Successfully Navigating a CFO Transition
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Panic. That’s the sound often heard in the voice of a nonprofit CEO when their Chief Financial Officer leaves, no matter the circumstances. Timing is rarely perfect. Recruiting the right financial management partner is critical. Make a mistake and the negative consequences will quickly spread throughout your organization and beyond, damaging credibility, relationships and, in worst-case scenarios, your ability to retain key staff and obtain or maintain funding. Ben Franklin had it right when he said, “If you fail to plan, you plan to fail.” Thinking through all aspects of a CFO transition before you begin your recruiting efforts will improve the likelihood of a successful outcome.
Transcript of Successfully Navigating a CFO Transition
Sponsored by:
Successfully Navigating a CFO Transition
Pam Williams & Marci Moore
August 21, 2013
Twitter Hashtag - #npweb Part
Of:
Sponsored by:
Advising nonprofits in:
• Strategy
• Planning
• Organizational Development
www.synthesispartnership.com
(617) 969-1881
INTEGRATED PLANNING
Part
Of:
Sponsored by: Part
Of:
Coming Soon
Sponsored by:
Today’s Speakers
Pam Williams and Marci Moore Principals
Nonprofit Finance Pros
Assisting with chat questions: Jamie Maloney, 4Good
Founding Director of Nonprofit Webinars and Host:
Sam Frank, Synthesis Partnership
Part
Of:
WELCOME
BONUS Materials Available Following
Program:
Worksheet: Transition Navigation Plan©
Article: Core Considerations When Recruiting
a CFO
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Successfully Navigating a CFO
Transition
Cash Flow Needs
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Billing & Grants Management
Deadlines
Pending Financial Projects
Financial Management & Reporting
Interim Options
Evaluating Candidates
TAKEAWAYS: The first actions you should take in the event of a CFO
resignation or termination How to plan effectively for your CFO transition How to determine the skills, traits and experience your
next CFO needs in order to be successful How to objectively assess your CFO candidates’ skills and
cultural fit
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POLL QUESTION 1: How many people on the call are in the midst of a CFO
transition right now? How many people have been notified that their CFO is
resigning? How many people are considering making a CFO change?
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POLL QUESTION 2:
In your opinion, what is the first thing a CEO or Executive Director should do when a CFO resigns or is terminated?
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Restrict Identify Notify
Immediate Actions:
As soon as you know about your CFO transition, begin taking action. The nature of your transition (planned vs. unplanned, voluntary vs. involuntary) will drive timing and urgency.
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Notify bank(s) of the change Eliminate ability to transfer funds
or sign checks Change passwords Cancel credit cards/access to
credit accounts
Immediate Action: RESTRICT ACCESS
POLL: How many people have a list of user ids and passwords for all financial accounts (not just banking)
or know where that list can be found?
Major projects and short-term deadlines
Interim financial management solutions
Legal assistance necessary?
Notification list – who needs to know what?
Immediate Action: IDENTIFY
Immediate Action: NOTIFY
Staff Funders Board Members Other Key Business Partners:
CPA Firm Insurance Broker Vendors
Share as much information as you can, including your transition plans. Manage the message.
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If you fail to
plan, you plan
to fail. Benjamin Franklin
Search Planning
Resource: Transition Navigation Plan Worksheet
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Search Planning
Who will take the
lead on your
search, and who
will be on the
hiring team?
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Search Planning
Who is your
ideal
candidate?
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Search Planning
What is the availability of
your current CFO during
the transition?
Is your current CFO
willing to assist with the
onboarding process for
the new CFO?
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Search Planning
Who will stay on
top of day-to-day
financial
management
needs?
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Search Planning
If necessary, what
outside resources
(search firm, interim
CFO, etc.) are
available to you?
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Search Planning
Where will you look for
candidates? • Personal Connections & Referrals
• Your website
• Targeted job boards • www.execsearches.com
• www.idealist.org
• www.nonprofitjobs.com
• www.opportunityknocks.com
• Online Social Networks • Ex: LinkedIn Nonprofit Controller’s
Network Group
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Search Planning
How does the
current salary for the
position align with
the market?
Are adjustments
necessary?
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Search Planning
How will you “sell”
prospective
candidates on
coming to work for
your organization?
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Search Planning
What will you do
you to help your
new CFO get up
to speed
quickly?
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You Need A CFO Superhero
You Need a CFO With: Depth of Experience & Knowledge Ability to Translate Numbers into Meaningful Financial Story for Different Audiences Ability to Focus on Today’s Needs AND Long-Term Sustainability Relationship Savvy Bandwidth and Competence to Manage Rapid Change and Competing Priorities
Determine Skills, Traits and Experience
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What skills and
traits are
necessary for a
candidate to
perform well in
YOUR
organization?
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Consider:
Culture
Challenges
Complexity
REAL LIFE EXAMPLE #1 • Human Services Nonprofit • Long-term CEO considering
retirement (not publicly) • 95% Funded by Cost
Reimbursement Grants • No Reserves • Funding Uncertainty • One-Person Department • Occasional Delays in Grant
Payments Require Careful Cash Management & Planning
• Small Town
TRAITS & SKILLS • Copes well with change • Attention to detail • Proactive with funders • Ability to easily move between
mundane and more complex work
• Demonstrated cash/vendor management
• Ability to deal with significant stress
• Understands the realities of living in a small town environment
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REAL LIFE EXAMPLE #2 • Human Services nonprofit • CFO left with 2 weeks notice at the end of
the fiscal year • CEO left during the search after board
investigation • Widespread media coverage of issues • Funders nervous because of sudden CFO
departure and CEO issues that became public
• $30M budget • 40+ funding sources • Loss of over $2M prior year • Large # of Staff Reporting to CFO • Statewide organization
TRAITS & SKILLS • Comfortable with uncertainty & initially
chaotic environment • Ability to synthesize a large amount of
complex information quickly • Demonstrated cash/vendor management • Ability to develop rapport and reassure
funders • Ability to partner with board and interim CEO
to “right the ship” and restore integrity • Understanding that the job will take a
significant number of time for the first 18 months and that it will also entail travel throughout a large state on a regular basis
• Proactive with funders • Ability to manage large number of staff and
functions (HR, IT, Maintenance, Billing, Accounting)
• Ability to deal with significant stress
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The right screening tools help you
make better decisions and ensure that
what-you-see is what-you-get
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Objectively Assess
Candidates’ Skills and Fit
Ask Verify
Validate
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Ask Well-designed behavioral interview questions allow you to see how the candidate would respond to real-world situations they might encounter on the job.
Example:
Because of a payment delay with one of your major funders, there will not be enough money in the bank to make vendor payments for three weeks, although many have due dates before then. What is your course of action?
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Ask TIP: When possible, interview in teams. You are less likely to overlook red flags when you are super-impressed with one skill, quality or story.
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Validate Give candidates a relevant timed assignment that demonstrates their ability to do the job: • Written analysis • Presentation to the interview
team
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Verify Use skillful reference
checks to validate
what you’ve learned
from the candidate
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Verify 3 Keys to Reference-Check
Success: 1. Ask Well-Designed Questions 2. Listen Actively 3. Ask for References with Different
Relationships to the Candidate (boss, peers, employees, CPA firm, etc.)
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Verify SAMPLE QUESTION:
Based on your experience
with this candidate, what will
allow her to be successful in
this position? Describe the position before asking this question.
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Verify SAMPLE QUESTION:
Is there anything about this
candidate’s ability to perform
this job, that I haven’t asked,
that you would like me to
know?
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Verify Conduct a thorough
background screening
based on your own HR
guidelines and state/funder
requirements
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Verify Consider using a behavioral
assessment:
• Final test for job fit
• Identifies strengths,
opportunities for growth
• Offers tips for supervising &
coaching Resource: www.omniagroup.net
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Your Partner in CFO Search & Financial Transitions 727-393-2341
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