As for Steging — and his client who’d already had a visit from the IRS — “I referred him to a tax accountant who had a law degree as well.” (See how the tax efficiency of public companies measures up (provided they pay up) with the CFO PeerMetrix Interactive Tax Efficiency Scorecard.)
8. The CEO Stays in the Picture
During the interview process, a CFO shouldn’t have trouble arranging whatever one-on-one meetings might be needed. And so when Tatum’s Schleizer was referred to a private company recently, he assumed that he would be able to talk with the controller, the heads of marketing and operations, and salespeople.
Schleizer did meet with the CEO, but he learned that he couldn’t interview the other senior managers unless the boss joined them. Suffice it to say, Schleizer didn’t stick around long enough to find out why. “If I can’t talk to key employees without the CEO being present,” he says, “that’s a tip-off.”
Leaving was the smart move. The difficulties were “a lot more than the guy let on,” Schleizer later discovered. “I have no problem going into difficult situations,” he adds, but “you don’t want to be surprised — get a lawsuit in the mail the next day, for instance. You can’t deal with that when you’re dealing with operational difficulties.” (Some companies do get it right; find out more in “What Works: Building a Strong Finance Team.”)
9. “Mary Works in A/P”
Sometimes, you can hear a lot just by listening. In the lobby of a prospective employer, while waiting to meet with the CEO, Jim Greer heard the repeated page, “Mary, you have a call on line 1.” Says Greer: “Find out if Mary works in A/P. If she’s ducking phone calls, it could be indicative of a severe cash problem.”
You laugh — but after he accepted the position as CFO of the venture-backed manufacturer, Greer might have wished that he had the benefit of his own advice. Yes, Mary was employed in the accounts payable department; yes, there were cash problems, especially after the VCs stopped funding the company; yes, Mary was dodging phone calls because she didn’t want to deal with irate vendors. And yes, after Greer took the job, he started getting the calls himself.
Some CFOs welcome the challenge of a troubled company. eUniverse’s Varraveto says that many of his more job-security-conscious peers would likely have walked away from his job when he took it two years ago. “If you looked at the business financials, they were not entirely that healthy,” he says. “The company had not started to monetize its assets.” Notes Varraveto, “Risk of failure was probably high.” That goes for the CFO as well as the company. (For more about taking on a troubled company, see “Meet the New Boss.”)