Hiring the right CFO is crucial for organizational success, particularly as the finance function is increasingly relied on for strategic counsel. Knowing what companies want in a CFO can help young professionals develop their careers so they’re ready for the job. I recently spoke with Peter Crist, Chairman of executive recruiting firm Crist | Kolder Associates, about the top skills businesses look for in CFOs and how companies should properly groom talent for the position.
This interview has been edited and condensed.
Jeff Thomson: You’ve been in the executive recruiting business for more than 35 years. What skills and experiences do businesses most commonly look for in a CFO?
Peter Crist: Leadership and strategy are at the top of the list of criteria when hunting for a CFO; without leadership and strategy, nothing else matters. The CFO role today is the “number two” executive position behind the CEO, and only strong, strategic leaders succeed in the position. The CFO has a unique and valuable vantage point, as he or she can see the entire enterprise; no other executive besides the CEO has that line of sight.
In terms of technical skills, breadth is critical. The most sought after skill set is operational finance, including FP&A (financial planning and analysis), budgeting and forecasting. The ability to see the business through the numbers and partner with a general manager to drive a P&L (profit and loss statement) is crucial.
Depending on where a company is in its life cycle, we might be asked to focus on treasury, balance and financing skills, or control, accounting and cost cutting skills. For publicly traded companies, experience with Wall Street is highly valuable.
JT: When recruiting for the CFO position, what are the three most important questions you ask prospective candidates?
PC: The three most important questions I ask are:
- Why are you willing to spend time with a headhunter to discuss doing something else?
- What is it about my client that makes them interesting to you?
- If the conversation were to get serious and I looked for references on you, what would I hear?
JT: Ruth Porat recently left Morgan Stanley and will become CFO of Google in May. In your experience, how common is it for CFOs to jump across industries?
PC: At our firm, we believe finance is a fungible skill set and we often see CFOs switching industries. Take Jeff Campbell, who went from McKesson to American Express, or Don Civgin, who went from OfficeMax to Allstate. It happens all the time. Companies are often after a certain skill set rather than specific industry experience.
JT: How should companies think about succession planning for the finance role specifically? Are there any companies you think are getting this right?
PC: Companies must have a plan in place to allow the best and brightest finance talent to have a variety of experiences. Talent should be moved from control and accounting roles, to division CFO positions, to audit, to treasury, to IR, etc. If possible, allowing a high potential finance executive a chance to run a business unit is also excellent training for the CFO chair. Companies such as Honeywell and GE do outstanding jobs grooming finance talent.
JT: According to Crist | Kolder Associates’ 2014 Volatility Report, the Big Ten Conference produces the greatest number of CFOs. Why is this? What are they doing to prepare students for future financial leadership roles that other schools aren’t?
PC: This question is a difficult one to answer, but clearly the value of a Big Ten degree is high in terms of producing future CFOs. Now, to be certain, the accounting and finance programs at schools such as Illinois, Indiana, Wisconsin and Michigan score very high in annual rankings, and, in our mind, the proof is in the pudding in terms of how many CFOs had their starts in these schools. We believe the rigor, sophistication and competition inherent in the Big Ten programs help form the necessary foundation for a future CFO.
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