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Interim CFOs: Headed Up, or Out?

A temporary CFO who doesn't land the job permanently raises a ''yellow flag,'' not a red one.
Lisa Yoon, CFO.com | US
October 29, 2004

Is experience as an interim CFO an asset or a liability on your resume? It depends, say finance executives and recruiters.

Consider Jenifer Cua, who was director of treasury at Cryptologic Inc. in May, when she was named interim chief financial officer at the Toronto-based maker of Internet gaming software. She says that the temporary position — which she still holds as of late October — was a no-lose situation because of all she learned and was exposed to on the job. "I've gotten to grow a lot and gain a lot of experience," she says.

Cua is no longer focused solely on the finance department; now she sees the company as a whole. She also has had the opportunity to contribute her strategic ideas, to practice dealing the public by handling investor relations, and to work with the board of directors — all of which will undoubtedly favor her as a CFO candidate in the future.

But believing that she has "a lot more to learn" and that the company would be better off with a more-seasoned finance chief, Cua chose not to be a candidate for the permanent post. "When you get into more-senior roles," she says, "you tend to think of what's best for the company, not just what's best for your own career."

A "Yellow Flag," Not a Red One
As a career-building experience, especially from the viewpoint of prospective future employers, Cua's stint as Cryptologic's interim finance chief is practically ideal. However, some recruiters say that when they're looking through resumes, a temporary CFO who doesn't land the job permanently should raise a "yellow flag." It's not necessarily a bad thing, explains Walt Williams of executive search firm Battaglia Winston International, but a recruiter would want to know more about the specifics of the interim job and the skill sets that were ultimately demanded for the permanent position.

The company might eventually have chosen an external candidate because it was planning an IPO, positioning itself for an acquisition, or embarking on some other major undertaking, but no one from within the company had the necessary expertise. Indeed, provided that "interim" was clearly the intention all along, that could be a positive in itself, says Williams: "Management decided you were good enough to step in."

Maury Austin is less sanguine about interim finance executives who don't make the grade. Austin has "temped" himself; after selling his company Symmetricon to Microsoft, he was recruited by a friend to join ailing Southwall Technologies as interim CFO. Austin — who eventually landed the Southwall position outright — says that the only good reason for not getting the permanent job is that "you turned it down." Any other reason, he adds, should have recruiters looking elsewhere.

That said, Austin says that in his experience, controllers don't always get a fair shake when they accept a role as interim CFO. About half the time when Austin has filled such a position, he adds, "the controllers were CFO material." Yet it's "not uncommon" for them to be passed over for the permanent post because within the company, the controller is regarded as a bean counter and not as a strategic thinker.

Just as bad, says Rick Richardson of executive search firm Spencer Stuart, is a candidate who remains in an interim job for a significant period of time — for years, in some cases he's seen — without attaining permanent status. If an executive has a CFO career in mind, Richardson advises, he or she would do well to learn from the interim experience, do the best job they can, and move on.

If you're named to the position of interim CFO but passed over for the permanent position — despite your best efforts — be sure you find out why, counsels Williams. Speak with the chief executive officer and the other decision makers until you understand how the company's situation, the skills it was looking for, and management's perception of the various candidates helped shape the final decision.

The better you understand why you didn't make the grade, the better you'll be able to answer questions from recruiters and from prospective employers, he adds. The only answer to those questions that's absolutely wrong, says Williams, is "I don't know why I didn't get the job."




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