Hiring a Fractional Professional? Some Helpful Hints to Help You Hire the Person You Need

I am a proud member of the fractional community. For the most part, our fractional community is comprised of ethical, experienced and successful professionals that have the experience and skills needed to help companies looking for help.? However, I have recently heard from a few potential clients, that they had had negative experiences with members of the fractional world. They had interviewed candidates that presented themselves as a Fractional CFO (“FCFO”). During each of their conversations it became apparent that the candidates had no CFO experience. In fact, one candidate had not even been a Controller. Unfortunately, there is a risk of engaging with a professional who might not live up to their proposal. The purpose of this article is not meant to “throw the first stone” at such candidates. Instead, this article will delve into some (not all) potential areas of concern and provide actionable steps to mitigate them. Additionally, hopefully this list can help companies spend their time talking only with candidates that have the skills and experience they need.

Common Concerns to Conquer

Misrepresented Experience and Skills:

Concern: A FCFO might overstate their experience or qualifications, leading to subpar performance.

Solution:

·????? Thorough Reference Checks: Request references from previous clients and colleagues to verify their claims. The cynic will say that they will only provide info of friends or only contacts where projects were successful and thus have no value. That may be true, but it is still worth the effort to connect with a reference or two. You never know what may be unintentionally divulged during a conversation.

·????? Skill Assessment: Some companies view this as a step to ensure a candidate knows what they are talking about. This may work with some positions, but at the CFO level, I personally think it is a bit offensive. A lot of candidates may have no problem with it and that is great for them. I would not submit to it. A personality test is a different story – I have no problem with those, in fact it can help me see if the company is a fit from my perspective.

·????? Review of Work: Ask to review a portfolio of their past work, including financial models, budgets, dashboards and strategic plans.

Lack of Proactivity and Initiative:

Concern: The FCFO might be passive and require constant prompting and even micromanagement which may hinder their effectiveness.

Solution:

·????? Clear Expectations: Clearly outline the company’s expectations, including the desired level of proactivity and initiative. I have worked with clients who utilize an EOS or similar software tool where all employees and contractors list and track their deliverables, etc. In so doing, it is easy for a CEO/Owner to make certain that the FCFO has listed all deliverables and can track their effort without having to talk with them.

·????? Regular Check-ins: Schedule regular check-ins to discuss progress, challenges, and future plans. In addition to an Eos system mentioned above, company leaders may establish a pattern of weekly status calls. Having an agenda for such meetings is an important tool to help make the most of such meetings.

Poor Communication and Responsiveness:

Concern: The FCFO might be unresponsive or have poor communication skills, leading to delays and misunderstandings.

Solution:

·????? Communication Preferences: Discuss your preferred communication methods and frequency. Some companies provide the FCFO with a company email address and calendar. Keeping the calendar up to date can help the company schedule meetings/calls without having to contact you. Also, if the company uses a messaging app, providing the FCFO access to the app can also help communication as the FCFO may be able to quickly answer questions asked through the app.

·????? Response Time Expectations: Set clear expectations for response times to urgent matters. It may not be possible to establish SLA type response requirements. However, I am aware of many FCFOs that establish key words with clients. For example, one FCFO instructed that if an email, text, etc needed to be addressed quickly, they needed to put “Urgent” or “High Priority” in the message line of an email or they needed to be the first word of a text. If the FCFO saw one of those words he would respond as quickly as possible.

Lack of Industry Knowledge:

Concern: The fractional CFO might lack specific industry knowledge, which could impact their advice and strategies.

Solution:

·????? Industry Experience: During the interview process, inquire about their experience in the company’s specific industry or similar industries. Ask questions about your industry – questions that only someone that has worked in the industry would be able to answer.

·????? Do Not Hire: If industry experience is a must have then do not hire any candidates that do not meet that requirement. There are a lot of FCFOs and certainly some that will check all of your boxes.

·????? Continuous Learning: If having industry experience is not a non-starter, encouraging the FCFO to stay up to date on industry trends and regulations would benefit all parties. However, this may be difficult as some FCFO’s may want to charge for such “on the job training”. Such education must be addressed before the engagement begins.

Fact-Checking Your Fractional CFO Candidates:

Verify Credentials:

·????? Professional Certifications: If candidates state they have certifications (CPA, CFA, or CMA), ensure they actually do.

·????? Educational Background: Verify their educational qualifications from reputable institutions.

·????? Professional Affiliations: Check their stated membership in professional organizations.

·????? Other items: Name, LLC name if applicable, tax id, etc

Check Online Presence:

·????? LinkedIn Profile: Review their LinkedIn profile for details about their experience, skills, and recommendations. Also check to see how many recommendations they give to others.

·????? Google Search: Conduct a Google search to see if any negative reviews or articles appear. This may be a little more difficult even with AI. Most of us share our name with hundreds, if not thousands, of people.

Ask Direct Questions:

·????? Specific Experience: Ask candidates for specific examples of how they've handled similar situations to yours.

·????? Challenges and Failures: Inquire about past challenges and how they overcame them. Do not ask psycho babble questions. Ask meaningful questions and ask for meaningful answers

Additional Considerations:

·????? Chemistry and Compatibility: A good working relationship is essential. Ensure you have good chemistry and compatible working styles. Working remotely, it can be difficult to add a FCFO and expect them to assimilate quickly. In many cases, other company leaders may want to see the FCFO in action before welcoming them to the team

·????? Pricing Structure: Understand the pricing model and any additional fees or expenses. This is by far the most combustible item. To help the relationship avoid going up in flames, it is imperative that the FCFO consistently provides status updates on hours, etc. Many FCFOs send a status email at the end of each week so the CEO/Owner is aware of the hours worked and tasks worked on.

·????? Contract Terms: Clearly define the scope of work, responsibilities, and termination terms.

By carefully considering these factors and taking proactive steps, a company can significantly reduce the risk of hiring a fractional CFO who doesn't meet your expectations. Remember, a strong working relationship built on trust, transparency, and open communication is essential for a successful partnership. If a candidate you are speaking with does not meet that standard you should continue your search. The fractional community is filled with professionals who can check all of your boxes.

Stay Ahead of the Curve: Follow These Minds

Videos

James Kennedy

https://www.youtube.com/@procurementexpress9417

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Podcasts

Jack Sweeney - CFO Thought Leader

https://cfothoughtleader.com/

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Kevin Appleby - GrowCFO Show

https://www.growcfo.net/growcfo-show/

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Harvard Business Review - The Growing Trend of Part-Time Executives

https://hbr.org/podcast/2024/11/the-growing-hr-trend-of-fractional-leadership

Articles Worth Reading :

Strategic Finance Magazine - Fractional CFOs can help companies fill short-term gaps—and scale for the future

https://www.sfmagazine.com/articles/2024/november/the-fractional-leadership-advantage