CFO Contingency Plan

Or, Redundancy-Proofing. Or, Career Survival Plan. Whatever the name, the result is the same … ensuring that in these tough, very competitive times you don’t find yourself on the street before you start looking for your next position.

As the lead Finance Executive, you would never run your company on the haphazard basis most people, not just Chief Financial Officers, run their careers. With your company, you have systems and measurements in place, a 3-to-5-year plan, and shorter goals you work towards on a daily or weekly basis.

It’s like steering the Titanic. Slow and steady makes the turn. But if you’re inches from the iceberg (unemployment), it is impossible to do the things you need to do in order to avert disaster.

There is little corporate loyalty today. As the CFO or Senior Finance Executive, the bottom line on the P&L statement stops with you. The moment the Board is unhappy, the CEO starts leaning harder, credit / cash issues continue, or the diminished staff is less and less productive and more and more whiney, the bottom line is impacted and it is your neck that has the potential to move closer and closer to the chopping block.

–Do you have any contingency plan in place in the event you do lose your job?

–Have you reached out to anyone in your network in the last year?

–Will your personal marketing documents be ready should someone ask for them?

–Are you visible to your target audience?

–Have you even identified your target audience?

–Do you know and can you articulate your value proposition?

Several months ago I was engaged by a client who worked himself out of his last position. He told me when we started that his goal was to be employed in 2 months, but until his call to me he had done nothing else. He is in a tough industry and now wore the stigma of “unemployment.” Before we could work together, I was forced to disabuse him of that unrealistic expectation. That false expectation served no good purpose for either of us. It’s been 5 months and he has had no less than 6 potential opportunities for at least 4 of those months. However, while no one will tell him definitively “no,” each one of them is continuing to string him along while taking their sweet time getting to “yes.”

The corporate decision to hire is agonizingly slow for many candidates. And that agony is exacerbated if there was no contingency plan in place and the job loss was unexpected. Desperation forces candidates to make choices and decisions they would not otherwise make if they were executing a solid contingency plan. Remember, “he who fails to plan, plans to fail.”

The CFO Market is Moving

I had a long conversation with one of my favorite finance executive recruiters yesterday. Among other things, we compared notes on what’s happening in the CFO market. We agree … after 12-18 months of hunkering down, senior finance executives are now confidently looking around and beginning to move. 

My poll at SmartBrief for CFOs last week confirmed this observation with a whopping 20% of respondents saying they were heading out the door. 

Two possible reasons CFOs are stretching and beginning to flex their muscles …

— CFOs are making the command decision that it’s once again safe to test the waters. And they need to be proactive. Hunkering down is merely survival mode and ensures nothing.

— PEs, VCs, and Boards are looking at their companies and saying,  … thanks Mr. CFO, but now that you have restructured debt and streamlined processes, we need a CFO who will guide our growth strategy and it’s time to change leadership.

Survival mode is giving up control of your career to someone else. Someone who doesn’t have “your” best interests in mind, but rather, has their company’s (investment) best interests at heart. What is good for the company in the short term is not always what is good for the sitting Chief Financial Officer.

If you haven’t clarified your unique value proposition (what do you have that a company is willing to pay to get), created compelling marketing documents, Googled your name to see what others are finding about you, and begun a proactive campaign to raise your visibility and credibility … you might just find yourself left in the dust.

What Employers Want from CFOs

Executive coach Mike Smith did a great job of summarizing comments made by Spencer Stuart’s Karen Quint at a chapter meeting of FEI.

Some very key points from that presentation include this one … “Karen mentioned that the time to get ready for a new role is before the job comes up.” In other words, embrace the “I’m merely between searches mentality.” Have a career survival plan and execute it daily. Despite the fact that CFO tenure is up (partly due to the recession), the fact is that corporate loyalty is tied directly to last quarter’s numbers. 

Additional key points from the article …

–Since 2003, the number of CPA CFOs has risen from 29% to 45%.

There is a lot of chatter among finance executives around the necessity of holding the CPA designation. The reality is, if a company requires it … that is their prerogative. You can’t get around the requirement through a job board or a recruiter, but you “might” be able to get around it through a direct contact with the CEO or a Board member. 

–The national average of an external CFO hire is 40%.

That means a couple of things. First, 60% are internal hires, which is a pretty big number. And it also means that the competition is extremely stiff for the remaining 40%, which is a pretty low number. To compete for those external positions, a candidate must stand out from among all the other CFO candidates vying for those same jobs.

–Today’s Chief Financial Officer is more influential and more visible. He is able to build strong relationships throughout, across, and beyond the company and serves as a strategic business partner.

Bean counting is out … driving strategic vision is in. To accomplish that, CFOs must possess solid interpersonal, communication, and negotiation skills. "CFOs not only want people with people skills working for them, they themselves bring higher value when they bring relational skills sets to the table." (full post)

Quint also wrote an article for Business Week if you’re interested in her thoughts on “Boards and the expanding role of the CFO.”

Out with the Old, In with the New … Maybe

December 31, 2009. The end of a decade. The last two years alone may have seemed like a decade to many who find themselves among the unemployed.

Tomorrow heralds a new decade and the opportunity to do something new and different. If the last few years have taught us anything, it’s this … 

–corporate loyalty is gone;

–you are only as valuable as your latest contribution;

–networking is no longer about who you know but about who knows you; and

–if the Board isn’t happy, the CFO’s neck is on the chopping block.

The beginning of the decade arrived as a seller’s market. If you were walking, talking, and breathing, you were a candidate for almost any position. Companies were that desperate. Seems like just a distant, vague memory doesn’t it?

The end of the decade paints a much different story. Today, companies take their time hiring … willing to wait for the right and best hire, not just any hire. The market is flooded and competition is stiff. Responsibilities are out, value rules. Culture fit is key. Personal branding facilitates a company’s ability to hire the finance leader with the greatest chance of fitting within its corporate environment.

Many finance executives have either been caught completely by surprise or knowingly took a severance package along with some time off to rejuvenate … only to jump back in and hit a big wall of reality. Finding that next position just wasn’t going to be so easy. And despite the wealth of unemployed talent, recruiters and companies still covet the “passive candidate.” 

Gone, probably forever, are the days of yore. Reality says you can either drive your career or you can be driven. Respond or react. Be hunted or be forced to hunt. Seth Godin’s blog post today posed this question …  “Seven years from now, what will you have to show for what you are doing right now?” I’d like to pose my own question from a career management perspective … 

Where do want to be 3-5 years and what do you need to be doing in your career today in order to ensure you get there?

Failing to plan is, by omission, planning to fail.  

Happy New Year … may 2010 be filled with much joy, hope, happiness, and health! 

I Never Saw It Coming

These words from the Lemonade Movement, a video about making lemonade out of the lemons dealt to you when you find yourself  among the ranks of the unemployed, really struck a chord with me … “I never saw it coming.” It's a familiar refrain since few ever do see it (the pink slip) coming until they are escorted to the curb.

If you are wishing and hoping (isn’t that a song?) or trusting and believing that your job is safe and secure, you are choosing to embrace a false sense of security. Every CFO is only as safe as a satisfied board, a congenial CEO, and a healthy bottom line. Do you “really” know whether you have the support of your Board, or is your relationship purely superficial based on board room conversations? Does your vision align with the CEO’s or are you constantly butting heads? Are you playing it too safe or are you being too risky for the shareholders? Is the bottom line healthy “enough”?

Make a career survival plan and then work your plan. You don’t ever have to say “yes” to a move, but wouldn’t it be great to be respond to a great opportunity rather than be forced to react to a pink-slip? Don’t let the words, “I never saw it coming” be prophetic. After all, in the words of Douglas MacArthur, “There is no security on this earth; there is only opportunity.”

CFO Turnover is Down … That’s Good, Right?’s recent interview with Tom Kolder, president of executive search firm, Crist/Kolder Associates, resulted in the article, “No Place Like Home." In it, Kolder talks about what he sees happening within top finance positions.

The title of the article speaks volumes. Quite succinctly, risk-averse finance execs are hunkering down. I’ve blogged about this phenomenon numerous times (see Social Media and Career Management and CFOs are Worried). 

There is absolutely nothing wrong with staying where you are … unless you are blindsided by a move that is forced on you. Here’s the piece of the story you can’t, and shouldn’t, ignore:

And there is still plenty of movement that is totally driven by the other end of the equation, where, rather than the CFO deciding to leave for a better opportunity, the company says, "We're not satisfied, we're making a change, this person's gone."

CFO searches are often confidential. If you believe there is corporate loyalty, the Board and CEO love you, and your job is safe, then perhaps you are not hunkering down … maybe you have your head stuck firmly in the sand. Believing it won't make it true.

You are the only one who is vested in your career. Your career is the thing that provides for your family and funds every other thing in your life. At the risk of repeating myself and boring you to death, you have the most power and are the most valuable while you are gainfully employed. So certainly, stay at home if it makes sense to do so, but be prepared to move! If you do the hard work of crystallizing your value proposition now while you’re still occupying that corner office, you won’t have to play catch-up from the curb.