In today’s economic climate, interim CFOs tasked with a business turnaround must immediately consider whether the company has sufficient resources to withstand a downturn. They must ask, “Can the company 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 interpersonal and communication skills, gravitas and team leadership capabilities, an Interim CFO is unlikely to succeed, no matter how strong their technical background might be. The need for an interim CFO to demonstrate these qualities is paramount, especially when he or she is dropped into a crisis situation requiring a fast turnaround.
Interim CFO executives should have a track record of at least five to ten years or near board-level experience. They also need to have held senior management-level positions and/or have been head of the accounting or finance function for companies of similar or larger size.
When hiring an interim CFO, look for the following professional attributes to ensure success:
- Turnaround experience
- De-risking and debt pay down
- Banking relationships and managing covenants
- Cash management
- Ability to fixing poor internal controls
- Foundation building for growth or market downturn
- Restructurings, downsizing and cost management expertise
- Merger & acquisition integration
- Board conflict and acceptance
- Sale and liquidy preparation
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)
- 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.)
- Sticks their neck out and say it how it is, using fine judgment
- Is not concerned with personal status and can take that necessary step down in responsibility level easily and willingly
- Operates at different levels and demonstrates flexibility, which is essential in a change situation where the goal posts can move from the day one steps into the assignment
- Adapts quickly to different cultures, sectors and organizations
- Establishes immediate credibility, which is particularly important as the sponsoring client may have made a brave move in introducing the first interim executive into the organization
- Takes the team with them very quickly, establishes themselves with their peer group and generally sells the concept of why they are there on arrival
- Possesses exceptional interpersonal skills and positive attitude, and their “over-qualification,” combined with a touch of humility, ensures quick integration
- Is a 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 or her experience will go a very long way to re-start your company and lower the anxiety level of your lenders & investors.