Audrey Wells Q&A: Making a Difference


CFO Studio Magazine, 1st Quarter 2012
Interview by Andrew Zezas

 CFO Audrey Wells provides insights into the world of not-for-profit organizations.

AUDREY WELLS IS CFO OF FAMILY SERVICE of Morris County in New Jersey. The nonprofit organization has a very specific mission: to strengthen the community by empowering individuals and families to meet and overcome life’s challenges. Wells recently appeared in a CFO Studio interview hosted by Andrew Zezas.


Tell me about Family Service of Morris County.

Wells: We’re about a $3.2 million organization with about 90 employees. We’re located in Morris

County and do services for the most part in Morris County, although we do go outside the county on occasion. We concentrate on four areas of impact. The first is giving children the best start in life. The second is keeping seniors independent and in their homes. The third is maintaining healthy families, and the fourth is preventing substance abuse.


There are many in the for-profit world who would suggest that not-for-profit isn’t really about business, it’s about other things, and that not-for-profits should run themselves more like for-profit organizations. How do you respond to that?

Wells: I totally agree with that assessment. But, a lot of not-for-profit organizations, and I’d like to think that ours is one of those, already run like a corporation to a certain extent. There are many, many things that we can learn from what corporations do well while still keeping the different sort of atmosphere that you have in a not-for-profit organization. A not-for-profit organization usually has a very passionate workforce, very mission-driven, maybe a little more laid-back than a corporation, but there are certain things that you can definitely carry over from the corporate world.

For example, streamlining procedures – you know… touch each thing once and move it along, don’t do things that aren’t necessary. Another would be in the area of technology. We should be making better use of technology to make our jobs more efficient, to be able to collect data more efficiently, analyze and report more efficiently. A third example is doing complete financial analysis. You’d be surprised how many organizations really haven’t figured out how to analyze their programs separately – figure out where their actual revenues are going and how they’re being used. We may not do the same thing with the analyses that a for-profit corporation would do, but it’s really important to know where your dollars are going and at least have a basis for making good decisions.

There is really a primary difference between how a for-profit and a not-for-profit views its ultimate objective. A for-profit’s job is to maximize revenue, minimize expenses and return as much back to the shareholders as it can. But I’ve heard you say that from a not-for-profit perspective, you have a different focus and that you focus on revenue and expense differently.

Wells:  Given the same revenue stream that you would have in a for-profit corporation, we focus on maximizing the efficient use of the limited resources we have. Obviously, this is an oversimplification, but we try to use every bit to provide services to the end users, our clients, and they are the ultimate stakeholders.

We’re not necessarily working for a bottom-line profit.


The economy’s been pretty funky in the last few years, as we all know. How has that affected funding sources, revenue in your case – have they increased, have they been static or are they declining? And how do you deal with that?

Wells: We’ve been pretty lucky. Even during this time, we’ve actually grown a little bit. But, the mix of our revenues has changed. We have noticed that private donations have declined somewhat. We’re lucky we have a pretty loyal donor base, but even so, we’ve definitely noticed a slippage there. It’s harder to meet our goals. Foundation giving has definitely declined. And, a lot of foundations are now putting a bit more stipulation on the money. For example, they might say that this funding is only for startup; after this, you have to go find alternate means of funding the same program. So, it’s been a little more difficult to bring in revenue that way. We found that we have to place a bit more reliance on fee-for-service programs to supplement any kind of grants or contracts that we have.


You talked about how certain organizations are placing collars around their funding, and giving you more descriptions. Are they also looking to measure how that funding is being spent and measure the results?

Wells: Absolutely. That’s actually a huge area right now where not-for-profits have to come up to speed. A lot of the funders these days – government organizations and private and corporate foundations – are looking for impact-based programs. It’s one thing to say that you saw this many pre-schoolers and helped them get ready for kindergarten, but funders are much more likely to give you continued funding if you can show that your contact with these children actually made a difference. So, they’re really looking for a measurable impact on the community.

And, organizations that can come up with the best ways to measure that are the ones that are most likely to get funded.


I’ve got to imagine that you’re looking at the expense side. Have expenses risen, have they been declining – and how are you getting in control of those?

Wells: Like any good for-profit organization, we at Family Service also have done an analysis of our expenses and seen how we can keep them in check. Since more than 80% of our expenses are payroll and payroll-related expenses, it’s been somewhat of a challenge. What we have done is we have streamlined certain positions and combined certain positions. But we’re really doing the best that we can to keep our good employees and make sure that they can continue to deliver the services to the clients. So, to that end, we’ve had to be a little creative with the way we staff certain things.


Let’s talk about the role of the CFO, specifically. Not-for-profit, for-profit – is the role very different when the CFO is performing services for not-for-profit versus a for-profit organization?

Wells:  In general, the mechanics of the job are the same. If you’re working for a for-profit corporation, you’re looking to maximize profits, obviously. If you’re working for a not-for-profit, you’re seeing it from a slightly different angle. There’s more of a personal feel for clients, programs and things like that. The job

is the same, but there’s just more of a personal self-fulfillment working for a not-for-profit – feeling like your actions are actually helping end users.


I would imagine, too, that you’re measuring success differently in a not-for-profit: Did we deliver the service? How well did we deliver the service? And can we continue to deliver the service?

Wells: Correct.


Is that different from the perspective of a large versus a small company?

Wells: I think, in general, between a large and a small company, whether it’s a for-profit or not-for-profit, it’s very similar. But in a smaller company, the job is much more hands-on, simply because there are fewer staff members to do some of the day-to-day functions. A CFO in a smaller organization will find himself or herself doing things like bank records and even possibly cutting checks. I think that the job of the CFO in a smaller organization also is a little bit broader. Again, there just aren’t as many staff members. For example, my job not only encompasses finance and accounting but also information technology, human resources and facilities management.


How closely do the CFO and CEO align in not-for-profits or for-profits?

Wells: I think that for most issues in any kind of organization, the CEO and the CFO need to be involved – maybe one more from a strategic perspective, one more from a financial perspective – but certainly they need to work closely together. It’s nice to bounce ideas off one another, and it also helps sometimes if the two don’t necessarily have the same perspective on everything. For example, if one is a bit more big picture and the other is a little bit more detailed. Certainly, you might get the best of both perspectives that way when you work together.

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CFOs Turned CEOs Provide Savvy Career Advice


CFO Studio Magazine, 1st Quarter 2012

CFOs who aspire to move up the career ladder must think strategically – and be engaged in reinventing their companies.

THE CHIEF FINANCIAL OFFICER, especially in smaller organizations, likely has his or her hand in daily accounting duties, quarterly analysis and annual reporting. The CFO often heads up audits and takes the financial lead on mergers, acquisitions and other similar endeavors. However, not every CFO has the vision – or even the interest – in going beyond the call of financial duty.

Those CFOs with the desire and drive to exceed expectations in their respective companies must think and act like other more advanced C-Level executives in the firm. They must become a proactive voice when it comes to day-to-day business functions, as well as promote growth strategies that aim to take the company to the next level. When done successfully, the CFO can – and often will – move up the next rung of the ladder.

As four CFOs turned CEOs can attest, there is a huge difference between a number-crunching, calculator-clutching accountant and a strategic-thinking operations executive. The executive must be able to strike a balance between where the company has been and where it’s headed.

AT AST, MICHAEL ELDREDGE wears many hats. Officially, he is the chairman of the board, executive vice president, COO, CFO and even enjoys his self-appointed role as secretary of the board of directors. However, Eldredge is quick to say that titles are meaningless.

“As a company executive, especially one with a financial role, you must engage yourself with the business,” Eldredge advises. “Don’t just be a financial reporter, but become a member of the entrepreneurial group. Become the leader that helps drive the car instead of being the passenger who sits in the back reading the map. The terms ‘passive‘ and ‘CEO‘ don’t mix. Be proactive when it comes to helping to grow your company.”

Prior to AST, Eldredge was the vice president of finance/CFO at Townley Inc., a manufacturer and distributor of consumer products. Prior to that, he served as corporate controller of Measurement Specialties Inc., a developer and manufacturer of consumer and industrial electronic devices. He was chosen as CFO of the Year by the New Jersey Technology Council and as CFO of the Year finalist for 2011 by NJBiz.

While he is a lot of things to a lot of people, Eldredge isn’t a certified public accountant. By choice.

Though he graduated from Rutgers University with a degree in finance and accounting, Eldredge knew he wanted to be something more than a number cruncher. He got his chance in 1997 when he and two partners launched AST. They got first round funding and hit the ground running. Eldredge brought the financial brains to the business while his colleagues served as president/chief technologist and sales and marketing experts.

“We ran this company as a public company from the start. We looked at the way business was being run and put in place an organizational structure that allowed us to hold and build market position,” Eldredge says. “We have always searched for and hired great talent – making sure that everyone on our team has the global best interest of the company at heart. That’s the secret of our success. Treat people fairly, like family. They will grow and blossom, and so will your company.”

SOMETIMES IT’S FUNNY HOW things happen to go your way. Call it serendipity, perhaps, but when opportunity knocks, only a fool fails to open the door.

Ron Gaboury had been working as a consultant for a CPA firm prior to doing consulting for York Telecom – putting financial systems in place and working on government contract proposals for two years. It was labor-intensive, nose-to- the-grindstone financial work.

York was a $4 million company at the time with less than 30 people on staff. It was all-hands-on-deck, mostly in-house, as Gaboury recalls, until they landed a $19 million contract for video conferencing work from the U.S. government.

All of a sudden, York Telecom needed a CFO, and Gaboury was in the right place at the right time. He joined the company full-time as CFO in 1995; two other executives were in charge of technology and sales, and the company was led by its founder Dr. York Wang. He explains that York Telecom was typical of many technology companies: the techies had less of a business perspective on things and thought more about developing and selling the greatest new thing on the market.

After Gaboury joined York, the company started growing quickly. In fact, within a few years, value jumped to $18 million. The company fully organized and brought in a full management team.

He became president and COO in 1999 and, under his guidance, Gaboury made its first acquisition in 2000, with another following quickly a year later. Through M&A and other growth, the company moved to expand its sales team, broke into the enterprise market and started to attract Fortune 100 companies as clients. Disney, Amgen, Novartis, Google, BMS and CitiGroup were among them.

In March 2011, Gaboury replaced himself by hiring David Phillips as president and COO. Now, as CEO, he is busier than ever, keeping an eye on new acquisition opportunities all the time.

“For CFOs to succeed,“ he says, “they need to know what the company does, how the company does it and the company’s strategy for growth – not only how much it costs to do business or how to save money. If you are the kind of financial person who can sit in the room with a bunch of financial people holding calculators and be the one guy who is three pages ahead waiting for the others to catch up, you may have the ability to be in the top spot.”
DAVE MUDRICK KNOWS THAT opportunity comes when you least expect it. However, he observes that it has little to do with luck and much more to do with drive, dedication and a whole lot of desire.

Mudrick joined Topcon America in 1993 as a financial analyst. He had wanted to work at an international company and was willing to work hard to get ahead. He took on a junior position with vigor, understanding that for several years it would likely keep him in the back office performing day-to-day financial work. But that was fine with Mudrick. He was working on mergers and acquisitions at an international company, gaining more experience every day. He played an integral part in forging two major deals.

Though smart and eager, Mudrick was young. In the eyes of Topcon’s traditional Japanese management, age was a critical component of success. The junior employees were required to “know their place,” Mudrick says, noting, “If you were junior, you were junior. There was only a certain amount of exposure a young guy would get to the inner sanctum.”

Regardless of past history, the executives in Japan clearly had their eyes on Mudrick. Hard work was paying off. By 1999, he was the No. 2 guy in the company’s U.S. financial operations and was offered the CFO position when the then-CFO left. “I knew I was young, but I also knew I was ready. The company executives told me I was the logical choice and that it was my time,” he says.

Mudrick took on the role with gusto. He led a proposal to reorganize U.S. operations to reduce redundancy. Topcon America became a holding company with three subsidiaries, and Mudrick took the position of CFO at the holding company.

The companies run independently, but the reorganization eliminated triplicate services; there is now one administrative strategy that includes finance, HR, legal and more. Banking relationships are managed at the holding company level, and all 1,100 employees share one 401K plan, for example.

Mudrick was more than content in his new role. He loved working at Topcon and never really gave thought to the idea of rising up through the ranks any further than CFO. But, once again, the Japanese executives had other plans. When the then president of U.S. operations was called back to headquarters in 2006, Mudrick was chosen, out of four candidates, to be the next president and CEO of Topcon America.

“Topcon is truly an international company,” he says. “Whoever has the right stuff can and will get ahead. It’s about performance, commitment to the company and work ethic. I live that and instill that in my team each and every day.”

JAMES HUGHES CAN’T BELIEVE there are many kids who offer up “accountant” when asked what they want to be when they grow up. Certainly, accountant wasn’t his life’s calling. However, when Hughes headed off to college, he didn’t want to pursue the sciences and believed a general business degree was much too broad. “The universal language is numbers, so I figured an accounting degree would serve me well, no matter which avenue I selected,” he says.

So, armed with his undergrad degree in accounting in 1980, he took an assistant controller position at a small manufacturing company making a whopping $12K a year.

That’s when he realized he needed to get serious about a career path. A few years later, MBA in finance in hand, he secured a job at Pete Marwick, now KPMG, as an auditor. As luck would have it, he started working with financial institutions from the start.

“At the time, if you joined a firm like that, they put you into healthcare or manufacturing. So, while I was assigned to financial services, it turned out to be the best thing that could have happened because most of my clients were banks. By doing audits, I learned how the industry worked and came to understand the risks.”

He also met the right people. One of his “clients” was United Jersey Bank (UJB). When it offered him the position as CFO of UJB Financial’s mortgage division in 1989, he jumped at the chance to get out of the back office.

In the 1990s, when news of bank mergers were a dime a dozen, Hughes found himself cruising up his career ladder. After 11 years at UJB serving in various organizational roles, he moved on to Summit Bank Corp. in 2000, after Summit bought UJB. As senior vice president running the bank’s accounting division, he was well-positioned and happy with his success.

However, market forces stepped in once again. This time, Fleet purchased some of Summit’s holdings, and Hughes knew he would be relocated – not something he wanted for himself or his family. That’s when another KPMG client, Unity Bank, offered him the opportunity to be CFO at a community bank. “I wanted to try being a big fish in a small pond,” he recalls.

Three years later, in 2003, Unity’s existing CEO/president retired, and Hughes advanced to the top spot. “It’s an old adage, but your social IQ is more valuable than anything else,” he explains. “I’ve worked very hard to make my management style really count. I sit down with my direct reports every week.

We discuss strategy about what we need to get done. I foster an environment where everyone is working toward the good of the organization. I’m looking for overachievers, morale builders and people with great attitude. And I’m always aware of where I’ve been and how I got here.”


Some financial executives, in love with numbers and forecasting, are happy to keep their eyes on the prize – annual reports and the like. Others have their sites set on the corner office. Experts who have been there, done that and succeeded on moving from CFO to the top spot in their organization say the key to success is to get out of your office and talk to others in the organization. Find out how you can help them be more successful – and the answer may very well stop at your very desk.

It may feel like the only way to get ahead is to interact with the higher-ups, but the truth is that it is critically important to manage relationships at all levels of the organization.

Bottom line: For a CFO to stay relevant and grow profitably – both personally and professionally — he or she needs to be a part of reinventing the company at all times. Stay on top of the market. Watch the competition. Follow the economy. And, never take your eye off your crystal ball.

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Do the Math: Upgrading to LED Lighting Can Save on Energy and Maintenance Costs


CFO Studio Magazine, 1st Quarter 2012
By Michael Schratz, Director of Marketing, and John Krauter, Vice President, Finance

Switching to LED lighting can result in a payback of two years or less.

INSTALLING ENERGY-EFFICIENT LIGHTING is one of the most effective and efficient upgrades a facility can implement to save time, money and energy as well as improve overall productivity, sustainability, safety and security. As the most efficient lighting solution available, light-emitting diode

(LED) lighting technology produces immediate and quantifiable results from day one.

While some may question whether such a technology investment will provide real savings and a quick ROI, the fact is that switching to LED lighting can result in a payback of two years or less. With technology that is typically warranted for five years, and most often lasts 10 or more, it is no surprise that making the switch to LED can deliver fast and significant ROI.

Qualities of LED Lighting Technology

  • Long-life, energy-efficient lighting technology
  • Significantly reduces maintenance
  • Operates efficiently in extreme temperatures
  • Clean technology that reduces carbon emissions
  • No mercury or hazardous material
Superior Power Efficiency = Lower Energy Costs

LED lighting consumes much less power than traditional incandescent, metal halide or mercury vapor lights, with superior energy efficiency that can slash energy consumption by as much as 50% in virtually any application. In states where the energy rate is quite high, such as in New Jersey, New York and other areas, this energy savings can have a dramatic impact on bottom-line performance.

For example, at Arkansas Rockline Industries, a major supplier of private label wet wipe products to Walmart, a one-to-one replacement of metal halide fixtures with LED high bay lighting cut the operational and energy costs of the lights by some $75,000 per year to just $25,000. And, because LED lights produce much less heat, the facility also noted a 20-ton reduction in its air-conditioning demand, further reducing energy costs.

A correctional facility in the state of Oregon reported a significant drop in its energy consumption — to the tune of $140,000 in annual savings — by converting to high-efficiency LED lighting.

Meanwhile, a building products provider in Connecticut shaved more than $5,500 a year from its energy bill, thanks to LED lighting.

Longer Life Reduces Maintenance Costs

While often considered an unavoidable expenditure, the actual dollars spent maintaining traditional lighting can be substantial, whether using a maintenance department or an outside electrical firm. Simple bulb changes often demand the use of a scissor lift, a halt in production and other costly inefficiencies. Equipment costs alone can easily double a maintenance bill. In some applications, reaching the fixtures to replace a lamp may be a significant hazard and require massive effort.

LED fixtures eliminate these headaches and can bring the cost of lighting maintenance down to virtually zero. With their exceptionally long-life performance, the best LED systems today can provide at least a decade of worry-free, high-quality lighting that delivers significant savings.

Since switching to LED fixtures, a natural gas transmission and treatment operator in Colorado has saved $4,800 a year in bulb expenses alone, plus another $57,500 in labor, for a grand total of more than $60,000 in annual direct maintenance savings. At Rockline’s facility, the elimination of bulb changes has saved the company at least $5,000 a year, not including the cost of lift rental to reach the fixture mounting height.

The savings are also significant at power generation and other facilities with towers or stacks, like the Mount Bethel PPL generation facility in Bangor, PA. Here, the company saved about $12,000 in maintenance costs by converting its six Xenon stack beacon lights to LED beacons. And, because the LED products will last much longer, the company also reduced its risk of costly FAA fines levied as a result of burned-out bulbs.

Rebates and Incentives

In addition to the inherent energy and maintenance costs realized by switching to LED, the U.S. Department of Energy (DOE) has implemented various rebate and incentive programs to significantly reduce the upfront cost of upgrades and shorten payback periods. The amount of funding available has increased in the last year, leaving facility managers with great opportunities to move forward on projects, even when little capital is available. LED lighting often falls under a custom rebate program dependent on kWh saved annually, and ranges from 30%-100% of investment cost provided back to the customer.

The building products manufacturer in Connecticut took advantage of a $30,000 rebate from Connecticut Light & Power that, combined with energy and maintenance savings, generated a 1.5 year payback on its LED conversion. And, Rockline garnered a $48,000 rebate from its power supplier, American Electric Power’s Southwestern Electric Power Company.

The Bottom Line

For its energy efficiency, maintenance savings and overall lower total cost of ownership — not to mention attractive rebates and incentives — LED technology has already been recognized by the industrial lighting world as the undisputed successor to antiquated conventional lighting systems. With numerous products for a wide range of applications now commercially available from a number of reputable manufacturers, many companies worldwide have already started to realize the benefits of LED technology and have become more proactive in its adoption.

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