Internal vs. External CFO Candidates

There is an ongoing discussion in my Linkedin CFO Careers group over an article written by executive search consultant John Touey about the shrinking CFO candidate pool. While that potentially spells good news for those who are seeking their first CFO position, it is also creating risk for companies who hire external or promote internal – inexperienced – folks to those strategic positions.

Here’s one comment from the group …

I think Touey is right on target with this article. I have had a number of recruiters contact me about open CFO roles in the last year. Each one I have asked why they are not promoting someone from within. Almost every one has said because the internal candidates lacked the breadth of experience that the company desired. Most of the time they were talking about a controller who had been with them 10+ years.

Coincidentally, in doing research for a Proformative webinar I conducted back in 2012, I found stats that indicated the average internal promotion to the CFO seat did not happen for an average of 11 years. Apparently, that has not changed in the last few years.

Good-fitting CFO
Good-fitting CFO

Here’s the conundrum.

With internal candidates you have fit-for-culture but limited experience. With external candidates, you might get transformation, but culture fit could be an issue.

Companies want – and need – both. Proven leadership and a track record of measurable impacts (experience, not necessarily title), along with a clear fit within their established culture.

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