During his tenure at Ernst & Young, former partner Chuck Eldridge served as the US firm’s first National Director of Recruiting and University Relations. It was a side of the business, he discovered, that he absolutely loved. After holding that position for more than five years, he then rotated into other roles, including a two-year stint in Moscow. Shortly after returning to the US in 1996, the former recruiter found himself being recruited by an executive search firm. Seeing an opportunity to pursue his “true passion,” Eldridge left Ernst & Young to enter the recruiting world full time.
In the mid-1990s, General Electric CEO Jack Welch told Inc. magazine what fate has in store for companies that don’t adapt: “When the rate of change outside exceeds the rate of change inside, the end is in sight.”
Welch’s words feel even more applicable today — particularly if you’re sitting in the chief financial officer’s chair. The ability to deal with ambiguity and change — far more so than deep technical expertise — is now the most sought-after quality for a CFO.
Indeed, the demand for top-flight financial officers appears poised to rise across all industries. The global financial crisis created a temporary surplus of finance executive talent in recent years, but the uptick in CEO turnover suggests job openings are coming. Most new CEOs either bring in a new CFO or start looking for one shortly after they settle in. Finance executives who hope to leverage this opportunity in a tough job market must understand what CEOs are seeking today.
One common CFO search requirement is somewhat restrictive, particularly for current Big Four audit partners and senior managers: companies often want to have a sitting CFO as their next CFO. This reflects a “ripple effect” of regulation. Prior to the Sarbanes-Oxley Act of 2002 (SOX), corporations would frequently offer the CFO position to their audit partner, who typically had established relationships with the CEO and the board, and who knew the lay of the land. If the audit partner had an MBA, even better. SOX quickly renewed the perceived value of a CPA qualification and technical accounting skills. But then the financial crisis hit, and the pendulum swung back toward an emphasis on the CFO as a CEO’s strategic partner, one who expertly manages cash and helps drive business growth.
These hiring conditions mean that finance professionals seeking a CFO job or other senior position must strengthen their candidacy in a number of ways:
- Understand leadership requirements. Although functional expertise (e.g., corporate finance, treasury, controllership) is a requirement, it gets a CFO candidate only so far. Leadership qualities are much more important. They commonly appear on CFO search specification sheets phrased this way: “clever problem solver,” “thinks strategically,” “changes behaviors easily,” “performs well under all conditions,” “low tolerance for marginal talent” and “deals with complexity and ambiguity very well.”
- Embrace forward-looking analytics. Financial planning and analysis (FP&A) expertise represents, by far, the most sought-after functional skill set within the finance function today. CFOs remain hungry for FP&A talent who can help them look ahead with greater clarity and accuracy.
- Network aggressively. References and recommendations matter more than ever. In the post-SOX era, CEOs and board members focus first and foremost on balancing risk and business growth, and they want to feel confident about any new CFO. The best candidates continually strengthen their networks, even when they don’t “need” to.
- Go global. Scan the résumé of most Fortune 500 CFOs and you will see that many made geographic moves — including stops in EU countries, South America, the Middle East and Asia-Pacific — every two to three years. Experience abroad is a necessity for today’s CFO.
- Stay on the job longer, especially early on. Current auditors should recognize that experience as a senior manager in a Big Four firm resonates with hiring teams in the same way that an MBA does. Auditors who leave their firms before becoming senior managers or partners generate far less career return on investment from their public accounting experience.
Of course, understanding the demands of leadership is only a first step. Demonstrating these qualities matters more — particularly in fast-changing and uncertain times. But one thing remains constant in CFO searches: leadership pays handsomely.
More about Chuck Eldridge
Today, with almost 14 years of executive placement experience under his belt, Eldridge serves as Senior Client Partner with Korn/Ferry International, the world’s largest executive search firm. Based in Atlanta, Eldridge works in Korn/Ferry’s Financial Officers Center of Expertise, which he formalized in 2002, and where he helps place finance executives for many of the largest and most prominent companies throughout the world. Eldridge also serves on the University of Florida Business School Advisory Council.
While based in Russia with Ernst & Young, he served as the engagement partner for a global roster of clients, including The Coca-Cola Company, McDonald’s and American Express.