Evaluating Technical and Soft Skills for a VP of Finance

In the last article, “5 Ways to Attract Passive Finance Candidates”, we provided strategies to attract top finance talent, even when they're not actively job hunting.

Creating a strategy with the tools and resources you most likely already have can help you gain interest in those finance candidates who may not be on the market, but might be interested in learning more about joining your team.

With that said, finding the ideal VP of Finance is a critical task for any organization.

This role requires a unique blend of technical expertise, strategic vision, and interpersonal skills.

Let's dive deeper into the key areas to focus on during your evaluation process.

Assessing Financial Acumen and Strategic Thinking

Financial acumen and strategic thinking form the cornerstone of a VP of Finance's skill set. 

Here's how to effectively assess these crucial abilities:

1. Financial Analysis and Interpretation: Ask candidates to analyze a complex financial statement or report. Look for their ability to:

• Identify key performance indicators

• Spot trends and anomalies

• Draw meaningful conclusions from the data

2. Pay attention to how they communicate their findings. Do they present a clear, concise summary, or do they get lost in the details?

3. Strategic Financial Planning: Present a scenario where the company is considering a major investment or expansion. Ask the candidate to outline their approach to:

• Conducting a cost-benefit analysis

• Assessing potential risks and returns

• Developing a long-term financial strategy to support the initiative

4. Look for candidates who can balance short-term financial health with long-term growth objectives.

5. Industry Knowledge and Market Awareness: Engage in a discussion about current financial trends and challenges in your industry. Strong candidates should demonstrate:

• Awareness of industry-specific financial regulations and best practices

• Understanding of market dynamics and their financial implications

• Insights into potential future trends that could impact the company's financial strategy

6. Technology and Innovation in Finance: Inquire about their experience with financial technologies and their vision for leveraging innovation in finance. Look for candidates who:

• Understand the potential of emerging technologies like AI or advanced analytics in your industry

• Have experience implementing or working with modern financial systems

• Can articulate how technology can improve financial processes and decision-making

The goal is to find a VP of Finance who can not only manage the numbers but also use financial insights to drive strategic decision-making across the organization.

Evaluating Leadership and Communication Skills

While technical skills are crucial, the soft skills of leadership and communication can often make the difference between a good VP of Finance and a great one. Here's how to assess these skills:

1. Team Leadership and Development:

• Ask about their experience building and leading finance teams

• Inquire about their approach to talent development and succession planning

• Discuss how they handle performance issues or conflicts within their team

2. Look for candidates who demonstrate a balance of mentorship and accountability in their leadership style.

3. Cross-functional Collaboration: The VP of Finance needs to work effectively with all departments. Assess their ability to:

• Explain complex financial concepts to non-finance colleagues

• Collaborate with other executives on strategic initiatives

• Navigate potential conflicts between financial prudence and other departmental goals

4. Consider role-playing exercises where the candidate must explain a financial decision to a skeptical sales or operations team.

5. Board and Investor Relations: Evaluate their experience and comfort level in:

• Presenting financial information to the board of directors

• Communicating with investors or potential investors

• Handling difficult questions or pushback on financial strategies

6. Look for candidates who can instill confidence and clearly articulate the company's financial position and strategy.

7. Change Management: In today's dynamic business environment, the ability to lead through change is crucial. Ask about:

• Their experience implementing new financial systems or processes

• How they've helped their organization navigate financial challenges or crises

• Their approach to getting buy-in for potentially unpopular financial decisions

8. Strong candidates will demonstrate adaptability, resilience, and the ability to guide others through uncertainty.

Testing Problem-Solving Abilities

Problem-solving is at the heart of the VP of Finance role. Here are some effective ways to evaluate this critical skill:

1. Case Studies: Prepare a detailed case study based on a realistic financial scenario your company might face. For example:

• A potential merger or acquisition

• A sudden market downturn affecting your industry

• A major new product launch with significant financial implications

2. Ask the candidate to:

• Analyze the financial implications

• Identify potential risks and opportunities

• Develop a strategic financial plan

• Present their recommendations

3. Observe not just their final recommendation, but their thought process, ability to ask insightful questions, and how they handle any curveballs you throw their way.

4. Real-time Problem Solving: Present the candidate with a complex financial dataset they haven't seen before. Ask them to:

• Quickly identify key insights

• Spot any anomalies or areas of concern

• Suggest next steps for further analysis

5. This tests their ability to think on their feet and quickly make sense of new information.

6. Scenario-based Questions: Pose hypothetical scenarios that test both financial acumen and ethical decision-making. For example:

• How would they handle pressure from a CEO to manipulate financial reports?

• What would they do if they discovered a significant accounting error from a previous year?

• How would they approach a situation where financial and ethical considerations are in conflict?

7. Look for candidates who demonstrate strong ethical principles alongside their problem-solving skills.

8. Adaptive Thinking: During your case studies or scenarios, introduce unexpected changes or new information. This could include:

• A sudden regulatory change affecting the financial landscape

• Unexpected market reactions to a company announcement

• A major customer suddenly filing for bankruptcy

9. Evaluate how quickly and effectively the candidate can adapt their thinking and recommendations in light of new information.

In conclusion, finding the right VP of Finance requires a comprehensive evaluation of their technical skills, leadership abilities, and problem-solving capabilities. By thoroughly assessing these areas, you increase your chances of finding a candidate who can not only manage your company's finances effectively but also contribute to its overall strategic direction and growth.

Remember, the best candidates will demonstrate not just knowledge and skills, but also a genuine passion for finance and a strong alignment with your company's values and culture. Take the time to get to know candidates beyond their resumes and technical abilities. The right VP of Finance can be a transformative addition to your executive team, driving financial success and contributing to the overall vision of the company.

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Contact us to create your exclusive VP of Finance hiring strategy

Chris Holt, Managing Director

Email: chris@focustalentgroup.com

Phone: (909) 680-0632

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