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But at the end of the tunnel, at the end of the road, the final
objective may not necessarily be as well defined as for a private
equity company.
Let’s talk about the role of the CFO. You’ve got three
companies that run differently. I’ve got to believe the skills
required and the expertise and role of CFO in each of those
verticals is vastly different.
Absolutely. Let’s take the role of the CFo in public compa-
nies—that’s not the easiest job, but it’s the easiest to describe.
A public company finance team has got reporting requirements,
seC requirements, heavy budget requirements, and accounting
functions. therefore, the CFo is much more focused on the
financial function than the whole body, the whole enterprise.
in a mid-cap company or a private entrepreneurial company,
the CFo has to be a jack-of-all-trades, a master of many.
A master of many?
the CFo has to rely on his own network to supplement his
own team and the company team because he’s operating in
a small environment, and it’s very much a close team environ-
ment. the finance guy has got to work with sales, marketing,
operations, logistics, and human resources. He’s working with
a team, building a team, and working on bringing a company
to the next level. there’s a financial component to all the sales
decisions and marketing decisions, and the finance guy has to
be proactive there, not only saying, “this is what we can afford
to do” or “No, you can’t do that.” He’s working with his team on
ways to do whatever it is within the company’s financial con-
straints. He has to have his fingers in every piece of the pie.
It sounds like in the privately-held and the private equity-
held companies, the finance executive is so diverse that
he or she is probably like a COO rather than a publicly-
held CFO. The focus is much narrower and probably not as
exciting.
definitely.
You’ve always demonstrated the belief that finance and
marketing should be aligned. Help me understand how that
all works.
At the end of the day, revenue is the growth driver. the
finance guy is responsible for making sure it’s profitable
revenue, but at the end of the day it’s revenue. And how do
you gain revenue? the guys on the frontline are your sales
team and your marketing team. the finance guy has got to
support that team. He’s got to be a player in there; he’s got
to understand it. i was fortunate in my career to move from
finance to marketing. And i went out on the road with my
sales guys and presented marketing and sales plans to liquor
salesmen at 8 o’clock in the morning in a little room in a
warehouse in memphis, tennessee. once you’ve done that,
you know what your guys are doing on the frontline, and that
makes you sensitive to helping them seize opportunities: “say
‘yes,’ and say ‘yes’ this way.” Also, you need to keep them within
the focus and the guidelines of the company, but make them
look like the heroes they need to be in order to drive the
bottom line and grow the company.
I’ve heard you use an analogy about skeet shooting and
sales and finance.
in an environment, a CFo is, in a lot of ways, like the armor
of the company. in skeet shooting, you’ve got your sales,
marketing, and Ceo out there with the shotguns and the rifles,
taking aim at the targets. You’ve got someone there loading
the weapons, selecting the proper ammunition. You’ve got
another team player shooting the disc, and that group has got
to function as a coordinated team so when the disc goes up,
everybody’s tracking that disc and the rifle is going to discharge,
and you’re going to hit the target. then you move on, and
you’re ready for the next opportunity. it’s a key role, but the
CFo has got to know how to shoot the gun. He’s got to know
what his team is thinking. He’s got to feed them the information
and ammunition needed to hit that target.
So the salesman and the CEO are the shooters. And the CFO
is what you called the armor, or the person who is loading
the gun with the right tools and the right ammunition.
Precisely.
What should a CFO be thinking about and doing on behalf
of his or her company, so the company can achieve success?
the core financial function or the core reporting is informa-
tion. information is power. information is only power if you
get it in the hands of the user. if the finance guy is a full
member of all the other aspects of the enterprise and is a
respected member, that means he’s earned his way up on
those teams. He’s feeding them information, and he’s seizing
opportunities.
He’s an active participant.
the CFo is helping to drive sales and making sure those
sales are profitable. He’s putting the ammunition on the
frontline. He’s in the trenches with his troops ensuring the
informational flow; and in between the investors and the
operational team—that’s how the CFo is going to be suc-
cessful. the CFo has to be a full member of the team and
drive the growth and the profitability that the team needs.
He has to be a team player.
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From left: Andrew Zezas, and Jonathan Alpert
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