When you’re facing a challenge in the finance function, an interim CFO can bring the skills, experience and stability the business might be lacking. Get ready to raise your expectations of what these exceptional talents can deliver.
Hiring an interim CFO can be a smart move to support an organization’s financial stability. During times of transition or uncertainty, an interim CFO can provide valuable skills and expertise to steer a company in the right direction. Often overqualified for the role, temporary CFOs can quickly step in to help businesses through challenging periods, steadying the ship until a permanent replacement can be found.
But that's not the full story.
In this article, we'll explore how businesses can make the most of an interim CFO. Rather than thinking of interim CFO services as just a 'safe pair of hands' to keep the ship afloat, we’ll explain how you can extract maximum value from your interim investment. After all, these financial experts are exceptional talents with huge amounts of experience—so why not have the highest possible expectations of what they can deliver? Interim CFOs can certainly handle that level of pressure.
At Korn Ferry, when we work with a client to scope out an interim CFO assignment, we encourage them to think in terms of outcomes —and we want them to aim high. Kirstin Chambers, a Managing Consultant for Executive Interim in EMEA, told us about some of the questions she’s looking to answer. “I’m looking at the big picture—at where we want to be at the end of the assignment,” says Chambers. “So I ask my clients what they want the interim CFO to actually achieve for them. Which skills does the interim need to bring to the table that are currently missing in the finance function? And are there any specific challenges or projects that the interim can take on? When I’m asking these questions, I’m shaping a profile of the kind of interim CFO services that each client needs, and getting a strong understanding of the skills, traits and capabilities that the interim will need to succeed.”
Many leaders don’t necessarily think in terms of skills at this C-suite level, but we’ve found that interim hiring provides a unique opportunity to do so. A business can bring in the high-level skills it needs to achieve the outcomes it’s aiming for within a short timeframe. For example, it could be heading for an IPO and needs someone with prior experience of taking a company public to help guide it through the process. Or it could be working to integrate separate finance functions following a merger and needs a CFO with technical skills who knows what it takes to get different systems working together.
When interim CFO services pay dividends
While every client’s needs are unique, there are some common scenarios when hiring an interim or temporary CFO is the smart move:
A gap for in-demand skills
An organization can quickly bridge a finance skills gap by bringing in best-in-class talent in the form of an interim, someone with valuable skills the organization is currently lacking. For example, if a company is facing a new challenge or a complex situation, such as an IPO or a merger, its incumbent CFO may not have the necessary expertise to handle it.
That's where a highly qualified interim CFO can be an invaluable addition to the finance team. They can step in and work alongside the existing CFO to relieve some of the workload, helping guide the business to a successful outcome. The interim will have experienced the same situation in previous roles and will arrive already possessing the skills to handle it.
As a secondary benefit, an interim CFO will share their expertise and knowledge, acting almost like a mentor to the wider finance team, helping develop the team’s skills and experience, and shrinking that skills gap.
Transformation or restructuring
Today's finance function is increasingly complex, facing the multiple and evolving complications posed by challenges like shared service centers, ERP systems upgrades and rollouts, the constant need for data, and the emergence of AI. Bringing in a temporary CFO who has valuable skills and experience in whatever technical challenge a company is facing can help turn things around quickly. Interims provide a fresh perspective and strategic guidance that can help restructure a finance team for long-term success.
Interims CFOs have a wealth of experience implementing best practices, identifying inefficiencies and reducing costs. At the executive level these are some of the most in-demand skills, because they can build a finance department that is more efficient, streamlined and agile. With an interim CFO, organizations can fix whatever issues are currently at the top of their list, while also introducing a catalyst for meaningful change.
A CFO is not performing or has already left
This is the most common reason to hire an interim CFO since there are significant risks to leaving the post vacant. But that doesn't mean that an interim is just there to keep the seat warm until a permanent CFO comes in. Interims can achieve a lot in a short space of time, which can include improving the performance of the function and ‘putting their arms’ around a team who may have been through a lot of change.
To cite one of our clients as an example, their previous CFO had been exited from the business due to the department’s performance and internal cultural issues. Our interim was initially brought in to cover the function, tasked by the client with 'looking at the numbers'. But within days of having looked at those numbers, the interim jumped into action, raising the emergency financing needed to recapitalize the company. It was a completely unforeseen situation for both the client and the interim, but the interim had necessary skills and the professional agility to get it resolved quickly and efficiently.
Their next task was to rebuild morale in the finance team. This was vital to retain talent within the team who had been working in a challenging environment which culminated in the loss of their leader. Interims tend to be experienced leaders, able to be the North Star and provide not only direction, but mentorship for permanent talent. The finance team was sorry to see the interim go, but with a handover to the new permanent CFO after six months, the mission was complete.