September Views from Banff
(Originally released September 2022)
We hope everyone is well. September is flying by and there is a great deal going on out there. Here’s what we are hearing in the market.
Market Dynamics
Size matters: Earlier-stage companies are focused on survival. Later-stage companies are focused on profitability. Public companies are staffing up M&A/corporate development teams.
Biotech: IPOs are no longer the answer. More CBO (Chief Business Officer) than CFO hiring going on. CEOs who can be strong on strategy and execution are critical - especially those with M&A experience.
Tech/Software: 2008-2021 it was all about growth, now it is about adapting quickly. Hiring levels are actually consistent with the highs of 2021, especially go-to-market talent and COO/platform/engineering. General Counsel and CFO hiring have slowed.
The boardroom: Board hires are more hands-on and need more operating experience, given many first-time CEOs. CEO churn at PE companies is now at 58% in the first two years. - Comments from the Hunt Scanlon VC/PE Conference in September 2022.
CFO Focus
Newbies: “This year has been record-breaking in terms of the percentage of newly appointed CFOs who are first-time CFOs”. 79% of new CFOs so far in 2022 are in the role for the first time; just two years ago, that was only 49%. This is largely due to the vast numbers of CFOs who have retired from full-time operating roles - while at the same time, the nearly 1,000 IPOs that happened last year (in the US) contributed to a constraint on the supply of experienced CFOs who were available. - Managing Director at Russell Reynolds Associates
CFO ≠ CEO: CFO transitions to CEO are still relatively rare. Russell Reynolds’ analysis of S&P 500 CEOs shows that fewer than 20% of CEOs transitioned from or previously held a CFO role.
Looking inside: “Almost 80% of newly-minted women CFOs in 2021 were internal appointments, as many companies have turned inwards to develop and promote women in finance,” from a search consultant.
Closing the Deal
CEO offers: Cash is being tied to fundraising milestones.
The closer?: “Candidates are flocking to profitability and sustainability” and “it's getting tougher closing candidates. Firms aren't willing to pay up like they have been and candidates aren't willing to take a risk like they have been.”
Research
An excerpt from CEO Excellence (shoutout to our friend Carolyn Dewar): “2000 through 2019, the average CEO tenure in the United States decreased from ten years to less than seven.”
The way to the top: Interesting MIT Study that reviewed 40 years of data on executives and the advancement of women in the largest U.S. corporations. “Not one woman held any of the top 1,000 jobs in 1980”.
Things That Caught Our Attention
On focus: “We’ve passed the age of the information economy, we’re now in the attention economy.”
On being you: “Authenticity is your cultural currency. The moment your audience can no longer see your original pursuit, they partner with someone else.”
On economics: “Your only currency in life is your friends and family. Nothing else matters.”
On leadership: “Vision without action is merely a dream.”
The Past Weeks at Banff
We just held the first of our fall dinner series in NYC, with more to come in DC, San Francisco, and back in NYC again. As always, we had an amazing time and it was an incredible opportunity to bring unique leaders together in an intimate, open, and curious environment. Top topics: climate, hybrid/remote/office, leadership in turbulent markets. Overall mood: optimistic about having the chance to have an impact.
We look forward to growing, learning, and continuing our partnership with each of you.
Have a great week,
The Banff Team
