VideoA recent report from recruiting firm Crist Kolder Associates shows turnover in the top finance job has dropped 7% in the past year at large companies, from 20% in 2008 to 13% in 2009. Other executive recruiters have observed the same phenomenon. "There is probably slightly less opportunity right now because with the force of this recession and the shock factor, there have been a lot of CFOs who have decided to just hunker down," says John Wilson, president of recruiting firm J.C. Wilson Associates.
As the economy has begun to stabilize in recent months, however, the market for finance talent has showed signs of thawing. "We're going to see more voluntary turnover where CFOs are going to say, 'I helped my company get through this, and now I'd like to move on to my longer-term objectives,' which might be moving to a bigger company, moving to a CEO role, or maybe deciding it's time to retire," says Walter Williams, a partner at executive search firm Battalia Winston International. Wilson says some finance chiefs will likely look for operating roles as well.
Trust and Credibility
Those finance executives who will be best positioned to make the leap to a larger company or a new title (about a quarter of CFOs say they ultimately aspire to a CEO position) are those who have demonstrated their ability to be flexible and supportive of the business over the past year. "It's probably too easy to be the traffic cop and just say no to every opportunity or proposal," says Tanner. "It's important to provide people with alternatives and not just deny them."
At many companies, finance chiefs have simply cut costs across the board. But CFOs who tried to help their business-unit leaders find the resources they needed have likely earned a lot of goodwill, says Jim Toohey, CFO at Direct Group, a direct-marketing firm. "When you say to someone, 'I understand your need. Why don't we try an operating lease for three months instead of making a purchase?' I think you increase your credibility and earn people's trust," he says.
Toohey also stresses the value of the lead-by-doing approach. For example, he notes that many vendors are more than willing to negotiate. "You can cut some deals you wouldn't have thought possible a year ago just by picking up the phone."
Finance executives who have proven that they can develop a strong finance team will also have a leg up in the job market, because there are simply too many demands on today's finance department for one person to meet them all successfully. A robust supporting cast — starring technical experts in the controller and treasurer roles — enables the CFO to spend less time supervising routine tasks and more time working outside the finance silo with the rest of the business on new initiatives, a critical move in order to raise his or her profile with the CEO, board, and business-unit heads. To build such a support system, however, "you have to understand how to line people up so you can have the most successful team, and that means you have to know your people," says Mulligan.
"CFOs aren't known for being the most approachable or outgoing people," says Mulligan. "But you have to really get to know your people and be open to their input." Mulligan says he honed this skill at several international positions at PepsiCo. "Every new job I had was in a new physical location, so each time I had to form a new team," he says.
He now spends time regularly not only with direct reports but with staffers throughout the company's finance organization. "I try to be very approachable and communicative, and I think that has allowed me to see what finance needs to do to help the company and to set our priorities," he says.
The savviest CFOs also reach beyond the bounds of finance to address the concerns of operating managers, showing both employees and the boss that they can look beyond the numbers and think strategically about preserving the business's future. "I would guess that some CEOs are probably looking at their CFOs today and saying, 'This person helped me save the company,'" says Leahy.
The Next Step
With the worst of the crisis past at many companies, finance executives face yet another transition. After spending months scaling back, many say it's time to think about investing for the future. "The recovery has as much or more potential than the recession did for a CFO to really show his abilities," says Toohey. "It is a delicate balancing act right now."
Direct Group's business has picked up in recent weeks and the company, which significantly reduced its workforce last year, now needs to add some employees. "Knowing how and when to gradually staff back up is very tricky," Toohey says. "You can't be too aggressive, but you don't want to miss the opportunities." Managing working capital as production ramps up but cash continues to lag also poses a challenge.
Don Civgin, finance chief at Allstate, the $30 billion insurance company, says CFOs may struggle to strike the right balance between caution and action for the next few years. "How do you go from hoarding cash to putting the cash to use to create value?" he asks. "It's important for the CFO to help drive that transition and figure out which are the right risks to get behind." While finance executives were right to concentrate on liquidity over the past year, Civgin says, "you have to help people put their concerns about the economy into perspective and get the company back to business."
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