Outsourced Services Series:
Sudden Lapse in Leadership
By Terry Hill
When your firm’s CFO leaves suddenly – maybe for a new job,
or a leave of absence, even death – it’s likely an unwelcome
and unnerving event.
You may ask yourself: “How will we manage the firm’s
activities without her/him?” “Will this have an impact on our
LP relationships?” “How do we communicate this change to
our constituents and stakeholders?”
You’re going to search for their replacement – perhaps
you’ll leverage your network, or, better, hire a retained
search firm to find you the best option in the marketplace.
With the current limits on available finance and accounting
professionals, funds should expect wait three to six months
for the culmination of a search, candidate acceptance, and
a start date. This is not the time, however, to rush or cut and
paste the old job CFO description into a new requisition. It’s
very likely your firm has changed, sometimes dramatically, so
this transition represents an ideal time to review what your
needs really are. The departure of a CFO may indeed be a
case of catastrophe-turned-opportunity. A fulltime interim
CFO solution provides a unique set of advantages.
The main priority, of course, is to make sure the firm’s
activities are not interrupted. It’s wise to avoid the temptation
of pulling someone else away to “cover” in the absence of
the CFO. This jeopardizes deal sourcing, diligence and other
important activities that drive the fund’s value to LPs. The
rapid deployment of an interim CFO often provides a small
period of overlap with the outgoing finance or accounting
leader and helps ease the transition. It also mitigates the
risks of time passing and milestones being missed. Managing
communication is also an important aspect of transitioning
your CFO. Insuring the market, your LPs and your people don’t
interpret this event as a signal for concern is critical. Speed
of response, rapid onboarding, proper communication and a
bias towards action and deliverables are all the hallmarks of
a successful interim project. This avoids business disruption
and mitigates human capital risk (others leaving).
Additionally, there is inherent value in what an interim CFO
represents. The interim solution is not there to position
themselves for a job, or take someone else’s position. They
are not there to create a new pecking order, disrupt the flow
of information or assert a new authority. The fulltime interim
solution delivers a blend of competency and immediacy
while being chameleon-esque. This outsider now working
alongside your people can bring a fresh, outside perspective
on opportunities for improvement. People, processes and
12 BPM Real Estate Insights
systems are all in play, and receiving an unvarnished opinion
on what is working and what is not provides the fund with
immeasurable value. In the course of the project, many of
these improvements will be started while some may also get
completed altogether. Moreover, the interim CFO should also
assess the current talent around them and offer mentorship
development to professionals who want to advance.
So, when you lose your CFO, keep calm. Contact a firm that
provides interim CFOs, and you’ll be able to carry on. n
The Outsourced Services Series of articles illustrate
examples of services real estate companies can leverage as
they navigate the many strategies and decisions firms have
to make. In each article, BPM professionals address trigger
points that might drive these kinds of decisions.
Terry Hill is a Managing Director in BPM’s Advisory Group.
Contact Terry at [email protected] or 415-288-6244.