CFO tenure

CFO Tenure

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There were some looks of incredulity in the audience as I threw out numbers related to CFO tenure during my presentation at the AFP Conference last Tuesday. Here’s another recent article that supports those numbers. Shocking isn’t it? CFOs generally move faster then CIOs and CEOs. Which means, …

Senior finance executives need to embrace the “I’m between searches” mentality and always, always, always be prepared for their next move … before they find themselves kicked to the curb and their marketability negatively impacted.

CFO Turnover

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Why is CFO turnover so high? David McCann’s article in CFO.com addresses the fact that one–quarter of Fortune 1,000 lost (for one reason or another) its senior finance leader in 2007.

These two excerpts point to the facts, but the article in its entirety is a must–read.

“For large-company finance chiefs considering job switches, the good news is that a lot of CFO positions are opening up. The bad news is that those who land one of them might not have it for long.”

“Being a CFO at a very large company is a precarious position indeed. ‘The average tenure of a [Fortune 1,000] CFO right now is less than three years,’ Michele Heid, co-managing partner of the finance practice at Heidrick & Struggles, told CFO.com. ‘Five years ago, it was closer to five years’.”

Knowledge is power. With a “here today, gone tomorrow” culture surrounding senior–level finance executives, the questions is … how are you going to use that knowledge?

You can do nothing of course. But when (and it is more likely when, not if) you find yourself on the curb, your marketability will have taken a big hit.

Or, you can begin to proactively manage your career much like you proactively run your company. Where do you want to be in three years? In five years? What do you need to do and who needs to know about you in order to get there?

Isn’t there an old adage that goes something like … failing to plan is planning to fail?

Movin’ On

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An excerpt from CFO.com’s Editor Letter of September 27 says …

<< The latest CFO/Duke University Business Outlook Survey found CFOs pessimistic about the economy and reigning in spending and hiring. But a Robert Half survey suggests that might not apply to their own departments: finance hires are predicted to rise.>>

In an attempt to find more information on the CFO.com site about this, I stumbled across Julia Homer’s article, “The Three–Year Itch.” It says in part,

<<CFOs (and their bosses) are vacating their offices at an alarming clip. Various surveys estimate the average tenure of a CFO at anywhere from four and a half years to a mere 17 months.>>

This kind of trending, coming directly from CFO.com, should serve as a wake–up call to all senior finance executives. It is not the “good–old days” anymore where company loyalty kept you there for most of your career. In all likelihood you will be moving out of your current position, and it may be sooner than you thought.

The question becomes, will you have to hunt for your next position or will you be found as the ideal candidate? 

Succession Planning

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In a recent survey conducted among 1400 CFOs nationally by Robert Half Management Resources, “most” said they have not identified their successor. The primary reason given was they had no plans to leave their current position. Unfortunately, even the best–laid plans go astray.

Paul McDonald, executive director of Robert Half Management Resources says, "Executives should plan for all contingencies, even if they have every intention of staying in their current role. Change – planned or otherwise – is a fact of life and companies that are prepared are better equipped to maintain productivity during times of transition." 

And I agree. Current statistics indicate that a CFO will leave a position every 18 months to five years, with three years being the average. Planning your next move puts you in the driver’s seat. You can either act, or be acted upon.

Grooming your replacement is good for the company, but it is also a huge feather in your cap. Since 74% of your competition indicates they are not planning to leave and have not made provisions for leaving, succession planning is a huge market differentiator and one that is valuable to your next employer.