What is an interim CFO, and could this be the right career path for you? With so many changes companies experience as they grow, many choose to build a team with interim, fractional or contract-to-hire resources--and the C-Suite is no different.
On this week’s episode of CFO Weekly, we sit down with Kristen McAlister who is the Co-Owner and President of Cerius Interim Executive Services. Her firm specializes in contract, and contract-to-hire services for Directors, VPs, and C-suite finance positions.
But if you had told her years ago that she would run such a firm, in her words, she would've had a lot of questions. Now, after several years in the field and a few authored books later, she is an expert in the executive search space and brings us all her knowledge on either hiring an executive or perhaps, becoming an interim CFO yourself. Let's start with the basics.
What is an Interim CFO?
A lot of people may not be familiar with the concept of an interim CFO or a fractional CFO. Think of an interim CFO as a temporary role. It’s a role where you’re stepping in for short periods of time (usually three to six months to help a company get their financials on track) and then you’re off to look for your next role.
Whereas, a fractional CFO is something entirely different. A fractional CFO is a finance professional who may find two to four clients who need work on an ongoing basis (usually, a few days a week or a few times a month) but they need work year-round. They may not have enough work for a full-time CFO, so they’re essentially sharing partial ownership of a CFO with other companies in the same boat.
Why the Need for Interim & Fractional CFOs?
Because there is so much movement lately at the leadership levels, particularly in finance and accounting, there is a constant need for executive-level professionals. Any time a major change happens within an organization, talent change is going to happen, too. It’s inevitable.
And because most companies don’t seem to understand that finance is the hub and spoke of anything and everything that happens in a company, CFOs and finance professionals get caught up in that change far too often.
“Finance is the hub and spoke of anything and everything that happens in a company," McAlister said.
The reason you tend to see gaps or short tenure on the CFO role or finance professional’s resumes is that more often than not when a company gets sold or acquired, the finance executives are the first to get shipped off elsewhere, which shows a grave misunderstanding as to the point of their roles in the first place.
Benefits of the Interim CFO Model
There are benefits for both the employer and the employee for this model. For the employer, it costs a lot of money to hire an employee, particularly an executive like a CFO. It costs even more money to make the wrong hire and have to do the entire process over again.
The interim or fractional model gives the employer the chance to figure out exactly what they need, while at the same time, bringing in someone who can help them with that work. Like assembling the bus while it’s driving down the highway.
For the employee, the benefits are obvious as well. You’re judged by your resume. You’re judged by the company that you keep. The interim model lets the CFO do a “trial run” of a company, allowing them to look under the hood, kick the tires, and make sure that the role and the company are going to be a good fit.
Think of it like dating: most of us dated before we decided to commit to someone. The same is true with the interim model. You get the chance to “date” a company in a way, before you decide to make a long-term commitment to that company. Doing so can save you heartbreak down the road if things don’t work out.
What Should You Look For?
If you’re looking at becoming an interim CFO, understand that clients will want someone who is forward-looking. Someone who understands their needs and what they want to accomplish. What sets candidates apart is the willingness to buy into the mission and long-term strategic vision of the company.
“One of the great things about being in finance, is your accomplishments are very measured. You know all of the numbers,” McAlister said.
And what if you’re looking to sell yourself for the next opportunity? Talk about your accomplishments. It's hard for us as people to do, but the great thing about being in finance is that your accomplishments tend to be very measured.
It’s all about the numbers, and the impact that you made, and framing that in a way that a company can understand.
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