your own personal VALUE SYSTEM.

(2) What do you believe?

Like what you value, what you believe brings you in contact with the core of your being. If you are clear on what you believe, are not afraid to admit to yourself your biases, and convictions, then you are in touch with your BELIEF SYSTEM. It is this belief system that has served you to this moment, and is mainly the reason you have gotten to where you are. Knowing, accepting, and understanding your belief system provides you with an arsenal that protects you from (a) being duped by the guile of the candidate, and (b) misunderstanding why you react to the candidate the way that you do. Your beliefs have much to do with your approach to:

Work
Life
Relationships
Challenges
Failures
Disappointments
Surprises
Leisure
And so on…..

You may have a work ethic that makes you a workaholic when the candidate subscribes to a balance between work and play. Does the candidate live to work or work to live, or is he or she somewhere between? You must ask yourself if you can live with a candidate that has priorities different than your own, a candidate that would leave the helm for an important family event, and so on.

Candidates are interviewing you as well, and may sense that sincerity and honesty are best put on hold. So they tell you what they think you want to hear. So, if you are not in touch with your BELIEF SYSTEM, and listen but don’t hear, look and don’t see, you are in for a scary ride. Evaluate the responses later. Now, just let them resonate within you.

But be assured the candidate will either be sincere and open, or put up blinders on the basis of how he or she interprets your needs. On the other hand, implicit in the candidate’s answers may be the seeds to a problem. The candidate may not be hiding from you, but hiding from him or herself, with you sensing an equal fear of success or failure. If you sense this, explore it, now! Don’t wait. Success and failure are two sides of the same coin. Beliefs often overlap with values and amalgamate into a high need to please. Such a candidate will have difficulty asking the hard questions, and giving you the bad news before it explodes in your face.

Every business has core beliefs that are critical to its success. It would be well for you to detail these in a form useful to you that may be compared to that of the candidate’s.

(3) What do you expect?

The first performance review is conducted before the candidate is ever hired. It is at that time that the job is defined, the dimensions of the responsibility are outlined, and the scope, and level of accountability is agreed upon.

The most difficult aspect of EXPECTATIONS is that what is expected may have little to do with the actual job of being CFO, but have much more to do with the comfort level of the CEO. What is easily forgotten is that the candidate is being hired to perform a function, not to be a golf partner, a drinking buddy, or a person who treats the office as home. It is not the function of the position to emulate and imitate the CEO or the cadre of interviewers. What is expected should be closely and specifically related to the function to be performed.

If there is any miscommunication at this point, it will surely be acerbated once the candidate is on the job. Every company is structured in a proprietary way. This leads to how the company actually functions, which in turn leads to how people at all levels behave in the conduct of their business. It is this invisible hand, let us call it “culture,” which touches everyone and everything that determines the results expected compared to the results achieved. Culture is a word that often confuses but it is a definite presence in all organizations.

The CFO is a critical function. But if the emphasis is put more on fitting into the country club crowd, the social calendar, and the sporting and charitable activities sponsored by the company, results achieved may lag behind. The likelihood of success for the new candidate is practically nil. On the other hand, if the focus is on the job, on the function, and the requirements of the function, as well as the parameters of accountability, the candidate will know the job comes first, and he or she can then decide where he or she fits in the balance of the scheme.

What often happens with a CEO is that his or her expectations are not that closely related to the function. Albeit not intended, a CEO’s private agenda may muddy the works. Without desiring to be paternalistic or patronizing, he or she is. This gets the candidate off on the wrong foot. If a CEO expects the CFO to live up to his or her expectations, the CEO is bound to be disappointed. The function should be center stage, and the expectations of the CFO the relevant consideration. Every person, no matter at what level, wants to own what he or she does, to put their own imprint on the function. Therefore, the CFO will want the freedom to perform the function and to have the benefit of the trust that goes with it, along with a guiding hand to learn the ropes of the business to fit in as part of the executive team. If the CEO can control his or her expectations in the beginning, chances are they will be realized in the end, not as an imitation of expectations, but as a manifestation of the CFO’s perfection of the function.

So, during the interview, keep in mind that you want a “take charge” person who is a learner rather than a knower, a listener rather than a teller, and who isn’t afraid to be confrontational, if necessary, but always politely and discretely.

(4) What do you consider important?

Each business, like each individual, is unique. As a “rose is a rose is a rose,” so this also holds true of your operation. Eventually, the new CFO must fit in to the scheme of things as he or she becomes familiar with the working culture. What is considered important in your company is sacrosanct to the way you conduct business. This is conditional to success whatever the discipline.

In order for the comfort level to be assured, what needs to happen during this phase of the selection process is that what is important to you and the company must be equally important to the candidate. Importance, then, relates to what has meaning to both.

All of us act towards things on the basis of what they mean to us. And what things mean to us involves an interpretive process. Everyone believes in quality, customer requirements, performance, profitability, growth, progress, and company image in the marketplace. These are givens, but yet they are relative. For example, what actually takes precedence in terms of “quality” when schedule is in jeopardy?

Quality may be important but meeting schedule may be more important. Is the candidate going to have a problem with this? Customer requirements are obviously important. But what happens to customer requirements when operations are preoccupied with managing internal conflict? Or when market share is disappearing?

No matter who the candidate is, once on the job, the discerning CFO will separate rhetoric from reality and match his or her performance to this perception, as a matter of survival if nothing else. Is this what is desired? If not, will the CEO have a problem with a CFO who challenges mix messages, operational duplicity, and sticks to his or her guns?

In a word, then, you must have a firm grasp of not only what you wish to consider important, but also what the dominant workplace culture actually indicates is important. A feisty candidate, who you sense can’t be pushed around, could be discounted as a trouble maker when he or she is actually the medicine needed to put operations on a more even keel.

(5) What do you need?

Needs swing the gamut from security and ego needs to physical and survival needs, and from self-esteem to self-fulfillment needs. You, as an interviewer, must know where you stand in these needs because your needs can surface at any point in the selection process as you interview the candidate, blinding you from a clear and perceptive view of what the candidate has to offer. It is not wrong to have convictions and biases. What is wrong is not to understand them. They are the equivalent of looking at the world through rose-colored glasses.

One of the powerful ironies of life is that the higher we rise in the company the more – not the less – sensitive we become to these needs, and therefore, the more inclined to be bedeviled by them. You think you need a CFO who is competent, innovative, quick to discerning and solving complex problems, and of impeccable integrity. And you do. But additionally, it is important that you be able to accept his or her baggage that comes with the candidate. To do this, you must first be aware of, and accepting of your own peculiarities. It is not enough to “know thyself.” You must also understand and accept yourself as you are in order to understand and accept the CFO as he or she is. Everyone with great strengths come also with great weaknesses.

What is helpful is understanding the relationship between role demands and self-demands. Role demands are the job. Self-demands are those things that surface when we find ourselves on the defensive – “How could he (she) treat me that way? Don’t they know who I am?” Self-demands relate to the person. Role demands relate to the profession as well as the job.

When you have a firm grasp of role demands, you define the situation clearly and accurately. When you are obsessed with self-demands, you define the situation poorly. Warring self-demands between the CEO and candidate may become tangled in a web of conflict. A CEO might precipitate this by projecting his or her buried resentment into the candidate without having a clue that this is occurring. That is why it is important to give pause and measure your feelings as the interview progresses.

Needs are both physical and emotional. What is germane to the CEO is being aware of the emotional climate and state of mind of the candidate. The optimum climate is an interview in the rhythm of two engaging minds. Forget being cognitively alert, for the only accurate interpretive barometer is intuitive. Don’t deny it. Use it. And certainly don’t disparate intuition as meaningless mumble jumbo. Intuition is bombarding your senses with this candidate’s reality, which is beyond resume and words, beyond appearance and nonverbal actions.

A person may reassure your comfort level by his or her appearance, voice, experience, interests, command of language, personality, or any number of other attributes. By the same token, knowing what impresses you and what does not, knowing your own needs, may enable you to control the interview and direct its focus as if, indeed, an assessment center process. An assessment center simulates work related challenges that give an indication of how the person might actually behave on the job. You do this by calibrating intuitively the answers to these questions:

(1) Is the candidate secure and confident in his or her own right?
(2) Is the person a good listener, does the person listen and hear what you say, not what he or she thinks you said?
(3) Does the person make you feel comfortable?
(4) Is the person on the level, or is he or she clearly in the business of making an impression?
(5) Can you see this person taking ownership of a problem?
(6) Can you see this person interacting well with the type of customers you have and having a good professional presence?
(7) Can you envision this person discharging his or her function with skill and efficiency?
(8) Can you see this person asking for help when needed, and not trying to go it alone?
(9) Can you sense that this person would be good at building a team?
(10) Can you see this person fitting in with other members of the staff?
(11) Do you see this person as an officer in officers’ country, or operating as an enlisted man or woman in officers’ country?
(12) Does your antennae tell you this person is a leader or a follower?

Once the comfort level has been engaged, and met with satisfaction, a third of the process has been successfully navigated. The last three questions (above) move you into the next dimension.

Dimension Two: How well will this person fit into your organization?

You are the architect of a working culture whether you know it or not. The working culture you have created reflects how you actually conduct the business. It is how you have programmed the work force to respond to the business at hand, and its challenges. Everyone, at every level, responds to this culture. It can drive a wedge between what is promulgated and what is in fact produced. Programming is often not a conscious process, but what becomes acceptable, operationally, over time. It becomes the consensus perception of what is suitable behavior and what is not. It is not what is said that makes the difference but what is allowed and what is not allowed.

If the working culture demands politeness, obedience, loyalty, and conforming behavior to arbitrary standards, that is what it gets. Workers in such a climate react to instructions with a high need to please the boss. The tendency is not to take the initiative, or to take risks, but to conform and comply. And most certainly, it is not to challenge the boss, even when he or she is wrong. The boss acts as surrogate parent to the worker as obedient child. Workers are management dependent and the culture is comfortable. Behaviorally, workers are reactive and suspended in adolescence.

On the other hand, if the working culture allows a certain chaos and dynamic to exist, where workers are encouraged to take risks and challenge authority when need be, workers are not afraid to demonstrate their maturity and to have meaningful input at the level of consequences. They see themselves as partners with management to get a job done. They are disinclined to point fingers at who is wrong, but more obliged to deal with what is wrong, and what should be done about it. This is a culture of contribution where teamwork is not only a word but also a work ethic.

How well a person fits in is dependent upon this dynamic, that is, between a culture that spawns terminal adolescence and a culture that sponsors responsible adult behavior. A culture of comfort is inclined to tell you what you want to hear, not what you need to know, whereas a culture of contribution is of the opposite persuasion.

Let us assume that you have a workplace culture of mature adults dedicated to a common objective. Chances are the candidate has not come from this experience. How can you tell? More importantly, how can you tell whether or not the candidate will be amenable to a more challenging situation?

Well, the fact of the matter is you can’t tell, leastwise not cognitively. His or her vita and words may be right in line with this cultural aspect. But words lie. Deeds do not. Therefore, the fit, as perceived in the interview, is on a visceral level, which is not bad. In fact it is usually not far off the mark. But improvement can be made on this if some rationalism is engaged as well.

It is necessary that before the interview that you ask yourself some hard questions, the answers to which perhaps are beyond the candidate’s experience. For example, you may sponsor excellence but mediocrity may be the only experience of the candidate. If this seems a harsh judgment, consider that far more companies are in the arms of comfort and complacency than contribution. Obviously, the candidate has heard the spin of excellence and contribution, but may have grown cynical as excellence and contribution have been discouraged, not encouraged. “This is not so,” you say.

Well, there is a way of finding out. The candidate says he supports teamwork, but admits everyone in his or her experience is measured and rewarded individually. How about performance appraisal? Oh, yes, the candidate’s company is into this. Of course, it is as this remains standard operating procedure for most companies, and is a mediocre driven process. Why?

First, because it does not encourage feedback, and most managers aren’t trained to know how to encourage, much less process feedback. Second, performance appraisal implies if it does not state that “one size fits all,” which makes a mockery of individual assessment. Third, it takes time to do performance reviews, not to mention the requirement of special skills, skills not unlike interviewing candidates for such important positions as CFO. Fourth, once or twice a year is not sufficient guidance to improve performance and to give meaningful feedback. Fifth, performance reviews are intended to be tools for self-improvement and to maximize an individual’s inherent abilities, not a punishing device or a justification for giving bonuses or pay increases. Sixth, a performance review shouldn’t be a one-way street, but a meaningful dialogue between partners interested in a common objective.

You may believe in honest feedback but the pipeline the candidate has known in the past tells him or her the messenger always gets killed. Inconsistencies may differ greatly between your working culture and the candidate’s experience. You must be alert for such signs.

To give you a sense of this, you may wish to ask the candidate about his or her feelings regarding:

(1) A Crisis Managed Culture: Such a workplace culture is a reactionary culture. It is in the business of creating problems, and then solving the problems it has ineptly created, then congratulating (and expecting to be rewarded) itself for the solving of them. Strange as it may seem, it doesn’t take workers long to realize if they don’t create problems to solve they don’t get ahead. As a consequence, they are constantly putting out fires they start, never learning from past failures. Why? It could be that they are trying to do everything right the first time, and are afraid to make mistakes. This encourages cheating and hiding chronic problems in a blister of activity. Focusing on the right things addresses chronic problems and realizes big payoffs. It is the 20 percent “right things” that make 80 percent of the difference in the bottom line. Conversely, it is attempting to do everything right which dilutes effort and masks real problems. Crisis management is a tactical approach. Managing and solving chronic problems is a strategic approach. Moreover, a crisis-managed culture encourages Cover Your Ass (CYA) and Show Your Ass (SYA) games, and generates “we/they” polarity. Paradoxically, heroes are made and celebrated by a crisis-managed culture. Such a culture often has many stars but few victories as success is passé. Probe the candidate to see what he or she thinks about crisis management, and where he or she fits into the scheme from past experience.


(2) A Teaming Culture: Problems in a teaming culture have the benefit of synergy. The energy and focus is on what is wrong, not who is wrong, on anticipating and dealing with potential problems before they become crises. There is no appetite in the teaming climate for crisis management or CYA or SYA games. In any case such behavior is not rewarded. What is rewarded is the bottom line, and the bottom line responds to solving chronic problems. Moreover, in a teaming climate success finds everyone at the banquet. Management is not rewarded independent of workers, but in a common partnership with them. This is understood without the necessity of stating it. So everyone from the get go works to support each other in customer friendly terms, and to resolve problems as quickly and as efficiently as possible, not from the rarefied heights of the Boardroom, but at the level in which problems occur. No one is looking to see who gets the credit. The focus instead is on what needs to be done to put operations back on stream.


(3) Knowing versus a Learning Culture: A workplace culture predisposed to being a knowing culture is afraid to make mistakes, to take risks for fear of failure, or to fail to please. Not surprising, such a culture is driven by a need not to lose rather than to win. It is like a team that tries to protect its lead rather than to continue to soar with its natural momentum. Members of such a culture rarely succeed in the long run. They perfect an image and then attempt to reify it. This finds them punishing others with their special knowledge rather than making it user friendly. Knowledge for them is a weapon to manage with brutal skill. At the same time, ever fearful of being found ignorant, the knower is slow to take on new ideas, slow to take advantage of opportunities, and slower still to threaten the status quo. A company so saddled is moving with forward inertia and headed for a fall. It is not a stretch to say that such a company will one day be a figment of the imagination. A learning culture, on the other hand, is likely to be chaotic, dynamic, uncertain, full of insouciance and creative play. Such a company embraces its uncertainty rather than being paralyzed by it. This is not out of arrogance or flippant disregard for the seriousness of its challenges, but because of them. The company makes mistakes, but learns from them. It is committed not so much to doing everything right, but to focusing on the right things. Paradoxically, the more accepting the climate for legitimate errors the less likely they are to occur. Conversely, more the obsession with avoiding errors at all cost the more likely they are to reoccur.

Dimension No. 3: Is this candidate qualified to do the job as CFO?

The United States produces ten times more MBA’s than any other advanced society. America’s graduate schools of finance are the best in the world. There is not a shortage of highly qualified candidates. Qualifications alone, however, have become an iffy business for many reasons. For one, it is not difficult to find scores of available candidates with impeccable credentials and stunning curriculum vitae to be CFO.

Less obvious in terms of qualifications is the balance between the five most critical aspects of discerning intelligence that the qualified candidate must demonstrate. These five aspects are:

(1) Memory
(2) Comprehension
(3) Problem solving skills
(4) Creative thinking skills
(5) Decision-making skills


We could also add passion for the work and courage to stay the course when under fire, but these are difficult to measure in an interview. You can sense these, but it is nigh impossible to calibrate them.

Most candidates who have had a solid academic background score reasonably high with regard to (1) and (2). That is because our American educational system concentrates heavily on memory and comprehension of facts and figures. There is little practical development of the other three aspects. Western thinking fails by putting the emphasis on linear logic, quantitative analysis, and objective determination.

Obviously, these critical thinking skills are necessary, especially for a CFO. But creative thinking often does not complement critical thinking. This puts the emphasis on process rather than perception, identity of key aspects rather than on their flow, on information rather than ideas, on deductive reasoning rather than intuitive thinking, on description of problems rather than bold provocation of their aspects, on judgment of facts rather than the movement of variables, on focusing on elements rather than viewing them as part of a system, on looking backward rather than forward, on seeking stability rather than engaging change, on defending the status quo rather than exploring challenges, on personifying cleverness at the expense of wisdom, and on falling back on arrogance at the price of humility.

It is a rare candidate that escapes this imprisoning conformity in pursuing his or her education, but it is such an individual that is most needed today. If the candidate has not developed these aspects on his or her own through job experience, chances are they are not there. Furthermore, chances are the candidate is more inclined to be a knower (data dumping knowledge) than a learner (creative problem solver).

Fortunately, you have an opportunity to see how well the candidate thinks on his or her feet, and how well he or she can articulate the solution to a proffered company problem. You don’t have to give out trade secrets. What you can do, however, is present a problem in generic terms.

Problem solving skills: Relate a thorny financial problem of the company that was successfully resolved. Compare the candidate’s approach to the problem to that of the company’s. Once the candidate has offered his or her solution, you might share the company’s solution, and measure the candidate’s reaction. This gives you the added advantage of dovetailing other dimensions covered previously in the interview, such as the candidates ego needs, team playing orientation, and comfort level in the hot seat.

If the candidate should become defensive, back off and see how the candidate reacts. Defensiveness indicates injury to the candidate’s ego. On the other hand, should the candidate enthusiastically enter the fray, seeing both solutions as viable, or seeing one solution more viable in the short run and the other in the long run, you have successfully established a dialogue. You have engaged a confident problem solver.
Creative thinking skills: You can gauge this by asking the candidate to illustrate his or her most significant achievement. As the candidate is outlining the approach taken, you might evaluate the response in terms of:

(1) Original thinking,
(2) Boldness of approach,
(3) Comprehensiveness, and
(4) Impact on the bottom line. If the candidate leaves this out, ask for it.
(5) Ask, “How did the solution make a difference?”

If the candidate is reluctant to share such detail, it could be modesty or a matter of nerves. What you wish to discover is if the candidate is at all inclined to creative thinking, or is totally driven by critical thinking.
Decision-making skills: Here you may proceed in a similar manner to the previous category. A brief case study might be an option, or better still, a truly ambivalent decision-making problem that currently confronts the CFO.
What you are looking for is:

(1) The dispatch with which the candidate takes control of the decision-making process,
(2) How the candidate would acquire relevant data and generate support for his or her approach,
(3) The level of participation the candidate would expect in the decision-making (Were people involved where the decision would have the greatest impact?), and
(4) The candor with which the candidate takes responsibility for the possible downside of the action taken.

The Final Analysis to the Intuitive Selection Process for the CFO

There is an implicit agenda at work here. What you are attempting to uncover throughout this process is:

(1) Can I depend on this individual to support me and the company in our quest to compete at the highest level, and
(2) Can I determine from this interview with some certainty that we will be a team greater than the sum of our parts?

The candidate you need is not afraid to confront, not afraid to challenge, not afraid for the job, and not afraid to look stupid by asking embarrassing but necessary questions. Moreover, the candidate is not afraid to take risks (within reason and when they are needed), or to look bad while being committed to performance. He or she is a learner, not a knower.

A knower always plays it safe, and is often clever but seldom wise. A knower is an adept politician and knows how the prevailing political winds are blowing. A knower is a consummate manipulator, whereas a learner is an enabler – helping others become better at what they do. A knower, on the other hand, attempts to make everyone into his or her image and likeness.

Still, in the final analysis, once all the other interviewers have submitted their reports on the candidate, you have to make this most important decision. To do this with candor, openness, and above all, discernment, you must look at the company in terms of where it is and where it is going:

(1) Is the company a visionary organization, moving out into unknown waters where creative thinking and inventiveness are critical to the company’s success?

(2) Is the company a growing organization with all the concomitant problems of growth such as cash flow management, soaring cost in recruiting, selecting, hiring, and training personnel, the distractions of investor demands, the increasing complexities of technology, along with the shrinking market due to escalating competition?


(3) Is the company a maintenance organization where the emphasis need be on holding on to gains and stabilizing the business?

(4) Is the company a declining organization, which has lost its zest and is clearly in decline? Here you may desire to package the business in such a way to leverage it for an advantageous sale.

All of these stages in a company’s life are real and valid. It takes different types of management and management skills to cope with the changing problems of the company’s status. Growth and decline are as natural to the company as to the individual. Only you can make that determination. And no role is more important in the final scheme of things, whatever the disposition of the company, than the role of the Chief Financial Officer.

Whatever the status, once the new CFO is hired, it is important to have a comprehensive orientation program for the man or woman to be clearly informed as to the history as well operational details of the company. This is often overlooked as so much fluff. It is not. Moreover, as knowledgeable as the new CFO is in electronic and information technology, nothing should be assumed.

A thorough training program in the company’s information systems should be apportioned over an extended period of time. The Japanese would place the new CFO in the bosom of operations for him or her to see how finance relates to operations from the ground level, up. This is also a good way for the new CFO to gain a keen perception of operational problems relative to finance while developing a common ground between finance and operations.

It is this front-end emphasis that cements dedication, develops loyalty, and assures retention of good people, as no one is more important than the CFO.

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