Upside/Downside - Grow Your Profits and Cash Flow

Ep 14: What Companies Need in a CFO with Samuel Dergel, Founder & Principal at Dergel Executive Search

• Matt Cooley • Episode 13

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Welcome to Season 2 of Upside/Downside!  Samuel Dergel, Founder & Principal of Dergel Executive Search, shares what companies are looking for in a CFO/Finance Business Partner, why you need to be a people person, and how to deliver value at every stage of your career.  Straighten that collar and listen in.

Thank you for listening and please visit Upside/Downside podcast and enter your email for my FREE list: "10 places to look for higher profits and cash flow right now!".

Matt

SPEAKER_00:

Hi, this is Matt Cooley, host of the podcast Upside Downside, where we explore what it takes to be the best finance business partners possible. I'm a finance business partner myself and former president of the New York City chapter of Financial Executives International. Prepare to meet professionals on the front lines of value creation and hear their stories. If you would like to suggest a future guest for this podcast or be a guest yourself, please reach out. Now on to today's podcast. Please welcome Samuel Dergel founder and principal of Dergal Executive Search and founder of Dergal Media. Welcome, Samuel. Hello. How are you? I'm doing great. Thank you so much for joining us today. I appreciate your time. Please tell us about your business, Samuel, and how you came to the role that you have today. You're doing some very cool things.

UNKNOWN:

Yeah.

SPEAKER_02:

Yeah, thanks. I'm fortunate to do what I do. I work in executive search. I started my career on CPA track. I was an EY for a few years, then did the typical CPA track things in industry. But by the time I was 30, I realized that I liked the people side more than I liked the numbers side. And a couple of career mistakes later, I ended up in recruiting. I've been doing that for 20 years. Nice. The last 10 years have been... I've been in retained executive search. One of my specialties is the finance function. So I recruit CFOs and the people that help CFOs be the best that they can be. And six years ago now, actually, we're 2021. So seven years ago now, I published a book through Wiley called Guide to CFO Success. And I even got a message on LinkedIn today from someone that said, Love the book. Thanks. It really made a difference. So that's a lot of fun. I've

SPEAKER_00:

read that book, by the way. Yes, it was good work there. Has it been seven years since you published that?

SPEAKER_02:

We're in 2021, and I published in February

SPEAKER_00:

of

SPEAKER_02:

2014. Wow. Quick math.

SPEAKER_00:

There you go.

SPEAKER_02:

And I can still do quick math. So I'm a recruiter. One of my focus areas is financial executives. I work across the US and Canada. And so that's my business. I also do coaching for CFOs. I started, I've been publishing something called CFO Moves for the last nine plus years, every week. And earlier in 2020, I was a CFO. We kind of began a business unit called Durable Media to do CFO Moves and all the other executive moves blogs that we put out on a regular basis.

SPEAKER_00:

Nice, nice. So you're a busy guy, it's safe to say. And also, based on what you're saying, an awesome resource for information for financial executives. I think that's pretty clear. Let's jump into it. So this podcast is for finance business partners. And I'd like to start off with, we're seeing so much transformation right now in the finance function. It doesn't matter what industry you're in. That transformation could be digital, cultural, skills, mindset to do the job, so on and so on. Samuel, what are companies telling you that they're looking for these days? Are they finding it? And where are we still coming up short as finance business partners? Love to hear your thoughts on this.

SPEAKER_02:

I just got off a phone call with a client of mine for a CFO search we're doing. They're in an industry that's been changing so fast. I mean, we started the search a few months ago and it's almost like they're in a different business. And so the CFO search itself is changing on the fly because what does the client, what does the business really need? So when it comes to what companies are looking for, you work with the term finance business partner, and that's really what a CFO needs to be. What's the business? Where's the business today? Where does the business need to go? And how does the finance business partner, who is responsible for the finance function, help the business get there and succeed? The finance business partner, the CFO, is the person that works with the the person running the business and the other executives in the business to make it happen. And they got to do whatever they got to do. And as the business changes, they have to change. Old school CFOs cannot be successful in today's environment.

SPEAKER_00:

And by old school, let me throw a definition in there. You mean somebody that might be purely focused on the accounting side, for example.

SPEAKER_02:

The accounting side needs to get done. But if it's just about the accounting, then they become a chief accounting officer, perfectly acceptable.

SPEAKER_00:

Right. Vital role, vital role, no doubt.

SPEAKER_02:

You know, without that, you know, there's nothing running, but it's not just about accounting. It's about the business. And, you know, many people don't go into the finance function because they like numbers, but they better like people because if they don't like people, then they can't get to the top

SPEAKER_00:

job. So in your searches, are you finding what your clients are looking for? Is the market shifting to that business-minded CFO? We hear about it and read about it all the time. I'm curious from the front lines of your search practice, Are you fulfilling their needs?

SPEAKER_02:

Oh, absolutely.

SPEAKER_00:

I

SPEAKER_02:

mean, I wouldn't be in business if I didn't. But the biggest challenge in the hiring is not me. The biggest challenge, because if you need whatever you need, I will make sure that you get it. And so will my competitors who are just as good as me or maybe even more experienced and better, if that's possible.

SPEAKER_00:

I would not suggest

SPEAKER_02:

that. I have to fake being humble a little. The fact is that companies... Most companies think they know what they're looking for, but do they really know what they're looking for? Do they really know what they need? People use experience. Have they done this before? Well, in January 2020, nobody would have asked for, have you gone through a pandemic before and know what to do? Right. You know, you got to figure it out. Things change. The agility to make a plan, change the plan on the fly and deliver still is is where new school CFOs, that's the space that they work

SPEAKER_00:

in. Okay, now that's interesting. So certainly after going through this last year together, that makes a lot of sense. And what you're saying is you are able to meet your client's needs, of course, otherwise your competitors would. In times of change, I've found that you might be asking for the wrong things in a candidate or things that aren't quite represented in the market just yet. That's really interesting. I appreciate that. In a recent podcast with another guest, the topic of CFO tenure came up, and I'm curious to ask you about this as well. The tenure of public company CFOs, according to Korn Ferry and Spencer Stewart, is roughly five years and has been for some time. Other surveys say for private companies at 10 years, quite a bit less than five years. Can a CFO really navigate these kinds of epic transformations that are on in a two to even five-year timeframe? Is that reasonable for them to be able to accomplish that?

SPEAKER_02:

It's reasonable, but you need the right team. In Guide to CFO Success, I came up with this picture that put the CFO at the middle and their success is based on the people that they work with at the top, which is the CEO and the board and the shareholders. On one side of them is their external people they have to work with, the auditors, the lawyers, the consultants, the investment bankers. And on the inside, the people that they have to work with are their fellow executives. And the foundation for any CFO success is the team that they have. So to be able to transform, the CFO is going to lead the transformation Plan the transformation. Push the transformation. But the delivery of that transformation is going to happen working with their team, working with the people within the company that are also going to have to change. And that's where relationship building is key because it's not about what you can do. It's what you can get others to do.

UNKNOWN:

Mm-hmm.

SPEAKER_00:

Particularly as the leader. Yep.

SPEAKER_02:

So others, meaning, you know, those working for you and those not working for you, you know, influencing skills is one of the things that too many finance executives may not have enough of.

SPEAKER_00:

Okay. Well, I, I know, in my role at the company I'm with, influencing is the bulk of what you do, whether you have direct reports or not. So I hear you. And what do you think is driving that lack of influencing skills?

SPEAKER_02:

The finance... People that are trained in financial departments, in companies across the country, they're being trained to do something technical. Are they being trained to go beyond that? Are they really being trained on leadership skills?

UNKNOWN:

No.

SPEAKER_02:

The answer is mostly not. They're given a task, go ahead and do it and do it most efficiently. But, you know, are people really being developed, you know, at the five-year mark in their career, at the 10-year mark of their career, at the 15-year mark of their career? Many times not.

SPEAKER_00:

Yeah. Okay. So I'm curious, you know, Let's here's the scenario. You have an early career candidate sitting out in the hall waiting to meet you and a late career candidate also waiting to meet you. They're interviewing for a position. How did those conversations typically go today? Early career versus late career?

SPEAKER_02:

Late career candidates are aware that they have a timeline left to their career, and many of them want to accomplish certain things within that timeline. It's interesting because a lot of them will tell me it's not about the money, it's about accomplishing because I've already accomplished. Now, I don't need it to be my biggest accomplished, but I do want to have an impact. An early career candidate is more focused on what's in it for them as opposed to financially than what's in it for them career development wise. So they're looking at different things based on the stages of life that they're at. But there are more opportunities for earlier career candidates than later career candidates based on the biases that are out there. However, I've seen the biases work in different ways. If you're looking for someone with experience and are willing to pay for it, and that I think is the lever between the decisions, you go for someone who's done it before because that's what's needed. So I'll give you the answer I learned in my early accounting days. It depends.

SPEAKER_00:

I've heard that recently with recent guests, the old it depends answer. Yeah. Interesting. Okay. Where is the finance business partner role headed from your perspective? And what should we be doing now to prepare for that future? You covered some of these things. But if you could give your advice to finance business partners about, let's say the next five to eight years, what would that be?

SPEAKER_02:

the biggest advice I'd give them is to figure out what they really want. I asked this question to 30 year olds and I asked this question to 65 year olds. It's the same question. It's what do you want to be when you grow up?

SPEAKER_00:

Okay.

SPEAKER_02:

And people laugh at it like, like you just did. And that's, you know, the older they are, the more they laugh. But

SPEAKER_00:

wait, I want to revise my laugh then.

SPEAKER_02:

Please go ahead. You can, you can edit it if you'd like. We've gone through a very difficult year and something I learned in 2008 when it was a pretty tough year for people in the finance world. If people are losing their jobs, it's a recession. If you lose your job, it's a depression. Now, and I get this question in many of my conversations with people. It's how's the market going out there? To me, the answer is very simple. The macro market is fine. How's the micro market? How's it for you? And people will have different answers. Because they're at different stages, they're different perspectives, different personalities. The role of finance business partner, as it continues, is be there for the business as it changes and you better change with the business. So that's where the change comes in. The relationship side, the influencing side, the strategic side, those are sides that are always going to be valuable. What a business needs today is different from what it needed last year and what it's going to need this year. The question that any finance business partner has to ask themselves is, am I still the right person for this?

SPEAKER_00:

Or do you have the ability to learn new things so that you can become the right person? In my experience, it's sad to say there are a fair percentage of people that don't really want to change. There's also a large percentage that do.

SPEAKER_02:

For those that don't want to change, they need to find something that will fit what they want. And that's okay.

SPEAKER_00:

Right. It's totally okay. But as you said at the beginning of that question, you have to figure out what you really want, which I think is spot on. I

SPEAKER_02:

would say many, many people don't. And And the last comment I would say on career change and finance leaders is that many times, and I see this regularly, people have been moving up the ladder because that's just what happens. And they continue to move up the ladder until there reaches a point in their career where they're too expensive for the value that they're delivering. And then they get restructured.

SPEAKER_01:

Most

SPEAKER_02:

people in this situation are shocked, but what they don't understand is they haven't, they've just gone along with the flow because it's easy to promote you because they trust you and all that kind of stuff. But in the end, you know what? You're replaceable. What are you doing to invest in your career? And I don't mean just skills. Okay, you as a finance executive are your own market. Are you marketing yourself? Are you building your reputation? Are you building your network? And by network, I don't mean how many people you're connected to on LinkedIn. But the better question is, how many people will return your call because they want to talk to you?

SPEAKER_00:

Right. That's a good one.

SPEAKER_02:

Not enough. Not enough people are at that. Not enough people are investing in themselves because finance professionals are always busy. And they like to be busy, but it's easier for them. They would prefer to spend time with Excel than with other people.

SPEAKER_00:

That's a good way to wrap this up. Yeah, you strike at the heart of where we need to improve. Samuel, I really want to thank you for your insights today. And I really appreciate your time. I always enjoy talking to you, man. And thank you to our subscribers for listening to this episode of Upside Downside. We will see you next time.

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Matt Cooley

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