Navigating the Evolving World of CFO Leadership with Dan Ellis of Townsend Search Group

For Townsend Search Group, executive search is a highly personalized process—one that requires looking at the market, the competitor environment, and the culture of the client’s organization, and then drawing up a tailored strategy for them. The goal isn’t just to find candidates. Rather, Townsend aims to place change-making leaders that fulfill long-term goals, influence strategic plans, and impact decision making across client organizations.

In this episode of The Modern CFO,​​ Dan Ellis, Managing Director at Townsend Search Group, dives into the challenges, strategies, and invaluable lessons for aspiring CFOs and those seeking effective financial leadership. With over a decade’s experience in public accounting and consulting, Dan Explores the diverse personalities, drive, and discipline that define these financial leaders. From the vital role of athletics in shaping their work ethic to the crucial balance between work and personal life, gain valuable insights into what it takes to excel in the competitive world of CFOs.

Show Links

• Check out Townsend Search Group
• Follow Townsend Search Group on LinkedIn
• Connect with Dan Ellis on LinkedIn
• Connect with Andrew Seski on LinkedIn

Transcript
Please note that the transcript is AI-generated and may contain errors. The content in the podcast is not intended as investment advice, and is meant for informational and entertainment purposes only.

[00:00:00] Andrew Seski: Hello, everyone. Welcome back to another exciting episode of The Modern CFO Podcast. As always, I'm your host, Andrew Seski. Today, we're joined by Dan Ellis, managing director of Townsend Search Group, a search group based in Michigan, my home state. And for just over a decade, Dan shared his career experience in public accounting and consulting and today is connecting private equity groups or portfolio companies with the best talent there is. Dan, thank you so much for joining us today.

[00:00:35] Dan Ellis: Andrew, thank you. Happy to be here and excited to chat about some topics about the modern CFO.

[00:00:43] Andrew Seski: So one of the reasons I'm so excited that you're on the podcast is that we get all of these incredible insights from CFOs in their fields. And while they're all diverse, I think your perspective should be really unique and valuable to them. It's a somewhat opaque world and I know that market dynamics have severely shifted in the last few years and even last few months. Before we dive into the whole world of CFO placements and Townsend as a search group, I'd love to go back in time and learn a little bit about how you initially became interested in accounting and maybe even earlier days outside of undergrad.

[00:01:20] Dan Ellis: Yeah, sure. I appreciate that. I grew up in an entrepreneurial family. My father and grandfather purchased a manufacturing company that they grew and successfully operated. So I always wanted to be a business owner and I saw accounting as a path into that. So went to Western Michigan University, got my accounting degree. After that, spent eight years in public accounting and consulting as a CPA. Towards the tail end of that, I got into M&A advisory, due diligence, transaction support. And really liked that environment, but didn't see myself being a partner in a public accounting firm. I wanted to do something more entrepreneurial where you could eat what you kill. And so I was introduced to my colleague and partner Peter Bridges at Townsend Search Group. And just came into the executive search and recruiting world with a network previously in private equity and consulting and was able to learn the operations and the process of executive recruiting and eventually become very good at executing searches, which ultimately led into more to business development and opportunities like this to meet you. 

[00:02:31] So our specialty at Townsend has really become working with middle-market companies, lower middle-market companies that are privately owned, most often private equity sponsored. So we do a lot of work in the private equity community, not only at the firm level or within the funds and working with the investment teams, the operating teams. We spend a significant amount of our time working within the portfolio companies, placing accounting, finance, operational executives, and leaders. So I think today, we'll spend most of the time on CFOs. And just to set the context, a lot of our focus is in the middle market with privately owned businesses. 

[00:03:13] Andrew Seski: Yeah, that's really helpful. Thanks for that. Yeah, I think in my mind when you're going out and engaging with a search firm maybe for the first time, you may have some hesitations and I'm curious as to when and how maybe CFO should begin the process of engaging with the search firm. I feel like the marketplace, maybe the tenure has shortened a bit in a typical amount of turnover in the C-suite in general right now. I'm curious as to when it would be most strategic to engage with search firms, understand the marketplace better, or if you should essentially always have a good pulse on the market.

[00:03:51] Dan Ellis: I think it's always important to have a good pulse on the market. And this comes into a little bit of how do you develop into a CFO. And I think earlier in a career as a candidate, as an aspiring CFO, being in contact with the recruiter can really help you be more strategic with developing your skill set to be a CFO. So we can understand your background and experiences and where you want to get and try to align your interests with companies or CFOs that are looking to hire someone in those functional areas. So making sure that you're deliberate and strategic with your career development is something that a recruiter can help counsel or advise. We can give you data points on what the market holds in terms of compensation and really just help make sure that you're aware of what's out there in the market. 

[00:04:45] Now, if you're a sitting CFO and you're building a team, being in contact with us is very valuable because we're constantly in the market talking with folks. We know what they're making. We know what they're looking for. If we can understand the vision that a CFO is trying to drive in a business, the strategy they're trying to execute, we can find candidates or we may know candidates that align with that strategy and that vision, and therefore it creates a win-win in the fact that we're getting the candidate the technical and the experiences that they need to develop their skillset to be a CFO, but we're also helping that sitting CFO build out their team and drive what they're looking for. So hopefully, that's helpful. 

[00:05:34] Andrew Seski: Definitely. I mean, so you've been with Townsend for about a decade now. And the world has changed a lot and we've been through a number of economic market cycles and then the last few years have been extremely interesting. I'm curious as to how that impacts — maybe equity becomes more important in a cash-restricted business that needs to ramp up and scale. I'm curious what a search firm market environment is, like what the cycles are in the marketplace for you, maybe what the lag is, and then what it is like in our curre...