In The Top Spot


As Seen in CFO Studio Magazine Q3 2015 Issue



Keith Kendall held a number of leadership positions with large companies like AT&T Capital and Hewlett-Packard Financial Services, but he had never been a CFO before joining Warren, NJ–based MonoSol Rx in 2006.The then-startup specialty pharmaceutical company developed a dissolving film the size of a postage stamp that makes it easier to deliver prescription drugs.

From the start, Kendall took on management responsibilities that went beyond the traditional financial aspects —he worked closely with then-CEO Mark Schobel to chart a course of development for the company. Over eight years, the two worked in tandem to raise more than $100 million of capital, and they spun the company off from its original parent, Monosol, LLC.

Kendall quickly came up to speed on the ins and outs of the pharmaceutical industry, and was soon asked to expand his role to lead several key functions in the business, helping to further spur Monosol Rx’s growth by expanding the customer base and shepherding new product development.

Kendall’s relationship with his CEO, and the knowledge and experience he built in the pharmaceutical industry as CFO, helped him develop the skills needed to run MonoSol Rx. In December 2014, Schobel shifted into the role of Chief Technology and Innovation Officer, and the board appointed Kendall as the company’s new CEO.

The 200-employee, privately held company doesn’t disclose revenue numbers, but it sells and licenses its products around the world, delivering more than 2 billion doses since 2008 and over 250 million doses in 2014 alone.

Background a Springboard

“As CFO at MonoSol Rx, I was a business executive who happened to lead the finance function,” Kendall explains.

Prior to joining MonoSol Rx, Kendall worked with Irv Rothman at both AT&T Capital and at HP Financial Services. (As profiled in CFO Studio Q1 2013, Rothman also rose from being a CFO— at AT&T Credit Corporation, becoming president and CEO of HP Financial Services). During his tenure at these companies, Kendall appraised the value of potential business acquisitions, completing the due diligence necessary before acquiring new assets.

Underpinning Kendall’s practical business experience is a powerful knowledge base: an undergraduate degree in accounting and economics from Saint John’s University, and an MBA from Pace University.

“I had the opportunity to form and run joint venture businesses and I ultimately had the opportunity to run large business units or segments,” he says. “The financial role affords a vantage point and influence platform, with access to investors, boards, and the rest of the C-suite that is ideal for those aspiring to business leadership roles.

“The real opportunity for CFOs seeking the chief executive role lies in the things you choose to be a part of and the experiences you build while in the financial role,” Kendall adds. “The financial role gives you a great perspective of the overall business and the performance levers in the business. You can choose to focus on keeping score and issuing backward-looking financial statements, or you can strive to understand the market dynamics that shape the company, and be part of developing and setting the strategy of the company, and be an important part of leading and managing the execution of that strategy.”

Open to New Experiences

Kendall honed his financial leadership, but more importantly, he developed broader executive leadership skills. A position with the burgeoning MonoSol Rx presented himwith the chance to lead a company, financially and strategically, from the outset.

“I was attracted to the opportunity that a startup like Monosol Rx presented, especially since I had been with startups and turnarounds before,” he recalls. “I knew the market, and I knew the operational and other business processes that would help the company to grow.”

He also saw, in then-CEO Schobel, a partner and collaborator in creating growth and success for MonoSol Rx.

“I had a seamless relationship with Mark,” he says. “It was a partnership that capitalized on complementary skills that was successful from our first days together in 2006.”

The way they collaborated drove MonoSol Rx’s culture, Kendall says, characterizing the working relationship as fluid. “We transitioned roles seamlessly as needed. From the start, we knew that as MonoSol Rx moved from a purely R&D company proving its technology to a more commercial stage with production schedules and customers to delight, the CEO’s role would be less technical and more broad business-focused.”

Healthy Tension

Working closely with Schobel gave Kendall some valuable insights about the signs of a good CFO-CEO relationship.

“In a best-case scenario, the two leaders share a view and take steps together to move the company ahead,” says Kendall. “A CFO and CEO should be collaborative and inclusive and there should be a ‘healthy tension’ between their views. This relationship is a duet where each leader has strengths and weaknesses, but the two in collaboration are able to have vision, create and set a strategy, and ensure execution. The boundaries between executive roles do not have to be bright lines.”

Because of his or her wide-ranging responsibilities, a CFO is in an ideal position to understand and influence a company, he adds.

In his new role as CEO, Kendall expects his CFO to have a broad and informed internal perspective of the company, as well as a nuanced view of the larger specialty pharmaceutical and drug-development landscape. If a CFO is spending his or her time overly focused on producing financials and score keeping without keeping sight of the business overall, that’s a mistake, Kendall believes.

“Growing companies and dealing effectively with the complex issues in the markets require attention and focus at the top, and no one person can be everywhere all the time or right all the time,” he says. “The CEO and CFO have to work together and speak as one.”

A Formula for Success

“MonoSol Rx leadership faces the same challenges presented to every pharmaceutical company, from the economy to regulatory hurdles,” Kendall says. “But our company is profitable, and we anticipate that we’ll continue to successfully move forward, propelled in part by a seamless CFO-and-CEO working relationship.”

A Formula for Success


As Seen in CFO Studio Magazine Q4 2015 Issue

By James Emmerson Chief Financial Officer, Huntington Learning Center


Your responsibilities as a chief financial officer are probably much like mine: overseeing day-to-day activities regarding accounting, budgeting, tax management, cash management, banking activities, information technology, telecommunication systems, human resources, payroll, employee benefits, legal matters, risk management, facilities, property management, and purchasing. I think of myself as a well-rounded senior financial manager, but I depend heavily on my team.

When you get to a C-level position — and even before that — it is important to surround yourself with expert business partners, either as part of your internal team or your third-party advisors.

The most important role I have, beyond making sure that the company is performing well in all of the above-noted areas, is ensuring that the strategic posture of the company is aimed at growing our targeted product lines or services so the company can achieve the financial and market-share expectations of the shareholders. That means I need data that is accurate and detailed.

In order to ensure access to the data that allows each of us to perform our role as a CFO, we need current financial and operational information. You cannot project tomorrow if you really don’t know where the company was yesterday or is today.

Hire the best staff that you can and ensure that internal controls and auditing are in place to prevent things going off course.

Managing the Team

You need to be able to sleep at night knowing processes are working as they are supposed to.

• If you are not 100 percent sure that you have the right staff, replace them. To make do instead would cost you more in the long run —much more.

• Encourage your staff to attend webinars, seminars, and conferences. There is also a tremendous amount of valuable information on new products, services, and regulations available on the Internet.

• Challenge your staff to find better, more efficient ways to improve your bottom line. Be sure to reward this behavior accordingly.

The same approach goes for third-party advisors. You need to be 100 percent sure that you are being advised on the best and latest trends in the marketplace. It is great to be loyal to those advisors with whom you may have a long relationship. But don’t be afraid to challenge them by getting competitive bids.

We all know service has a value, but don’t throw away an opportunity to improve the bottom line. Just do your homework and make sure that the lower-priced vendor is not going to cost you by providing poor service or products.

Work with your advisors on programs that will provide financial benefits to both parties if you reach or exceed predetermined milestones.

If you don’t ask for better pricing or service levels, the opportunities will not present themselves. Periodically renegotiate your leases, agreements, and contracts. You should usually end up in a better financial position.

Remember to surround yourself with the best talent available. Challenge them, but also, reward them.

The Pitfall of Precision


As Seen in CFO Studio Magazine Q4 2015 Issue

By Aldonna R. Ambler CMC, CSP, The Growth Strategist

Requiring exactitude about less-important details can kill ROI

We all understand that T’s should be crossed, I’s must be dotted, and rows and columns of numbers should reconcile exactly. But an obsession with absolute accuracy and complete perfection can destroy the ROI of an acquisition or roll-up.

SITUATION #1 Investors were expanding their company to become a multiservice one-stop shop. After two acquisitions of specialized companies, due diligence for a third dragged on for over a year, while the target’s 45 percent growth rate slowed to 25 percent. Valuation was adjusted three times. Some key employees lost confidence in the acquiring company and accepted positions elsewhere. The distraction of the onerous due diligence process increased the cost of acquisition, lost the company opportunities, and slowed integration. The acquirers lost millions as the accounting departments parsed numbers. They would have made more money if their guesstimates had been off by as much as 30 percent! It pays to gauge the pace of the industry involved. Before establishing the budget and timeline for due diligence, it pays to know how quickly a transaction must be completed to achieve the desired competitive advantage.

SITUATION # 2 An investor wanted complementary companies to provide a range of services for corporate accounts. His team ran into difficulties when multiple investors emerged, all courting the same target, but with varying approaches to due diligence, valuation, and integration. One might assume that prospective buyers from Asia, Europe, and South America would use generally accepted accounting practices (GAAP) that would yield comparable valuations. But the variations in what constituted gross profit ranged from 32 to 38 percent, a huge difference. In B2B service businesses, stable, scalable gross profit is central to success, and each prospective buyer expected the target company to invest in additional accounting to match the prospective buyer’s definitions. A fourth buyer, who was able to deal with accounting differences later, bought the target company while the other three were still focused on the definition of gross profit. It often pays to accept different (even less sophisticated) financial reports.

SITUATION #3 Same scenario — a roll-up to become a one-stop shop on a global scale. The buyer’s due diligence process was very precise regarding inventory, backlog, accounts receivable, repeat business, average order size, etc. But little attention was focused on the people. A few individuals in each of the acquired companies had large compensation packages, impressive C-level job titles, and expectations that they would retain authority over their piece of the blended company. The cost, risk, and complexity of leadership integration and/or replacement absolutely dwarfed the precise numbers that were generated about “things.”

It pays to remember the 80/20 rule. Perform due diligence that emphasizes the key factors behind success or failure. Acquisitions often involve “companies in search of a CEO,” so leadership-related due diligence matters.

Copyright 2017