June 23, 2023
Read time: 2:37 minutes
In the last 7 years, I've made some boneheaded decisions when it comes to hiring fractional CFOs. This has cost me a boat load of money.
Hiring other fractional CFOs for your firm is one of the most important investments you can make. It's also the most impactful investment you can make.
✅ Get it right:
The impact could be hundreds of thousands in new revenue and profits.
🚫 Get it wrong:
The impact could be hundreds of thousands in lost profits and pissed off clients.
Over the years, I've learned there are a few things you can do to exponentially increase the odds of the former. While simultaneously decreasing the odds of the latter.
You have to invest in the hiring process if you want the best out of the hiring process.
If you don't invest in the hiring process, you're setting up everyone for failure.
• Your firm.
• Your clients.
• Your new hires.
Not to worry!
When done correctly, investing in the hiring process will set you, your clients, and your new hires up for much success.
So how can you invest in the hiring process? I'm going to share 3 of the most impactful lessons that I've learned so your next fractional CFO hire is a win.
#1. Test for skills.
You've got to make sure that the potential new CFO can actually, you know, do the work.
I've found that having a prepared case study is a great way to test for this. Provide some background information and a set of financials. Ask them to analyze the information and share their thoughts.
What insights did they offer?
Did they ask smart questions?
Were they able to analyze the data?
Were they able to identify problematic trends?
👉 Another skill I like testing fractional CFOs for is the willingness to get on camera.
The reality of our world is that the majority of CFO client interactions occur via Zoom. If a candidate can't function in front of someone on camera, it's a dumpster fire in waiting.
I only share this because it's been a problem in the past and I want you to be on the look out for it.
I've found that asking them to submit a 60 second video explaining their passion for CFO work does the trick. Most aren't willing to even try. I can work with those that do.
#2. Do the final interview in person.
You will learn more in an hour sitting across the table from someone that you'll learn in 5 days of Zoom interviews.
There's a sort of magic in being able to shake someone's hand and have a conversation over a meal.
Face to face.
Doing actual human being stuff.
The insights and rapport that you'll establish are so valuable. And they can't be replicated via Zoom.
Here's how I do it:
I fly out in the morning.
Then spend an hour or two having lunch together.
I'm on a flight home that afternoon and I'm home by dinner.
Yes, it's an expensive investment.
But considering what's on the line, what's the cost of not doing it?
#3. Be prepared to lead and manage (regardless of salary!).
"She has 17 years of experience. I'll hire her, give her some clients, and then just let her do her thing."
Words like this are often uttered about 90 days prior to these words...
"She sucks. She's not doing anything right. With her background, I shouldn't have to manager her!"
Rookie move my friend. Rookie move.
Even seasoned professionals have to be managed and they have to be led.
I'm not suggesting that you should have to show them how to build a set of financial projections. Those are basic competencies which should have been verified in #1 above.
You do need to train them on how your firm does things.
You do need to verify that they understand expectations.
You do need to ask if they have any hurdles in their way.
You do need to invest in them even after they're hired.
Even if they have years and years of experience.
Even if you pay them lots of money.
In retrospect, I feel foolish that I missed these three points for so long. They all feel so obvious now. They each cost me a ton.
My hope for you is that you try at least one of these in your hiring process.
Whatever the investment is, it will pay off 100x or more in the long run.
Whenever you are ready, here are 3 ways I can help you:
1. The Inner Circle - every month my team and I go live and share the most impactful lessons we've learned in our journey to start, scale, and optimize our own CFO firm (including live Q&A). Plus you'll get access to our private community of nearly 150 fractional CFOs.
2. The CFO Academy - This is a 7 week deep dive into the exact playbooks that I use to run my firm, KFE Solutions.
3. If you'd like more amazing (and free!) content about starting, scaling, or optimizing your Fractional CFO firm check out:
→ The CFO Report on YouTube (if you love video)
→ The CFO Report on Apple Podcast (if you prefer audio)