Hiring a finance director (FD) is a significant investment for a business, and the often-exhausting process usually comes at the most inopportune moment. Our advice is to appoint an interim FD to support the business through the transition and enable the CEO to focus on making the correct long-term appointment.
In our latest blog, we introduce the role the interim FD can play in helping early-stage and growing entrepreneurial technology businesses fill the chasm left by the outgoing FD.
Arguably, the most crucial relationship at the executive team level is the dynamic between the CEO and FD, so it’s important to take the time to find the right person for this pivotal position.
Replacing an outgoing FD or finding cover for long-term leave can be a daunting prospect, particularly if the CEO is time-constrained.
So, what’s the solution?
An interim FD can ‘hold the fort’, and so much more
An option growing in popularity amongst entrepreneurial technology business is the use of an interim FD; a flexible resource which can fill the void created by an outgoing FD.
As well as taking control of the company’s finances, ensuring the cash is flowing and supporting fundraising if required, the interim FD can unlock resources within the company and enable the CEO to devote more time to find the most appropriate replacement.
The changeover of an FD can create a chasm, which if left unaddressed could be filled by the wrong people.
The permanent FD required at present may differ from the CFO required in the future, so it’s important to recruit the right interim FD to manage this transition.
The interim arrangement has many advantages:
- An experienced interim FD can join the team at short notice before the incumbent FD has left the business and provide cover and continuity, ranging from a few weeks to a few months.
- The presence of an interim FD will bring stability and continuity to the finance function at what can be a particularly unsettling and uncertain time for the existing team.
- The CEO can continue to concentrate on company leadership, innovation and revenue-generating activities without being distracted by accounting and finance responsibilities.
- An interim can support the CEO before, during and after the permanent FD recruitment process:
- By providing a professional opinion.
- By drafting the job specification.
- By reviewing candidate applications.
- Once a permanent FD is chosen, the interim can cover the incoming FD’s notice period and provide a comprehensive handover to the new FD to ensure he/she is fully briefed and able to seamlessly integrate into the business.
- Beyond the recruitment process, banks, investors and other key stakeholders will be reassured that a competent, knowledgeable and reliable FD is in place through the transitional phase.
- Similarly, the interim FD can also provide additional support and mentoring to phase the incoming FD into the new environment.
How to choose the RIGHT interim FD for your business
Attributes of a successful candidate
What makes a successful interim FD?
In the interest of brevity, it’s a given that the FD needs technical knowledge and expertise, but it’s also important to consider the skills and experience that differentiates one interim FD from another.
- The interim FD will be expected to inject fresh motivation, stability, direction and balance into the finance function.
- They should have the ability to provide industry insight and strategic support to the CEO.
- An interim FD who works without a personal agenda will be motivated to drive growth in the business, and not their career. Interim FDs operating in this way will be more effective in providing a balanced opinion in matters of importance.
- A track record of working with companies at a similar stage of growth, on an interim basis. For example, an operational FD required for a business in steady-state will have a different type of experience to a fundraising specialist required by a startup or a turnaround expert for a business in decline.
- Their personality exemplifies the company culture is crucial in setting the tone for the organisation.
- Often, it’s prudent to find an interim FD who has a different approach to other people within the organisation. Such an appointment can be the catalyst for business change and positive competitive tension.
Recruiting an interim FD: Key things to consider
During the recruitment process, it’s useful to think about the following questions:
- How experienced is the interim FD in dealing with the specific opportunities and challenges faced by the company?
- How well does the candidate supplement the skills of the existing team?
- How extensive is the FD’s network? If he/she encounters an issue, can they call on the support of a wider team?
- Will the interim FD be available for the whole of the required time frame?
- To what extent is their agenda going to impact the business?
- What relevant ‘soft skills’ and personal qualities are required?
- How much experience does the FD have in managing the finance function of a business as it expands into new markets?
How can iFD help?
Our FD services can be blended with fully outsourced accounting and HR solutions, supported by a network of experienced accounting and finance professionals from our main group Isosceles Finance