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Ascending to CEO

As Seen in CFO Studio Magazine Q4 2015 Issue and CFO Studio On-Camera

ASCENDING TO CEO

INTERVIEW BY ANDREW ZEZAS

Irv Rothman, President and CEO of Hewlett-Packard Financial Services Company, in Berkeley Heights, NJ, has spent four decades in the leasing and financial services industry. A former CFO (of AT&T Capital), Mr. Rothman has been involved in virtually every organizational stage, from start-ups to turnarounds, to buying and selling companies. He’s also the author of Out-Executing the Competition, (John Wiley and Sons). Andrew Zezas, Publisher of CFO Studio magazine and host of CFO Studio On-Camera, spoke with him.

(ANDREW ZEZAS) Irv, tell me a little bit about the book. Why did you write it? Who’s going to benefit from it?

IRV ROTHMAN: I have had rather a broad and varied career, and I’ve learned a lot of lessons. I felt that sharing those lessons would be helpful to people with all kinds of aspirations — in their career and life. I am also donating the royalties to a charity called Room to Read, which is an international foundation, founded by former Microsoft executive John Wood, which promotes children’s literacy in disadvantaged countries.

You’ve gone from CFO of one impressive company to CEO for another impressive company. A lot of finance executives aspire to be CEO. How natural is that transition?

ROTHMAN: The CFO today is engaged in the creation of strategy, and in the creation of M&A work to ensure a complementary fit with that strategy. The CFO typically leads a large group of people, so there are many attributes of a CEO that a CFO is able to practice.

So, share with me how your actions differ in those two roles.

ROTHMAN: When you’re the CFO, your job is to essentially to gather all the data, and to tee up the CEO’s decision for him or her. When you’re the CEO, you’ve actually got to make the decision, and you’re not always in command of perfect information. The buck stops with the CFO if there are dramatic inaccuracies or if there’s a bad forecast, but the CEO is the guy who makes the decision.

Cast In A Different Mold

As Seen in CFO Studio Magazine Q4 2015 Issue

SCHOOLED IN CHEMICAL ENGINEERING, BURKHARD ZOLLER LEARNED TECHNICAL CONTROLLING ON THE JOB AND LIKED IT

BY JULIE BARKER

Perfectly at home discussing methacrylates and performance polymers, Burkhard Zoller, CFO for Evonik Corp. – North America, has spent 30 years with the chemical company based in Essen, Germany, starting right out of college as a plant engineer. Three decades and 11 jobs later, he is experienced at running plants and business units. He has also run finance and strategic projects, and was controller for two different business units for about seven years. All this serves him well day-to-day in his current job.

And when he scrutinizes acquisition targets, he gives them the once-over in two ways. He examines the financials and the balance sheets, as all CFOs do, but he also evaluates the firm’s technology to ensure that it’s not only capable of what the target company claims, but is also a good fit with Evonik’s extraordinarily broad portfolio of applications. Zoller, whose master’s degree is in chemical engineering, is a different type of CFO for our times. But he’s not unique in this particular regard. According to a Bank of America report titled “Evolving Role of the CFO,” 63 percent of CFOs are taking on strategic responsibility for technological advances.

For Zoller, having such a skill set is useful with the Board of Directors when presenting the reasons for a proposed acquisition. “You can only put so much information into a paper and present it to the chairman, or in our case, chairwoman. In the meeting, additional questions pop up and I’m in a good position to know about the environmental issues, about the technical issues, about the market access, about the competition, and so on. And that way, I’m very helpful in the decision-making process.”

Diverse Products and Skills

With historic roots dating from the beginning of German industrialization in the first half of the 19th century, the contemporary Evonik Industries was established in 2007 from a lineage of predecessor specialty-chemical companies. Its products, says Zoller, “are in everybody’s life.” Its chemicals are in consumer products like toothpaste and soap. Its polymers are in pill coatings for delayed release of the drug as well as taste masking and moisture protection to make pharmaceuticals more palatable and long acting. Evonik products also make spices more free-flowing and make airplane wings more lightweight.

To keep the inventions coming and to tap into megatrends, R&D is essential. “We spend more than 3 percent of our revenue on R&D,” says Zoller. “We always have projects in the innovation pipeline. Evonik has an intellectual property department here in North America because we had too many ideas to have it done in the central patent department in Germany.” As CFO, one of his focuses, he says, will be to keep money flowing to innovation.

Prior to stepping into his CFO job in 2014 — overseeing finance, tax, IT, and several service units, including energy management, for Evonik’s U.S., Canada, and Mexico operations from offices in Parsippany, NJ —Zoller had several notable shifts in responsibility and title. One of the most important was when he became vice president and controller for the Methacrylates business unit of Degussa AG (an Evonik predecessor). For the first time his job was to look at numbers and think of probabilities. “Accounting is describing what happened last year, putting it in a financial statement. But controlling is looking forward,” he says. “That’s an important part of today’s business. You can’t wait until it’s too late. You have to correct the direction the company’s going, and that’s what controlling is about.”

In that role, he also headed up strategy, and in consultation with the business unit’s head, contributed to decision-making and business development. He advised pursuing acquisition of a company that is still a major part of Evonik’s U.S. business, Evonik Cyro. The acquisition was completed in 2005. “We were on a growth path,” he says. “From then on, we grew.”The methacrylates business expanded from a largely European one to North America and Asia. “It was a very interesting time. We were touring, doing the roadshow to get the approval for this big expansion course, and we actually succeeded. When I started as the controller in that unit we had 270 million euros in revenue, and when I left seven years later, we had 1.4 billion.”

Deeply Involved

Besides his dual background in chemistry and finance, Zoller is an atypical CFO in other ways, as well. To clear his head, he might take off on a motorcycle trip for several days. In early summer, he and a friend rode touring bikes from New Jersey, where he lives, to the White Mountains of New Hampshire, and up Mount Washington for the view. “I’ve driven motorcycles all my life,” he says. “It’s my way to get a fresh mind. You can’t think of anything else when riding a motorcycle.”

One might guess there’s a bit of a risk-taker in such a personality, but he is certainly not that. Asked about the most beneficial contribution a CFO can make to his company, he says, “Keep the company out of financial trouble. That’s the core. The old traditional CFO tasks are still the most important.”

He says the most exciting part about his job is “being involved in everything. Having this broad knowledge about the company, and being able to talk to everybody in the company and outside.” Recently, he says, he enjoyed a lengthy conversation with a major tire manufacturer’s head of innovation and was able to speak knowledgeably about a green tire ingredient Evonik makes.

In July, a new Evonik innovation hub opened in Richmond, VA. “We’ll create new jobs there — and I also want to bring more manufacturing to North America. The United States has an advantage in raw material, in energy costs, and it is a steady, growing market, one of the biggest in the world,” says Zoller. “I’ll try to get more investment over here.”

Bang The Drum Softly

As Seen in CFO Studio Magazine Q4 2015 Issue

A NEW PARTNERSHIP BETWEEN A MUSIC COMPANY AND A SOFTWARE STARTUP WILL HELP KIDS ON THE AUTISM SPECTRUM BE MORE SOCIAL

BY JULIE BARKER

Glenn Turell works in an entrepreneurial environment. As CFO at Elias Arts Holdings LLC, his role includes looking at potential partnerships, mergers, and acquisitions for a company whose motto is “A more powerful way to use music.”

Turell enjoys the TV show Shark Tank, and when he attended the CFO Innovation Conference & Awards last May at MetLife Stadium, he eagerly took a seat in the audience for the “Piranha Tank” session, where angel investors would judge the viability of four business ideas being pitched.

After that session, he sought out the presenter of one particular pitch for funding, Mihai Dinulescu, and a partnership developed.

Elias, with offices in New York and Los Angeles, composes and arranges custom music for a wide variety of audio uses, including commercials, TV shows, and films, and also houses a world-class library of already prepared music and sounds available for commercial licensing. The company also creates sound identities, such as the “We Are Farmers” audio logo, or the tinkling tones that accompany Columbia Pictures’ logo at the start of that studio’s films. “I’ve always been interested in the effects of music on the brain,” says Turell. Once he and Dinulescu began talking, both of them became intrigued by the possibilities of an alliance between Elias and Sonzia, a company in its embryonic growth stage that Dinulescu and his partners incorporated in December 2014. Their initial work is helping children on the autism spectrum.

Assistive Technology

Sonzia’s core technology is low-cost, large-scale touch screens that enable children with certain sensory disabilities to access and use the digital world. “We’re a software company that happens to make hardware because no one was making it in a way that was accessible and durable,” says Dinulescu. “But we’re really a software company, and we’re trying to provide a safe environment for people to develop and learn.”

The company, which is based in Boston, is creating immersive rooms with floor-to-ceiling projections to help teach young children with autism to, for instance, dine out in a restaurant or cross the street safely.

Someone with autism may become overwhelmed or distressed by loud or sharp noises. Sonzia has therefore seen the need for sensory-friendly versions of the sounds it uses in its interfaces. “If you’re trying to teach someone to cross the street, it’s important to have sounds that signify danger, but you don’t want to make the activity terrifying,” says Dinulescu.

The creative team at Elias is now developing sounds for Sonzia that would be less disconcerting to the children. They are bringing out audio tones’ softer side—which is in fact “A more powerful way to use music.”

The companies have what Turell calls “a nice back-and-forth.” Sonzia has been working with experts at Purdue University, asking, “How could the screeching car sound be modified to be more sensory friendly?” The team at Elias then creates the sound, and it goes through a couple of iterations before, says Dinulescu, “we end up getting something that you would recognize as a car screeching but it wouldn’t be disturbing.” A balloon popping would sound more like a bubble popping.

When Dinulescu met Turell, he realized that in partnership, the two companies could expand the uses of these sounds. Sonzia will work on an SDK (software development kit) that will allow other companies to use Sonzia’s library of sounds, with accompanying visuals, to develop their own applications for people with sensory disabilities. Elias will work with Sonzia to develop the library of music and functional sounds, while also providing the library infrastructure and administration. That company is now building the separate sensory-friendly library that, for instance, video-game producers might tap into so as to expand into the demographic of gamers with autism.

Stimulating Work

Turell came back to his New York office, after his encounter with Dinulescu at the CFO Innovation Conference, excited about the many possibilities of working together. “I always thought that for a company of our stature, it would be great to participate in this field” — that is, the space where music intersects with helping people who have certain diseases. “Music has already been proven to have a positive impact on healing, but there is much more that can be done to expand the utilization of audio within the health field,” he adds. He liked the idea of using music for a higher purpose.

Others in his company, from the chairman to the creative staff and the producers, Turell says, were enthusiastic about the idea. Not only is it stimulating to be working on something different, but “all of a sudden we can do something that’s going to have a much different benefit and can directly help many, many people.”

In the first weeks after their partnership got under way, Sonzia provided a list of “experiential stimuli” they needed for their interfaces: a balloon popping, an electric razor running, cars, and sirens, among them, as well as some music and ambient sounds, like rainfall.

Sounds can be visualized on a sound file, where they exhibit sharp pulses that Elias’ team, with some training from the clinical experts, softened. In this way, the sounds would be less distressing for an autistic person to hear.

The partnership agreement has the two companies sharing development costs and revenues. At this point, the agreement is open-ended. The companies are focused on autism for the initial period, but there are various disabilities for which a sensory-friendly library could be useful. “We’re working together in continuing to build this,” says Turell. “The library will have applications not only for autism, but also for other disabilities such as Parkinson’s and possibly Down Syndrome, among others.”

The partners hope someday to see large companies recognize the need to reach people with sensory disabilities. Not only is this a growing population (the Centers for Disease Control cites studies showing that one in 68 U.S. children has an autism-spectrum disorder and that the prevalence of the disease grew 119 percent from 2000 to 2010), it is underserved in terms of available leisure activities.

Turell and Dinulescu hope that by identifying and modifying sounds that are distressing to the autism population, they will make it possible for autistic children to interact rather than retract from society and certain types of media. There may someday be major motion pictures dubbed for autistic viewers, and video games that use sensory-friendly sounds.

Says Turell: “We’re going to continue to build this partnership and explore many other opportunities to help people in the future.”