You’ve Landed a New CFO Job…. Now What?

The first 60 days at a new company can make or break the tenure of an incoming CFO. Here are some tips for tackling the priorities.
Ramona DzinkowskiOctober 10, 2019
You’ve Landed a New CFO Job…. Now What?

When stepping into the CFO chair at a new organization, some say that within the first few weeks you should:

1) Gain a clear picture of the business’s operations first, then meet with other senior executives.
2) Aggressively delegate lower-value-added activities immediately.
3) Spend more time interviewing customers than meeting with the CEO.
4) Stick to meeting with department heads and avoiding gathering intelligence from their subordinates.
5) Immediately ask to take over functions more operational in nature, like corporate development, if the CEO is looking to delegate.

Does all of the above sound wise? Actually, tips 1), 3), and 4) are highly questionable, according to consultants and sitting CFOs. But they do suggest that there’s a lot to think about when planning how to attack the first couple of months at a new company. To be sufficiently prepared, the best CFOs develop a game plan before their first day.

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Why should CFOs be thinking about this now? Many CFO posts at all kinds of companies will be opening up in the next few years. The reason is generational mathematics. A 2016 study by Spencer Stuart found that the average retirement age for a Fortune 500 CFO was a shade over 58. An informal study of the most recent Fortune list by CFO columnist John Touey pegged the current average age of those companies’ CFOs at about 56 (give or take a few months). The population of baby boomer CFOs is rapidly shrinking. And though many baby boomer CFOs will stay in the workforce, few will do so at the CFO level past retirement age.

To fill those vacancies, U.S. companies are increasingly turning to outsiders. An August 2019 study by Crist|Kolder Associates found that 43% of CFO positions at Fortune 500 and S&P 500 companies are occupied by candidates hired from outside the company. That’s 10 percentage points higher than the average the previous 10 years, the recruiting firm says.

Given these dovetailing trends, many finance departments are going to be handed to CFOs coming into an organization cold: they may know the industry, but they won’t have the organizational knowledge accumulated from climbing the ranks. And, unfortunately, a new CFO can’t expect much help during onboarding. According to a 2018 Gartner study, only 9% of companies have formal CFO orientation programs.

Since most finance chiefs will have to go it alone, we’ve compiled six tips that will help a new CFO get off on the right foot.

What do I want from senior executive peers?

More than one-third of CFOs (37%) in Gartner’s 2018 study, “Succeeding As A New CFO,” said building working relationships with the leadership team was one of their most significant challenges as a new CFO. But it is also one of the most crucial first activities.

Building rapport with senior management colleagues is all about establishing credibility by asking the right questions and listening carefully, says Judy Munro, senior managing director at Robert Half Executive Search and an experienced CFO and board member.

“Start off by building your internal capital,” she says. That means asking two key questions to open the lines of communication and earn trust: First, “How can I help you and support your role?” Second, “Is there anything that I need to know about past experiences that we can do differently?” The answers will help a new CFO understand internal customers’ priorities, among other things.

Above all, get to know your colleagues as people, Munro says. “Get them out of the office. If you can take them out to lunch, fantastic, and just let them talk.”

Who are the “doers?”

In a start-up, relationship building can be more difficult, says Marie Myers, CFO of UiPath, a robotic process automation company. “It’s tricky when the org chart is a rapidly moving target, but connecting with the right people quickly is essential,” says Myers.

Instead of merely going through a checklist of department heads, “what you might find is that you have to reach out to people who traditionally may not have been considered part of your circle of influence.”

According to John Reidy, CFO of Diabetes Canada and a former senior finance executive at large multinationals GE Healthcare and NCR, the importance of forging ties within the organization’s informal power structure in the first 60 days can’t be underestimated.

“There are employees that don’t necessarily have grand titles like vice president, but they’re absolutely the people that get things done,” says Reidy. “They’re also the ones who know where the bodies are buried.”

However, says Reidy, proceed with caution: “People often have a reason for telling you things and their motives aren’t always as pure as the driven snow. But at least it gives you one more piece of the puzzle.”

What is the CEO good at?

Expectation setting with the new CEO is, obviously, critical. How it pans out depends on what kind of CEO you are dealing with and why you were hired in the first place. For example, while the CEO often contributes to the CFO hiring process, he or she may not have been the final arbiter and may have to defer to the board of directors in setting expectations and an agenda for the new finance chief. This can add tension to the CEO-CFO relationship.

“If the CEO went out looking for a new CFO then it’s a Batman/Robin situation, which can be rewarding,” Reidy explains. But if the CEO was told by the board to hire a new CFO, setting expectations and developing a rapport could be a lot more difficult.

“Either way, you need to live in the CEO’s pocket for the first two or three months,” Reidy says. “Find out what their operational style is, what they like to do, what they don’t like to do, what their strengths and weaknesses are, where their risk biases are, and what their level of numeracy is. That’s how you begin to set expectations.”

And what happens if the CEO is not the person you expected when you accepted the position? “If it’s really impossible to see eye to eye, you may have to start looking for a job almost immediately,” Reidy says.

Am I getting the true picture?

CFO candidates will inevitably have researched their new employer, but companies can look startlingly different once on the inside. Getting the scoop on how the business is actually performing occupies the new CFO’s time almost immediately.

Obtaining a sense of which key performance indicators are driving the business — “getting under the covers,” as Myers puts it —is essential. “This is the time when you should be taking in as much data, facts, figures, and anecdotal information as you can to help you form an opinion.”

For Myers, data is king. “Quality data is key, so my first point of call is the company’s [enterprise resource planning systems].” However, that information should also be checked against other data sources.

In larger organizations, making a realistic assessment of conditions can require digging. “Everybody’s getting ready for your arrival—you get the ‘dog and pony show,’” says Reidy. “When that’s done, go find the person who put the show together and get them to give you a more open, less nuanced view.”

Will the finance team be my ally?

For a CFO, relationships with key business unit and operational executives are table stakes. Scheduling one-on-ones with them is a must. However, don’t neglect the finance team.

“Talking to your team, in my view, is job one, day one,” Munro says. The finance team is a great source of information, and don’t ever underestimate what they know, she says. Make them your allies very quickly and create an atmosphere of open dialogue. “Everything is important, especially in the first days, so leave your door open,” she counsels.

Most experts recommend assessing the finance team as early as possible, or at least within 30 days, and finding supplemental resources quickly if needed. Several years ago, Munro joined an entrepreneurial manufacturing company that had just gone public: “On day one, I found out that there was that only one other person on my team that had any accounting training for public companies. Our first year-end as a public issuer was 30 days away. How was I going to get my first report out? How could I find someone who knew something about the business or something about the accounting system? There was a very capable audit manager we worked with. I took her off the audit and hired her within the first week.”

Eventually, a new CFO will have to more fully gauge the “bench strength” in finance. Does the team have the skills to execute the mission that the new CFO envisions? “Make your own judgments despite anything you’ve been told about someone,” Munro advises.

What’s the outside-in view?

Spending time with outside stakeholders pays off. “In my first 30 days on the job, I met with many customers and investors,” says UiPath’s Myers. “That was absolutely critical because of the business UiPath is in: It’s very fast-growing, and some of the aspects of the business are changing quarter by quarter.”

From customers, Myers was able to glean a very clear perspective, not only on their own businesses but the RPA segment as a whole. “Then I was able to test some of those assumptions with investors, which was very helpful, and that was important because we were doing a Series D [funding round] within the first 60 days. I really had to grasp the business quickly.”

In particular, Gartner advises maintaining proximity to investors that are strategic. Being close to them gives a new CFO insight into how investors will value management’s choices and what risk-vs.-return trade-offs will be received favorably.

Finally, in addition to investors and customers, experts recommend networking with other industry executives and other CFOs. “When becoming a new CFO in a ladies’ high-end garment manufacturing business, which I knew next to nothing about, I joined Financial Executives International,” says Munro. “I had an instant network of people that could introduce me to the resources I needed, including third-party consultants.”

Says Myers: “As the CFO you need to understand how the company is knitted together and carefully navigate relationships at the same time. That makes the first 60 days pretty intense.”

The good news? Finance chiefs don’t need to transform the organization on day one, or day 60. They do need to get up to speed quickly. But CFOs shouldn’t be afraid to slow down and carefully assess the company, Munro advises. “No one is expecting you to make decisions on anything immediately, no matter what the circumstances, even if the house is burning.”


Ramona Dzinkowski is is a journalist and president of RND Research Group.