what ceo wants.docx

what ceo wants.docx

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whatceowants

WhatCEOsWant

Charactercounts.Sodovision,trustworthiness,experience,andexcellentpersonalchemistrywiththeCEO.Oh,anddidwementionfinancialskills?

JulieCarrickDalton-CFOMagazineJuly1,1999

WhatdoCEOswantintheirCFOs?

Wouldyoubelievefinanceexpertise,leadership--andimpeccableLittleLeaguecredentials?

JamesLavellethinksso.ThechairmanandCEOofCotelligentInc.,a$327millionSanFranciscoITconsultingandoutsourcing-servicesfirm,recentlyspentmorethanayearsearchingforanewfinancechief.Cotelligent'sCFOhadtobe"someonespecial,"saysLavelle."Hehadtohaveoutstandingtechnicalskills.Buthealsoneededthetalentsofadiplomat,whilebeingtoughenoughtoraiseredflags."

Afterinterviewingmorethan20candidates,Lavellethoughthehadfoundacandidatewithjusttherightskills,experience,andtemperament.Tomakesure,though,hecalledafewreferences.Lavellediscoveredthatinhishometown,thecandidatehadearnedaterriblereputationasabaseballcoach.ThatwasallLavelleneededtohear."Ifhe'shatedontheLittleLeaguediamond,thinkabouthisreceptioninthebusinessworld,"heexplains.

WelcometothebravenewworldofCFOsearches.LikeLavelle,anincreasingnumberofCEOsarelookingforsuperstarCFOs--executiveswhoarenotjustfinanciallynimbleandvisionary,butalsoabovereproach.LavellefinallyfoundhismaninHerbMontgomery,theformerCFOoftheconstructionfirmGuyF.AtkinsonCo.,inSanBruno,California.HedescribesMontgomeryashaving"25yearsofseasonedfinancialexperience,"aswellas"thedemeanorandpersonalitythatwascompatiblewithmyteam."Montgomery,headds,"hadatop-flightnameandreputationintheSanFranciscoBayarea"--anassetthatwascriticaltothethennewlypubliccompany.

AsLavelle'sexperienceattests,CEOsaredemandingalotmorethanfinancialacumenintheirCFOs.Thesedays,CEOswantfinancechiefswhocanfillamultitudeofroles:

confidant,champion,communicator,creatorofvalue.

Invariably,theysaytheywantafinancechiefwhocanbringtheircompanytoanotherlevel.Andtheyareloathetosettle."Inaperfectworld,youwantitall,"admitsLavelle."Icanfindafinancialmechanicanywhere.WhatIwantisafinancialambassador."

Tobetterdeveloptheportraitoftoday'smodelfinancechief,CFOmagazinerecentlysurveyed500CEOsabouttheirexpectations.TheCEOssurveyed,drawnfromcompaniesonCFO'sreadershiplist,representawidespectrumofbusinesses,fromsmallnonprofitstolargemultinationals.Despitetheirdifferences,theysharecommoninsightsintowhattheywantinaCFO.Most--75percent--hiredtheircurrentCFO;40percentdidsowithinthepastthreeyears.Awhopping39percentfiredtheirlastCFO.

Theirwishlists,asitturnsout,arelongandall-encompassing.Inadditiontofinanceexpertiseandpersonalintegrity,CEOssaytheywantCFOswithstrategicvision,communicationskills,andabroadbusinessbackgroundthatincludesoperatingexperience.

Mostimportant,thepersonalchemistryhastobejustright."Thisisstillaverypersonalbusiness,"saysBjornF.Lindgren,presidentofBFLAssociatesLtd.,aHouston-basedexecutivesearchfirm."CEOswillalmostalwaysoverlookexperienceandcredentialsforthatstrong,trustingpersonalrelationship."Ultimately,addsHowardKarr,presidentofHowardKarr&AssociatesInc.,aSanMateo,California-basedexecutiverecruiter,"basicpersonalitywillmakeorbreakadeal.Ifyou'reanass,you'reanass."

StrategicPartner（withscars）

WhenCFOmagazinelastaskedCEOswhattheywantedinafinancechief（see"MeasuringUp,"February1994）,theywerejustbeginningtomentionstrategicvision.Today,ithasbecomearoutinerequest."CEOswillalmostalwayssaythatwhattheywantmostinaCFOisastrategicpartner,abusinesspartner,"saysE.PeterMcLean,seniordirectorintheNewYorkofficeofexecutiverecruitersSpencerStuart.Whatthatmeans,saysGaryDiCamillo,CEOofPolaroidCorp.,the$1.8billionimagingcompany,isthataCFOmustbea"navigatorofthebusiness,notjustacustodian."HeorshemusthelptheCEO"anticipatetheicebergs,andsteerclear,"addsDiCamillo,whohiredJudithBoynton,formercontrolleratAmocoCorp.,inApril1998,tobehischiefnavigator.

IntheCFOsurvey,CEOsconsistentlyrankedstrategicvisionasmoreimportantthansuchtraitsasexperiencewithintheindustry,capital-raising,andIPOs."CEOsclearlywantcompetence,judgment,andcounseloverspecificexpertisein,say,IPOs,"saysexecutiverecruiterMcLean,whoreviewedthesurveyresults.Basically,hesays,"they'relookingforoverallcompetence,withtheimplicationthatjudgmentandstylewillmakeupforlackofspecificexperience."

Thebeststrategicpartners,however,haveweatheredsomeadversity."CEOswanttoseeademonstratedtrackrecord,"saysBobGorog,managingdirectorofBoston-basedrecruitersSullivan&Co."Theylookfavorablyatcandidateswholisttwo,three,orfourplacesofemploymentratherthanjustone.Andthemorebattlescars,thebetter."

Forproof,witnesstheparadeofseasonedCFOswhohavetakentopreinsrecently--manyinnewindustries.DebbyHopkins,aformerGeneralMotorsfinanceexecutive,isnowtacklingproblemsataerospacegiantBoeingaftersuccessfulfinancestintsatUnisys,FordMotor,andFirstNationalBankofDetroit（see"FearlessinSeattle,"April）.GeneralMillsrecentlytappedJamesLawrence,theformerCFOofNorthwestAirlinesandPepsiCo,asitsfirstCFOsince1996.Ingersoll-Rand,manufacturerofconstructionandindustrialmachinery,installedDavidDevonshire,theformerOwensCorningCFOandcontrollerofHoneywell,asitsCFOinJanuary1998.AndAllstateInsurancejustturnedtoJohnCarl,aveteranfinanceexecutiveforsuchcompaniesasAmoco,Kraft,andAmericanHospitalSupply,asitsnewfinancechief.

Carl'sdiversebusinessbackgroundandhisabilitytothinkstrategicallyarewhatsoldhimtoEdLiddy,chairman,president,andCEOofAllstate.AtKraft,wherehehadservedascontroller,Carlworkedinathick-marginbusinessinwhichconsumeradvertisingandmarketingwerecrucial.AtAmericanHospitalSupply,whichdistributeshospitalproducts,heexperiencedamoreaggressivecompanywiththinmargins.AndatAmoco,hegainedvaluableinternationalexperienceasheadofthecompany'sacquisitionsanddivestitures.Armedwithsuchcredentials,saysLiddy,Carl'sinexperiencewithinsuranceisinsignificant."WouldIbeecstaticifhehadinsuranceexperience,too?

OfcourseIwould.ButI'mnotworriedabit,"Liddysays.

Noteveryoneagrees,however,thatspecificexperienceisexpendable.MichaelMarquez,CEOofManateeMemorialHospital,aBradenton,Florida-based,512-bedhospitalwith$300millioningrossrevenueslastyear,saysindustryexperienceisamustwhenhiringaCFOinhealthcare."Theyhavetobefamiliarwithreimbursementsandbilling--andthat'sjustthefinancialside.Theyalsohavetounderstandwhatisgoingoninhospitals,"saysMarquez,whoseCFO,JohnPaulChristen--aveteranofValleyHospital,inLasVegas--cametoManateeinlate1995,shortlyafterBaptistHealthSystems,ofPhoenix,soldthehospital.Forexample,hesays,Christen'sabilitytointegratethehospital'stwofinancialsystemsandprepareabudgetimmediatelyuponjoiningwouldhavebeenimpossiblewithoutahealth-carebackground.

WhatTheyReallyWant

Theacidtestforstrategicvision,however,isthewayaCFOtransformsaCEO'svisionintoaction.Whilemost--98percent--ofCEOssurveyedsaidtheirCFOscreatevalue,themechanismstomeasurethatvaluevariedimmensely.Manysaidthatearningspersharewastheprimaryindicator,butotherspointedtosuchmeasuresas"theamountofworkIhavetodo"and"thesynergiesachievedwithdepartmentheads."OneCEOsimplysaidhecalculatedhisfinancechief'svalue"daily."

What'sapparentisthatspeedcounts.PeterJacobi,formerpresidentandchiefoperatingofficerofSanFranciscobasedLeviStrauss&Co.,wantedquickresultswhenhehiredWilliamChiassonasthecompany'sCFOinAugust1998.JacobiwaslookingforastrategicthinkertohelpgetLeviStrauss--whichsaw1998salesshrinkby13percent,tojustunder$6billion--outofarut.Andsincejoiningthecompany,Chiasson,theformerseniorvicepresidentforfinanceatKraftFoodsInc.,haslaunchedasharedservicesgroupintheAmericas,changedcompensationandincentivescales,revampedtheplanningprocess,andreorganizedthefinanceoffice."Heaskedwhywereportthewaywedoandwhyweinvestinwhatwedo,anddevelopedascorecardforhowwedobusiness,"saysJacobi.Inaddition,"Billischallenginglong-heldassumptionsandlookingatthingsfromadifferentperspective.Buthedoesitinawaythatworkswithouruniqueculture,"saysJacobi,addingthatpartofhisrecentdecisiontoretirewasbasedonChiasson'sarrival.

AtToronto-basedCottCorp.,FrankWeiseIIIisbankingonRaymondSilcock's"recordofresults"tohelpfuelaspeedyturnaround.Weise,whotookoverthereinslastsummer,saysheneededafinancechiefwiththe"courageandstamina"tohelpstemasix-year-slide.Silcock,whowashiredinSeptember,wasalsoaknownquantity:

hehadbeenWeise'sCFOwhenthelatterheadedCampbellSoup's$1.7billionbakeryandconfectionerydivisionfrom1995to1997,andwas"instrumental"inaturnaroundthatultimatelytripledrevenues.

AtCott,saysWeise,Silcockhasalreadycreatedvaluebyimplementingstrongfinancialcontrols,helpingtoreengineerthecompany'ssupplychain,andspearheadingitsdivestitureprocess.AndalthoughCottreportedanetlossfromcontinuingoperationsof$29.7