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
info@synthesispartnership.com
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
www.nonprofitfinancepros.com
Successfully Navigating a CFO
Transition

Cash Flow Needs
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

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?

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?

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.

 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.

If you fail to
plan, you plan
to fail.
Benjamin Franklin
Search Planning
Resource: Transition Navigation Plan Worksheet

Search Planning
Who will take the
lead on your
search, and who
will be on the
hiring team?

Search Planning
Who is your
ideal
candidate?

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?

Search Planning
Who will stay on
top of day-to-day
financial
management
needs?

Search Planning
If necessary, what
outside resources
(search firm, interim
CFO, etc.) are
available to you?

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

Search Planning
 How does the
current salary for the
position align with
the market?
 Are adjustments
necessary?

Search Planning
How will you “sell”
prospective
candidates on
coming to work for
your organization?

Search Planning
What will you do
you to help your
new CFO get up
to speed
quickly?

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

What skills and
traits are
necessary for a
candidate to
perform well in
YOUR
organization?

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

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

The right screening tools help you
make better decisions and ensure that
what-you-see is what-you-get
Objectively Assess
Candidates’ Skills and Fit
Ask
Verify
Validate

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?

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.

Validate
Give candidates a relevant timed
assignment that demonstrates
their ability to do the job:
• Written analysis
• Presentation to the interview
team

Verify
Use skillful reference
checks to validate
what you’ve learned
from the candidate

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.)

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.

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?

Verify
Conduct a thorough
background screening
based on your own HR
guidelines and state/funder
requirements

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

Your Partner in CFO Search & Financial Transitions
727-393-2341

Successfully Navigating a CFO Transition

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