Deloitte Insights and our research centers deliver proprietary research designed to help organizations turn their aspirations into action.

DELOITTE INSIGHTS

  • Home
  • Spotlight
    • Weekly Global Economic Outlook
    • Top 10 Reading Guide
    • Future of Sports
    • Technology Management
    • Growth & Competitive Advantage
  • Topics
    • Economics
    • Environmental, Social, & Governance
    • Operations
    • Strategy
    • Technology
    • Workforce
    • Industries
  • More
    • About
    • Deloitte Insights Magazine
    • Press Room Podcasts

DELOITTE RESEARCH CENTERS

  • Cross-Industry
    • Home
    • Workforce Trends
    • Enterprise Growth & Innovation
    • Technology & Transformation
    • Environmental & Social Issues
  • Economics
    • Home
    • Consumer Spending
    • Housing
    • Business Investment
    • Globalization & International Trade
    • Fiscal & Monetary Policy
    • Sustainability, Equity & Climate
    • Labor Markets
    • Prices & Inflation
  • Consumer
    • Home
    • Automotive
    • Consumer Products
    • Food
    • Retail, Wholesale & Distribution
    • Hospitality
    • Airlines & Transportation
  • Energy & Industrials
    • Home
    • Aerospace & Defense
    • Chemicals & Specialty Materials
    • Engineering & Construction
    • Mining & Metals
    • Oil & Gas
    • Power & Utilities
    • Renewable Energy
  • Financial Services
    • Home
    • Banking & Capital Markets
    • Commercial Real Estate
    • Insurance
    • Investment Management
    • Cross Financial Services
  • Government & Public Services
    • Home
    • Defense, Security & Justice
    • Government Health
    • State & Local Government
    • Whole of Government
    • Transportation & Infrastructure
    • Human Services
    • Higher Education
  • Life Sciences & Health Care
    • Home
    • Hospitals, Health Systems & Providers​
    • Pharmaceutical Manufacturers​
    • Health Plans & Payers​
    • Medtech & Health Tech Organizations
  • Tech, Media & Telecom
    • Home
    • Technology
    • Media & Entertainment
    • Telecommunications
    • Semiconductor
    • Sports
Deloitte.com
Deloitte Insights logo
  • SPOTLIGHT
    • Weekly Global Economic Outlook
    • Top 10 Reading Guide
    • Future of Sports
    • Technology Management
    • Growth & Competitive Advantage
  • TOPICS
    • Economics
    • Environmental, Social, & Governance
    • Operations
    • Strategy
    • Technology
    • Workforce
    • Industries
  • MORE
    • About
    • Deloitte Insights Magazine
    • Press Room Podcasts
    • Research Centers
  • Welcome!

    For personalized content and settings, go to your My Deloitte Dashboard

    Latest Insights

    Creating opportunity at the intersection of climate disruption and regulatory change

    Article
     • 
    7-min read

    Better questions about generative AI

    Article
     • 
    2-min read

    Recommendations

    Tech Trends 2025

    Article

    TMT Predictions 2025

    Article

    About Deloitte Insights

    About Deloitte Insights

    Deloitte Insights Magazine, issue 33

    Magazine

    Topics for you

    • Business Strategy & Growth
    • Leadership
    • Operations
    • Marketing & Sales
    • Diversity, Equity, & Inclusion
    • Emerging Technologies
    • Economy

    Watch & Listen

    Dbriefs

    Stay informed on the issues impacting your business with Deloitte's live webcast series. Gain valuable insights and practical knowledge from our specialists while earning CPE credits.

    Deloitte Insights Podcasts

    Join host Tanya Ott as she interviews influential voices discussing the business trends and challenges that matter most to your business today. 

    Subscribe

    Deloitte Insights Newsletters

    Looking to stay on top of the latest news and trends? With MyDeloitte you'll never miss out on the information you need to lead. Simply link your email or social profile and select the newsletters and alerts that matter most to you.

Welcome back

To join via SSO please click on the key button below
Still not a member? Join My Deloitte

Managing transitions: CFO regrets

by
  • Save for later
  • Download
  • Share
    • Share on Facebook
    • Share on Twitter
    • Share on Linkedin
    • Share by email
27 August 2010

Managing transitions: CFO regrets A CFO Insights article

27 August 2010
  • Save for later
  • Download
  • Share
    • Share on Facebook
    • Share on Twitter
    • Share on Linkedin
    • Share by email

Getting a slow start on their talent needs and skimping on cultural due diligence are their two biggest regrets about their first year on the job, say many CFOs we interviewed.

DUP161_spotBased on historical averages, nearly one in five CFOs in the Fortune 1000 may change this year.1 In our study—Taking the reins: Managing CFO transitions—we found CFOs had to manage three key resources to successfully navigate through their first year:

  • Time—Both their own and their staff’s
  • Talent—Having the right people to execute initiatives
  • Relationships—Both internal and external to the company

When we asked CFOs who had navigated a transition beyond one year, “What one thing would you have done differently?”, we found two key considerations. First, most CFOs wished they had moved faster to get the right talent in place. Secondly, some CFOs wished they had conducted better cultural due diligence.2

Get the right talent in place

During our interviews, CFOs indicated that recruiting and aligning talent to priorities is one of the most important tasks—sometimes the most important task—they face in the first 180 days on the job. Ultimately, it’s the talent in the finance organization that executes the CFO’s agenda—either successfully or unsuccessfully. Thus, new CFOs have to quickly assess talent, recruit new “A” players to fill key gaps, and re-recruit the current team to their agenda.

During our interviews, CFOs indicated that recruiting  and aligning talent to priorities is one of the most important tasks—sometimes the most important task—they face in the first 180 days on the job.

Assessment often takes the form of direct conversations and observations. The CFO at one company got a quick read on his direct reports and other staff by asking pointed questions: What are you working on and why is it important? How do you measure success in your area? How do you assess your people? When one CFO didn’t receive answers from a direct report that were both strategic and valuable to the company, it was clear that a change was necessary. Within his first eight weeks, he had a new “A” player on board for that job.

Another CFO said it was important to observe people in action before reaching a verdict on their capabilities: “Sometimes it’s the quiet ones who actually got things done.” He likes to work with individuals to frame a set of desired accomplishments for the first few months (about 90 days)—and watch how they operate. He said that this gives him a truer measure of his people’s capabilities.

This so-called observation approach is more feasible when a CFO is coming into a stable finance organization without a burning platform for change. A number of CFOs noted the importance of the old Reagan maxim—trust but verify—in talent management as they observed their direct reports and the next layer of talent during their first 90 days. This was typically used to identify the “A”, “B,” and “C” players.

Great talent not only makes the finance organization more likely to succeed, but also helps CFOs conserve their time. Many CFOs encounter a talent conundrum when they take the reins. They may need “A” talent in a particular role, such as the treasurer, but currently have congenial “B” talent in the role. This forces them to choose between either bringing in a new person or trying to develop the “B” into an “A.” Many CFOs we interviewed regretfully chose the latter—and found that it took time away from other critical things they had to do. Thus, getting “A” players in key roles quickly is vital to conserve the CFOs’ time for other initiatives and tasks.

Not managing the fundamental trade-off between talent and time can lead to regret. One CFO noted, “You have to take some people out fast and make at least a few changes in the first three to six months. For me it was easy, because I had some ‘C’ players. But even if you have all ‘A’ and ‘B’ players, I think you still have to do it. You need to make sure it’s your team and that your people are aligned with you. I’m always amazed with leaders who accept ‘C’ and ‘C-minus’ players. My feeling is that if you don’t get rid of these people, you’ll regret it.” And this indeed was the primary regret we heard in our interviews.

When they’re looking for new talent, CFOs most often turn to executive recruiters or former colleagues for candidates and referrals. Bringing in new recruits could be an important trigger for raising the bar on performance and reshaping expectations within the finance organization. In addition to new staff, re-recruiting the existing staff and earning their allegiance is also important. The internal re-recruiting of peers, especially those who competed for the CFO role, can be a challenge. One effective approach to managing this is for a CFO to initiate direct conversations with the people who were passed over within a week or two after his or her appointment is announced. For the CFOs we interviewed who did this, the conversations opened by acknowledging that the other’s aspirations were not met, followed by a direct request for commitment to the new CFO, the team, and the agenda. Naturally, sometimes the passed-over peers leave—but clear understanding is helpful all around.

Conduct cultural due diligence

A second important regret that a few CFOs noted was tied to the lack of “cultural fit” with the organization they joined. Culture is the shared assumptions and beliefs of those in an organization. For a few CFOs, the lack of “cultural fit” left them frustrated by their inability to drive the people and organizational changes that could improve the performance of the finance function in a way that was personally rewarding. Cultural misalignment can occur at the company-wide level or between the CFO and his or her finance organization, based on how the prior CFO led the finance group.

Why did these few CFOs fail to undertake a successful cultural due diligence? While they all had had discussions with the CEO and other peer executives before taking the role, and some had also checked with their network of friends, these few CFOs found themselves in a quandary soon after they arrived in their new role.

There are a number of reasons for cultural misalignment. First, many employees and ex-employees do not want to speak negatively of their company or organization. Second, perhaps the prospective CFO did not probe deeply enough in their CEO interviews. For example, they may not have asked the CEO questions like, “Would you be supportive of changes in leadership in the finance organization, especially among long-serving employees?” Today, online employee communities such as vault.com create unprecedented visibility into potential cultural issues at a company. By tapping into these resources, CFOs can frame more discerning questions in their cultural due diligence. These questions could include what level of support the CEO would offer for changes in the finance organization’s talent and processes. If a prospective CFO fails to read the culture correctly, and finds CEO support lacking, he or she is best off leaving the organization as quickly as possible to join a more supportive environment.

CFOs’ regrets about culture and talent during their transitions into the job highlight the importance of effectively managing relationships, especially with the CEO, and the importance of quickly moving from assessing to recruiting new talent and re-recruiting existing talent to key priorities. More thorough upfront cultural due diligence and quick moves on talent can help save CFOs time they can use to focus on executing their key priorities, and it can also save them from later regrets.

To learn more about how CFOs successfully navigate transitions, see Taking the reins: Managing CFO transitions.3

Credits

Written by:

Cover image by: Jitesh Patel

Acknowledgements

CFO Insights is developed with the guidance of Dr. Ajit Kambil of Deloitte Consulting LLP, global research director, Deloitte CFO Program, and Lori Calabro, senior manager, CFO Education & Events, Deloitte LLP.

Endnotes
    1. Deloitte analysis of CFO turnover trends from 2004 through 2009. View in article
    2. Deloitte interviewed more than 20 CFOs whose companies collectively had over $160 billion in market capitalization at the time of writing. View in article
    3. Ajit Kambil, Taking the reins: Managing CFO transitions, Deloitte Development LLC, 2010, http://dupress.com/articles/taking-the-reins-managing-cfo-transitions/. View in article
Show moreShow less

Topics in this article

Deloitte Consulting

Learn more
Download Subscribe

Related

img Trending

Interactive 3 days ago

Share article highlights

See something interesting? Simply select text and choose how to share it:

Email a customized link that shows your highlighted text.
Copy a customized link that shows your highlighted text.
Copy your highlighted text.

Managing transitions: CFO regrets has been saved

Managing transitions: CFO regrets has been removed

An Article Titled Managing transitions: CFO regrets already exists in Saved items

Invalid special characters found 
Forgot password

To stay logged in, change your functional cookie settings.

OR

Social login not available on Microsoft Edge browser at this time.

Connect Accounts

Connect your social accounts

This is the first time you have logged in with a social network.

You have previously logged in with a different account. To link your accounts, please re-authenticate.

Log in with an existing social network:

To connect with your existing account, please enter your password:

OR

Log in with an existing site account:

To connect with your existing account, please enter your password:

Forgot password

Subscribe

to receive more business insights, analysis, and perspectives from Deloitte Insights
✓ Link copied to clipboard

Deloitte Insights and our research centers deliver proprietary research designed to help organizations turn their aspirations into action.

Deloitte Insights

  • Home
  • Topics
  • Industries
  • About Deloitte Insights

DELOITTE RESEARCH CENTERS

  • Cross-Industry
  • Economics
  • Consumer
  • Energy & Industrials
  • Financial Services
  • Government & Public Services
  • Life Sciences & Health Care
  • Tech, Media & Telecom
Deloitte logo

Learn about Deloitte’s offerings, people, and culture as a global provider of audit, assurance, consulting, financial advisory, risk advisory, tax, and related services.

© 2025. See Terms of Use for more information.

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ("DTTL"), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as "Deloitte Global") does not provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the "Deloitte" name in the United States and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see www.deloitte.com/about to learn more about our global network of member firms.

  • About Deloitte
  • Terms of Use
  • Privacy
  • Data Privacy Framework
  • Cookies
  • Cookie Settings
  • Legal Information for Job Seekers
  • Labor Condition Applications
  • Do Not Sell My Personal Information