The CFO you replace is rarely the CFO you need
Six months before its founding CFO was due to retire, a renewable energy infrastructure business engaged us to identify a successor. It was enough time not just to run a search, but to ask a more important question first: does the next CFO need to look like the last one?
The obvious route would have been to find someone with a similar profile. The outgoing CFO had been with the business from its early stages and had played a significant part in financing its growth. A candidate with a comparable background was a natural place to start.
But having time meant the board did not have to start there. Our first conversations were less about replacing the outgoing CFO like for like and more about understanding the existing finance team, the strengths already in the business and where the gaps actually were.
Much of the underlying financing was already in place. The Executive Chairman had a strong investment banking background, and the COO gave the leadership team considerable technical capability. Hiring another financing specialist would have added to strengths the business already had.
What it needed was a CFO closer to the assets, someone who could link operations, finance and the board, and test whether what was happening on the ground was coming through in the numbers. If more corporate finance capability was needed later, it could be hired beneath the CFO.
That gave us a much clearer profile to take to market, one based on what the business needed for its next stage rather than what had worked in the past.
Rather than focusing on candidates with heavily transaction-led backgrounds, we concentrated on CFOs and finance leaders who had spent time close to operational assets and complex infrastructure businesses. The successful appointee brought that blend of operational and financial leadership, giving the board greater confidence that finance remained closely connected to what was happening on the ground as the business entered its next phase of growth.
Not every company gets this time. After an unexpected resignation, the priority is keeping the finance function running, and that calls for a different approach.
But where a senior change is known in advance, there is little benefit in waiting until the vacancy becomes urgent. The extra time helps the search, but more importantly it gives the board room to challenge an assumption that creeps easily into succession planning.
If someone has been a CFO for ten years, the business they joined is unlikely to be the same business today. It has grown and changed, and the demands on its finance function have changed with it.
Why assume their replacement should look the same?
