How regularly should you change your CFO?

The past 12 months we have worked multiple CFO mandates and each one has been vastly different. Clients have had outgoing or incumbent CFOs who whilst highly competent are not the right fit for the next period of growth.

This begs the questions how regularly should you change your CFO?

?In the fast-paced world of start-ups and scale-up high-growth companies, every decision can have a significant impact on the future success of the business. One such decision is whether to change your Chief Financial Officer (CFO) regularly. While some argue that fresh perspectives can bring new ideas and drive growth, others believe that stability and continuity are crucial for financial success. We will briefly explore the pros and cons of changing your CFO regularly in the context of a start-up scale-up high-growth company.

Pros of Changing Your CFO Regularly:

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1. Fresh Perspectives and Innovation: Bringing in a new CFO can inject fresh perspectives and innovative ideas into the financial management of the company. Different experiences and backgrounds can lead to creative solutions and approaches to financial challenges.

2. Adaptability to Changing Needs: Start-ups and scale-up high-growth companies often experience rapid growth and evolving business needs. Changing your CFO regularly allows you to find individuals who are better suited to the changing financial landscape and can adapt quickly to new challenges.

3. Access to Diverse Skill Sets: Hiring a new CFO regularly gives you the opportunity to bring in professionals with diverse skill sets and experiences. This can be particularly beneficial when expanding into new markets, implementing new financial strategies, or navigating complex financial regulations.

Cons of Changing Your CFO Regularly:

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1. Loss of Continuity and Institutional Knowledge: Frequent changes in CFOs can lead to a loss of continuity and institutional knowledge within the finance department. This can slow down decision-making processes and hinder the implementation of long-term financial strategies.

2. Disruption to Company Culture: Changing your CFO regularly can disrupt the company culture, especially if the finance team has to continually adjust to new leadership styles and approaches. A stable and cohesive finance team is vital for maintaining trust and collaboration within the organization.

3. Cost and Time of Recruitment: The process of recruiting and onboarding a new CFO can be time-consuming and expensive. Each transition requires conducting thorough searches, interviewing candidates, negotiating contracts, and providing adequate training and support. These costs can add up over time.

Deciding whether to change your CFO regularly in a start-up scale-up high-growth company is a complex decision that requires careful consideration of the pros and cons. While fresh perspectives and adaptability can drive innovation and growth, the loss of continuity and disruption to company culture should also be taken into account. Ultimately, the decision should align with the specific needs and goals of the company. Regular evaluation of the CFO's performance and alignment with the company's strategic direction can help determine whether a change in leadership is necessary for sustained financial success.

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If you have any upcoming requirements or market related questions pertaining to CFO hires please feel free to reach out on [email protected]