CFO Studio Magazine, 3rd Quarter 2012
By Cindy Kraft, the CFO-Coach

You made it! You’ve landed in the CFO role of a plum company. You’ve got the corner office with a magnificent view. Now, you can finally kick back and rest on your laurels, right?

Not if you want to: a) stay in the position awhile; or b) keep your career on an upward progression. Matt Bud, chairman of the financial executives networking group (FENG), often quips, “you’re only ever between searches.” That is sage advice. The moment you adopt the mindset that your search is just some future event, you might find that you are actually only one short step away from being completely caught off guard.

Take for example the CFO at the movie producer/distributor new regency. He was terminated after three months in that role but had 13 years with the company; and he is the fourth CFO the company has had in four months. Can you do anything to ensure that you don’t meet the same fate as the new regency CFO? Not really. But there are certainly things you can do to be effective in your new role and still be prepared for a shorter-than-expected stint.

Let’s look at five proactive steps you can take to enhance your career after landing:

1 | Build trust with ALL the players. Trust is established over time, by saying what you’ll do and then actually doing it, constantly acting in a manner that is consistent with your spoken words.

So build trust with all the players, from your team, to the board, to the shareholders and/or investors, to the third parties with whom you interact, and with your customers or clients. Every person within each of those groups might hold that next great opportunity in the palm of his or her hand, so being authentically branded as a trustworthy CFO will only solidify, and add credibility to, your reputation. You are who you say you are.

2 | Make a difference. It isn’t what you do in this new role that will matter. It is how you impact and how that impact leaves the company better than when you stepped into the role.

A new credential, greater responsibility, and a bigger team are all the “what,” things you do or you have. Identifying problems and eradicating them; eliminating or mitigating risk; fixing broken processes; and slashing costs set up the “how.” Those are the tangible impacts. Value!

Being a difference-maker, a problem-solver, is key to your salary and bonus conversations in your current position, but it is oft en also key to your being hunted for that next — dream — opportunity.

3 | Be known. An old cliche reminds us that if you don’t stand for something you’ll fall for anything. There is a lot of truth in that statement, particularly when it comes to your positioning as a CFO who is “different and unique” from his or her peers.

A CFO recently asked the question: “how do I move forward now that I’ve been fired for being ethical?” Well, his first step might be to turn his strong stand for something — his high value around ethical behavior — into the foundation of his personal brand. There might be other CEOs and companies out there that don’t want his strong stand on ethics, but I would venture a guess there are also many that do.

Since strong brand positioning precedes you, whether you are walking into the office of the CEO, the boardroom, or the office of a potential new client, your visible reputation matters. So …

4 | Stay visible. The new definition of networking is: Who knows about you? It really doesn’t matter in today’s economy who you know or if you have 500+ connections on LinkedIn, unless they know about you.

Spend a few minutes deciding, in light of your three- to five-year goals, who you need to know and who needs to know about you in order to make those goals a reality. And then, work toward raising your visibility among those internal and external prospects on a regular and consistent basis.

5 | Don’t burn bridges, no matter how much you might want to. The CFO who was fired for being ethical probably can’t do much to prevent the burning of bridges. Others took care of that for him. However, when you choose to sit in the driver’s seat of your career, you have a much better opportunity to choose how best to structure your exit strategies so that you aren’t leaving burned-out bridges everywhere you’ve been.

Swallowing pride, anger, hurt, and injustice doesn’t come easily to any of us. Carrying it around is dangerous to our careers and our health. At a recent networking event, a gentleman approached me and immediately launched into his sob story about how he was a victim at his last company. Not only did he point fingers at everyone else, but his diatribe went on for 20 minutes before I tried to escape — only to be followed and subjected to another 10 minutes of his story.

Whether his feelings are justified or not, he not only burned bridges, he continues to set fire to himself and his career every single day. Do the opposite of human nature: Work through the anger, forgive, forget, and move on — because that befuddles and intrigues other people.

Congratulations on landing! Now, get busy doing the things you need to do to position yourself for that next great opportunity!

– Download the Article in PDF | Author’s CFO Studio Page

CFO Studio Magazine, 3rd Quarter 2012

By Aldonna Ambler, The Growth Strategist

Are you tempted to skip a round of strategic planning to save cash and avoid disruption during this extended period of uncertainty? If so, maybe you need to demand more from your company’s strategic planning process.

The irony is that businesses need clear strategy more during periods of uncertainty, not less. All it takes is a negative story on the evening news or a customer complaint or a whiney spouse to shake the confidence of employees, customers, or vendors. Folks around the company need to be reassured that the leaders are looking for opportunities, analyzing resources, updating the strategy, making adjustments, and are confident about the future of the company based on current information. How much momentum is your company losing when employees doubt, wonder, worry, pause, hold back, or start polishing their resumes? How about when customers decide to try a competitor? Or vendors change their terms?

If the folks all around your company are enthusiastic about your future, then convene to go straight into growth strategy mode. If there is still doubt or worry, build problem-solving processes into the strategic planning.

Often the CFO is the member of the executive team who can see the tangible evidence of unresolved problems, because it shows up so clearly in things like gross profit, capacity utilization, revenue/head, repeat business, average sale, employee turnover/recruitment costs, etc. but just hoarding cash and continuing to avoid problem solving won’t turn the situation around.

Sadly Out of Touch

A company recently brought us in because they were very excited about a new product they had launched earlier in the year. Their best customers had been extremely loyal for a long time. They were convinced that it was time to dive right into growth planning. But when we conducted our interviews with those same loyal, long-term customers, we learned that the overwhelming majority were actually annoyed, didn’t like the new product, felt taken for granted, and were quietly shopping the competition. The leaders of the company had absolutely no idea.

We offered to conduct more interviews and used control groups to make sure we hadn’t been misled. The customers didn’t want to hurt the feelings of the leaders of the company. They had become friends over the years. The customers were choosing sustained friendship over continued purchases. Wow! It sure was helpful that we insisted on some market research. The client had come close to refusing to let us do that step.

They are not alone! Perhaps your company is also making important decisions based on outdated information. If it’s a few years old, the data is pretty worthless in most industries. There have been dramatic changes in customer buying patterns due to financing, advances in technology, generational differences, and so many other factors.

Strategic Planning Solves Problems

We’ve noticed that many of the baby boomer CEOs and presidents of privately held midsized companies (particularly the family-owned ones) are still basing their strategies on the way things were when their best customers were first acquired. They’re hoarding cash, and hoarding cash is not the answer.

Other companies have a chronic recurring problem that has little to do with the economy. It is oft en referred to as the “elephant in the room.” You know, a revolving door in sales management, an outdated it department, too little repeat business, or few referrals. If one of those “elephants” defines your situation, maybe you, the CFO, would be more likely to embrace strategic planning if the process included more focused problem-solving. That way, strategic planning could actually make the business some money in the short run as well as guide the generation of improved results over the longer run.

Or your company could be experiencing telltale behavioral symptoms that would sabotage the success of just about any strategic plan. If you have a blaming culture, indecision, silos, low accountability, and room for excuses, the strategic process should address those issues to have a positive impact.

The point is, strategic planning can be done in a way that features parallel processes for updated information to guide important decisions, resolve chronic recurring problems, and/or replace self-sabotaging behavior. It’s more important to expect more from strategic planning now. This is not the time to avoid it. A real CEO seeks the input and involvement of the CFO during strategic planning…and so do real strategic consultants.

– Download the Article in PDF | Author’s CFO Studio Page

CFO Studio Magazine, 3rd Quarter 2012
By Damian Finio, Chief Financial Officer of West-Ward Pharmaceuticals

WHAT TO BRING AND WHAT TO LEAVE BEHIND

My recent career moves have taken me backwards in terms of company size and revenue, yet provided me with fantastic opportunities for design and implementation of people, processes and systems. I initiated each of these career moves. However, with larger companies continuing to reduce the size of their finance departments, it’s a trend that some of you may be forced to encounter yourself or for the people you recruit.

I benefited from sophisticated operations at AstraZeneca ($34B in revenues), transitioned to Daiichi Sankyo ($12B in revenues), and now find myself at HIKMA ($1B in revenues), wondering what knowledge and experience I should bring with me and what is better left behind.

While knowledge and experience get you the job, it is oft en this same knowledge and experience that can leave you frustrated and disappointed if you don’t adjust your expectations to your new environment. Smaller companies simply do not have the means to invest in the people, processes, and systems that their larger competitors do, yet the complexity of their business models is arguably comparable.

All of the companies where I worked are multinational firms with headquarters outside of the U.S. competing in the regulated pharmaceutical industry. Each uses SAP, has manufacturing facilities around the world, sells in multiple countries, and employs thousands of people with varying cultural backgrounds and skill sets. Yet the quality and quantity of finance staff, maturity of financial processes, and success in exploiting systems varies. There are more than likely a host of reasons why this is the case, but surely some component of this dynamic must be attributable to the size of the organization.

So, what does a finance leader bring and what is better left behind?

Tracking Talent

Regardless of an organization’s size, you can attract and retain top talent. With the same budget, you could assemble a small staff of talented individuals or a large staff of not-so-talented individuals. It’s up to you to determine which model fits best with your new organization, but in my experience, quality is more important than quantity when it comes to staff.

Although talent management may appear as something to do when/if you find the time, it is absolutely critical to regularly step away from month ends, management meetings, and so on, to assess the talent of your team. Even if you lack the support of a strong HR organization, finance managers can easily gain access to tools used to conduct robust talent management reviews. Over time, if you clearly articulate your expectations, establish competencies, set clear objectives, and take action with your high performers and lowest performers, your finance organization will improve. Talent management is an area where you are well-served bringing with you the leadership skills you honed and talent processes you implemented while managing larger teams of people. Leave behind the idea that you will have clearly defined roles and responsibilities for each individual; your organization is smaller. However, if you attract and retain the right talent, you can allow the lines to be a bit blurry.

In terms of processes, the most difficult challenge is deciding where to start. The biggest mistake you can make is trying to improve all financial processes at once. Recognize they’ll never be as robust at a small organization as what

you experienced at a large organization. Identify and prioritize improvements to be made in budgeting, purchase-to pay, and order-to-cash processes. But, rather than going after the low-hanging fruit — automating the purchase order approval process, moving more vendors on to EDI — focus on holding non-finance managers accountable for their budgets. It’s your job to ensure the budget management reports that are necessary to support them exist.

Before doing this, gauge the level of awareness around the company’s financial targets. Then review how the organization allocates expense budgets. Dissect the company’s expenses, sort out who controls what, align the management reports you distribute accordingly, and then hold people accountable for their part of the budget. Once you have the entire organization looking after the expense base for you, you can spend time bringing the day-to-day financial processes into 2012. Pay as much as you can electronically, improve payment terms with vendors, and collect and apply your cash quickly. Bring your business acumen and project-management skills with you to get the organization headed in the right direction. Avoid trying to automate the day-to-day financial processes right away. They’ve been manual for a while, so a minor delay won’t hurt.

Strengthening the System

Upgrading systems is by far the biggest challenge. You are most likely up against a constrained capital budget and an under-resourced IT department, and these are not likely to be entirely in your power to fi x. Patience is the key. Systems don’t improve overnight, but once you commit to either a new system or to improving your existing system, don’t underestimate the time and effort it takes to do it right.

To ensure that the team has a vested interest in a successful implementation, you need to be willing to offer up some of your most talented permanent staffers to work full time on the system implementation team. And, to make sure you don’t burn them out in the process, backfill, role with a full-time, competent contractor. This will enable them to focus 100 percent of their attention on the project.

Bring with you the vision gained from having worked in an organization where the systems were integrated and fine-tuned to meet the needs of the business. Leave behind the notion that improving or implementing systems is someone else’s concern — it’s yours.

When making the decision to move to a smaller organization, do what you can during the interview process to assess where the “pain” resides in the current finance department. Once determined, this will help you decide whether or not your bigger-company skills will be of value to your new, smaller organization. And, when moving from a larger organization to a smaller organization, bring with you the knowledge and experience you’ve gained over the years. After all, that’s why you were hired.

Leave behind the expectation that when you arrive you’ll find a completely talented and motivated staff, using world class systems, overseeing mature financial processes. Your new, smaller organization simply doesn’t have the same level of resources. And, in reality, what you became accustomed to at the larger organization is probably more than they need at the smaller organization.

If you move to a small organization, keep in mind that trying to perfect everything will frustrate you and drain your company’s resources unnecessarily. There’s a word for perfection in business: inefficiency. Bring with you a “fit for purpose” outlook and leave the perfectionist behind.

– Download the Article in PDF | Author’s CFO Studio Page