CFO Studio Magazine with Robert Falzon, CFO, Prudential

EVENTS 26 WWW.CFOSTUDIO.COM Q2 2017 EXECUTIVE DINNER SERIES INSTINCT, FLEXIBILITY, AND PATIENCE ARE THE KEYS TO MANAGING HEAD-SPINNING GROWTH W hen you’re dealing with a company that’s moving so fast you can’t even gather enough data tomake an informed decision, you need to get very comfortable with your gut, according to Anthony Conte, CFOof EPAMSystems, a global provider of product-development and software-engineering solutions.The Newtown, PA–based company has been in a state of “hypergrowth” for the past decade, having grown at an average rate of 35 percent per year over the last 10 years, saidMr. Conte. “And in some years we grew as much as 50 percent.” Mr. Conte spoke on “Re-engineering the Finance Function while Managing Hypergrowth” at an invitation-only dinner discussion attended by CFOs from Philadelphia and New Jersey–area middle market companies. The event was held recently at Morton’sThe Steakhouse in Philadelphia and is part of CFO Studio’s Executive Dinner Series. Mr. Conte explained that the term “hypergrowth” can be applied when “a company expands at an industry-exceeding rate — roughly 20-30 percent per year for an extended period of time.” In the case of EPAM, “We were a $70 million firm with a presence in five countries when we were preparing to go public 10 years ago. Today, we’re in 25 countries and generate $1.2 billion in annual revenue.” This kind of accelerated growth is “dizzying,” he admitted, “not tomention incredibly stressful.” And it creates a lot of extra work. “It basically forces us, on a regular basis, to rethink and redefine howwe do things.” On the upside, there are many ways to not only “survive” this type of environment, but to excel at it, according to Mr. Conte, who then discussed what it takes to lead the finance team at a company that is growing like a weed. Handling Hypergrowth First and foremost, advised Mr. Conte, be very, very flexible. “As a company grows in scale, routine goes out the window. You have to accept that, and get used to working without a set procedure in place.” He said this calls for a comprehensive change in approach. “As an accountant, you’re controlled and orderly, but in reality, when everything around you is moving so fast, you may need to think about different directions in which you might go to get the same result.” In addition, your decision-making skills need to become more clinical. “You have to learn to make decisions based on very little information, and without the transparency and normal financial reporting that most companies would have,” Mr. Conte said. This is particularly tough for “us finance types,” he said with a laugh. “We prefer to make decisions with as much data as we can get our hands on,” yet Mr. Conte pointed out that many of his moves are “gut reactions.” Finance executives at rapidly growing companies “need to get comfortable dealing with the repercussions” of those quick decisions. “You need to be prepared that you’re going to be wrong a high percentage of the time,” he cautioned, “because when things move too fast, things get broken.” Fix It Fast Knowing that many decisions will be a bit off the mark, Mr. Conte continued, CFOs need to acquire an ability to take risks — and clean up after themselves. “You’re making a decision, and you know there’s a good chance you’ll be wrong, but you need to go with your gut, and then scramble to fix whatever went wrong.” BUSINESS DEVELOPMENT PARTNERS LEAPS AND BOUNDS