Contracting an interim CFO can be a strategic move for companies facing transitional periods, financial challenges, or specific projects requiring specialized expertise. Interim CFOs are experienced professionals who temporarily fill the CFO role to provide leadership, stabilize finances, and guide the company through change. They bring a wealth of experience and a fresh perspective, helping businesses navigate through difficult times, implement new strategies, or prepare for future growth. To ensure a successful collaboration, several key factors should be considered when engaging an Interim CFO.
1. Clearly Defined Scope and Objectives
It is crucial to clearly define the tasks, goals, and expected outcomes of the Interim CFO's role.
Setting specific performance indicators and milestones helps measure the success of the engagement. Examples include the time of completion of the consolidated financial statements or the time until the rolling forecast is updated at the end of the month or the subtasks until M&A readiness is achieved.
· Practical tip: Experience has shown that the interim CFO can translate the client's ideas into KPIs and milestones in the order initiation phase and in the first two weeks.
2. Experience and Expertise
Assess the interim CFO's experience and expertise in relation to your company's industry, size, and specific needs. Look for a proven track record in similar situations or challenges.
Ensure specific skills needed for the current challenges, such as turnaround management, mergers and acquisitions, or financial restructuring.
The Interim CFO should possess strong analytical skills to quickly identify issues and opportunities. Interim CFOs should be crisis-proof.
3. Cultural Fit and Communication
Evaluate the interim CFO's communication style, interpersonal skills, and ability to adapt to your company's culture.
Effective communication with stakeholders at all levels is essential for the Interim CFO.
A collaborative approach with the executive team, finance department, and other key personnel is important.
4. Strategic Vision and Alignment with Business Goals
The Interim CFO should contribute to the company's long-term strategy despite the temporary nature of the role.
The Interim CFO should have a good understanding of the broader business goals and how the finance function supports them.
Aligning financial strategies with the overall business strategy is essential.
5. Leadership and Change-Management
The Interim CFO should be capable of leading the finance team and managing changes effectively.
Experience in driving and managing change within an organization is crucial, especially in turnaround or transitional situations.
Practical tip: When obtaining references, also ask about team members from finance departments that the interim CFO has already managed.
6. Project Management Skills
The Interim CFO should manage time and resources efficiently to meet deadlines and achieve goals.
Proactively identifying and addressing problems is key.
9. Trust and Integrity
High ethical standards and integrity are a must for the Interim CFO.
Building trust with the executive team, board, and other stakeholders is vital.
· Practical tip: Discuss with the interim CFO candidates how they can jointly exploit the scope for evaluation and what the limits are.
10. Flexibility in Engagement Terms
The engagement terms should be flexible to accommodate changes in the business environment or scope of work.
A clear exit strategy for transitioning responsibilities after the interim period is necessary.
11. References and Track Record
The Interim CFO should have strong references and a successful track record in similar roles.
A good reputation in the industry or among previous clients is beneficial.
12. Cost-Effectiveness
The costs of the Interim CFO should be justified by the value they bring to the organization.
By focusing on these key factors, organizations can maximize the effectiveness and positive impact of contracting an Interim CFO, ensuring they address critical financial challenges and drive the company towards its strategic goals.
One last tip: Speed often counts when filling interim CFO positions. Both the company and the interim manager often made a good impression after the first conversation about whether it was a good fit. Experience has shown that long contract negotiations do not lead to cooperation - not least because the interim CFO - if he is available - often offers his services in several projects. Both sides should also pay attention to how the contract is initiated. Does the contractual partner respond quickly? Is the communication clear and authoritative? Then good luck with your joint projects!
