When hiring for a new CFO at a PE-backed company, sponsors and CEOs want the same things, almost. What are the nuances in their thinking, and what does that mean to you as a candidate?
Today’s Version 3.0 CFO
The role of the CFO is evolving. For PE-backed portfolio companies, CFOs are expected to display a combination of not only exceptional operational orientation that aligns with their current business, but forward-looking analysis and FP&A skills to guide performance forward. CFOs are now the financial storytellers who can take the numbers they use and identify exactly how to propel growth.
“Increasingly, the CFO position has the opportunity to manage business transformation projects and step into larger, more impactful roles, including managing P&L’s,” says Thomas Hahn, three-time private equity C-suite executive. “Lower middle-market PE companies may have favored high functioning accountants in the past, but now may be realizing the value of an enhanced CFO skill set in an effort to keep management teams smaller but still capable. A candidate with the CFO-plus potential/skill set will cost more, but that is often justifiable in the lower middle market.”
“PE firms are data-driven. They look for CFOs with strong operational accounting backgrounds to drive the collection and analysis of data,” says private equity advisor, board member, and former CEO Bill Hewitt. “CEOs look for strong financial planners, so a good mix of the two is desirable.”
Ultimately, both sponsors and CEOs want the same thing — to partner with the CFO to drive growth and performance. The road to best achieving that goal is what presents opportunities for debate. CFOs must effectively navigate a bala...