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A Common Mistake in Family Business CFO Succession


The journey to appoint a new Chief Financial Officer (CFO) in a family business can often unfold like a complex narrative, weaving together threads of expectations, realities, and the nuanced dynamics unique to family enterprises. Take, for example, the story of Jerry—a CFO whose tenure spanned over three decades in a family business, becoming an integral part of its legacy. Jerry's story offers invaluable insights into the art of executive search in family businesses, emphasizing the importance of aligning the search process with the unique ecosystem of family enterprises.


From Accountant to Confidante: The Evolution of a Family Business CFO

Jerry's career didn't start in the executive suite; it began in the trenches as a staff accountant, fresh from the ranks of the company's external auditors. Over the years, Jerry's role expanded beyond the black-and-white numbers of accounting, growing to encompass a spectrum of responsibilities. Her expertise wasn't just in ledgers and financial forecasts but in understanding the heart and soul of the business—a unique blend of family values, employee relationships, and the legacy of the brand.

Jerry stood as the financial steward of the business, advising through economic changes, strategic expansions, and the delicate act of balancing tradition with innovation. Her role was less about the title of CFO and more about being a trusted advisor and confidante to the family, showcasing the profound bond that can develop in family business settings.


The Search for Succession: A Lesson in Expectations vs. Reality

However, the tale takes a turn with Jerry's retirement, unveiling a common oversight in family business transitions: the challenge of finding a successor who can carry on the legacy without disrupting the unique fabric of the business. The search for Jerry's replacement concluded with a candidate whose credentials were impeccable but whose fit within the business was less than ideal.


This situation brings to light the triad of challenges in family business CFO searches:

  1. Understanding the Role: Often, family businesses, guided by their experience, might not fully appreciate how a role has evolved over time. Jerry's position had grown organically, incorporating tasks that extended well beyond traditional CFO duties.

  2. Tailoring the Search: The necessity for the search process to reflect the unique culture, values, and requirements of the family business cannot be overstated. A standard approach may overlook the subtle yet critical aspects that define the business's ecosystem.

  3. Selecting the Right Fit: Beyond the resume lies the essence of a successful executive search—finding a candidate whose professional skills are complemented by an alignment with the family business's ethos and culture.

The Road to Successful CFO Succession in Family Businesses

Drawing from Jerry's narrative, several steps emerge as essential in navigating the CFO search in family businesses effectively:

  • Deep Dive into Unique Requirements: Begin with a comprehensive analysis of the role's unique blend of responsibilities, ensuring the search criteria encompass both professional skills and personal fit.

  • Crafting a Clear Position Description: Move beyond titles to describe the essence of the role, capturing the broader scope of responsibilities and the qualities essential for success within the family business context.

  • Embracing a Holistic Selection Process: Look beyond achievements to assess candidates' compatibility with the business's culture and values, ensuring they resonate with the legacy and vision of the family enterprise.


Conclusion: Charting a Course for Future Leaders

The search for a CFO in a family business is more than a quest for a financial executive; it's a search for a steward of the business's legacy and a guardian of its values. By learning from experiences like Jerry's, family businesses can approach executive transitions with a strategic, nuanced perspective, ensuring the selection of leaders who not only respect the past but are also capable of navigating the future.

At Stranberg, we understand the unique challenges and opportunities that come with executive searches in family businesses. Our approach is tailored, our insights are deep, and our commitment is unwavering—to guide family businesses through the delicate process of leadership transition, ensuring a legacy of success for generations to come.

 

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