“When it comes to
hiring,” one CFO recently said, “I have to
admit that I feel more lucky than good” any
time a new finance staffer works out well. “If
there are any best practices in this area,” he
adds, “I sure don’t know about them.”

Many finance chiefs can relate. Hiring is
a black art even in the best of times, defying
analytical rigor and instead relying on certain
soft skills and instincts that few people feel
confident about. Add to that the current
intense demand for finance talent, which can
make any candidate seem like a good choice,
and the stage is set for poor decisions that
may haunt the company (not to mention the
boss) for years.

There are, in fact, a number of purported
“best practices” in hiring, put forward by
human-resource experts, consultants, technology
companies, testing firms, and others.
These approaches typically combine quasi-scientific
interviewing techniques, personality tests,
and background checks. They seem more intent on
repelling frauds and felons than on meeting a CFO’s
true need: deciding who among two to four well-qualified
finalists (usually winnowed down by a
recruiter or a company’s HR department) is the best
person for key direct-reporting slots in treasury,
audit, or related posts.

Even experts admit that, ultimately, any offer of
employment depends on instinct, but there are a
number of useful steps you can take to augment your
gut reactions to job candidates — and to avoid acting
on your worst instincts.

Beware the Rush Job

“The biggest mistake I see any hiring manager make,”
says Johnny C. Taylor Jr., senior vice president for HR
at IAC/InterActiveCorp, “is to go into the process ill-prepared.
You’ll probably spend more time with key
reports than with your spouse, and to some extent you
have to take hiring as seriously as you take courting.”

First, Taylor advises, write down
exactly what you’re looking for so that you
can steer the recruiter in the best direction. Toni Smit, vice president of human
resources and administration at Harvard
Business School Publishing, says that
some hiring managers develop a matrix
that includes technical and soft skills and
fill in the grid with, say, a 1-to-10 scoring
system. “This can also help you develop
the list of questions you’ll ask in the interview,”
says Smit. “If you decide that diplomacy
is a skill that matters, ask the candidate
for an example of how he or she handled
a delicate situation without ruffling
too many feathers.”

Taylor recommends “situational interviewing,”
in which you ask open-ended
questions that give you a window into
how candidates have handled a variety of
real-life situations. “By the time you see
the finalists,” he says, “you can be fairly
sure they possess the technical skills.
What you want to focus on is fit within
the company’s culture, because when
someone fails it’s almost always because
they don’t fit in well.”

Fitness Test

Questions such as “Give me an example
of how you responded when a tight deadline
threatened the quality of a project,” or
“How have you handled situations in
which your ideas on how to proceed
haven’t met with much enthusiasm?” can
take candidates off-script and help you
learn about both their working styles and
their fundamental personalities.

Sam Goldfinger, CFO of The Smith &
Wollensky Restaurant Group, says he
“tries to ask questions that show me what
motivates a candidate.” If compensation
crops up as a topic too early, he says, “I
know right away that that person won’t
be a good fit.” On the other hand, “if we
end the interview talking about sports or
hobbies or some other nonwork topic,
that’s an indication that the person will fit
in well.”

But beware of getting too chummy
too soon, warns Alexander “Sandy”
Salmela of executive-recruitment firm
AKS Associates, in Hingham, Massachusetts.
“There is a certain ‘falling in love’
syndrome that I see often,” he says. “You
are impressed by someone’s strengths, or
the chemistry you feel, or you are overcompensating
for something the previous
job-holder lacked and that you now
place too great an importance on.” All
those factors can cause a boss to respond
too positively and thus miss the chance
to dig deeper and see what really makes
the person tick.

Salmela says one way to avoid that trap
is to do two-on-one interviews, where
you and a colleague spend time with a
candidate. You can cover more ground
and, as he notes, “play off each other to
see how a candidate fares when fielding
questions from two directions.”

Salmela agrees that the key criteria for
a finalist is organizational fit. That can be
particularly tricky for finance, which may
have a more-conservative culture than the
company as a whole. “In those cases,” he
says, “it can be very helpful if a candidate
has experienced that dynamic before — it’s
very common in high-tech, for example —
or has otherwise shown adaptability to
new situations.” Someone who has spent
most of his or her career at just one company,
he says, may find it difficult to adapt
to a new culture.

Smit strongly encourages CFOs not to
go it alone. In addition to spending time
at the front of the process with HR or
recruiters, she says that assembling an
interview team whose members spend
one-on-one time with the candidate is
essential. “One major benefit,” she says, “is
that it can help you avoid a common mistake:
favoring the person who fits the current
mold so well that you miss a chance
to add balance and new perspective to
your organization. ‘Fit’ can mean many
things, and you need to be open to the
possibility that certain differences can be
healthy.”

Taylor advises not taking the hire too
personally. “Certainly you need to click
with the person,” he says, “but what
counts more is how that person fits with
the organization, not just you.”

Scott Leibs is a senior editor at CFO. Additional reporting was provided by CFO reporter Laura DeMars.

CFOs on the Move

BearingPoint CEO Harry You may be shedding his interim CFO title. But his successor, Judy Ethell, will still have to juggle dual posts since she is retaining her title of chief accounting officer at the consulting firm…. Louise Mawhinney, former CFO of ArQule, will stay in biotech as CFO of Helicos Biosciences, a biomedical research and health-care provider…. Tom Summer will give his final toast at Constellation Brands in May, when he plans to retire from the world’s largest wine company…. Thomas Mitchell will stick to the oil-and-gas industry as he makes the transition from Apache Corp. to Noble Corp. He succeeds Mark Jackson, who was named COO…. Saks CFO Douglas Coltharp will resign next year rather than move to New York from Birmingham, Ala., as the company consolidates its executive functions. Michael Archbold, CFO and chief administrative officer, will take his place…. Frank Sklarsky, former CFO of Conagra Foods, will be taking Eastman Kodak through the final stages of its restructuring. Andre Hawaux will replace him at the packaged-food supplier…. The premier CFO of MyShape, a new online women’s retailer, will be Joe Deckop, former COO of Wet Seal…. Gregory Andrews is the new CFO of shopping-center developer Equity One. He replaces Howard Sipzner, who is stepping down.