Interview with Michael Corridon
Interviewer: Andrew Zezas, SIOR
Following is the transcript of a CFO Studio interview between Andrew Zezas, CEO of New Jersey based Real Estate Strategies Corporation and finance executive, Michael Corridon, CFO of Strato Inc.
Visit www.CFOstudio.com to read about this interview and to watch the entire video interview.
The Leadership Role of the CFO in a Mid-Cap Company
Zezas: Hi, this is Andrew Zezas, your host at CFO studio. I have the pleasure of being joined today by Mr. Michael Corridon, CFO of Strato Inc. Strato is a supplier of components to the railroad industry. Mr. Corridon has a very interesting background, having been a finance executive for over 15 years and an adjunct professor at Rutgers University Business School for over 12 years. Mr. Corridon is here today to talk to us about: The Leadership Role of the CFO in a Mid-Cap Company. Mr. Corridon, Mike, it’s nice to have you here on CFO studio.
Corridon: Andrew, it’s a pleasure to have you here today, thank you.
Zezas: Michael, the job market has been very unusual in the last few years. It’s seen ups and downs and its turned left and right, specifically for finance executives. In today’s marketplace with all those changes, are companies able to hire and retain the best and the brightest?
Corridon: I think so. I think it depends obviously on the company and its position. I think in our company we are trying to grow, so I think it’s a little bit easier. We provide some interesting experiences for our younger folks, not just in finance, but throughout the company, and they value that. It’s a very good place to be for a younger person, and I think that goes across any company. If you’re providing learning experiences for the best and brightest and helping them grow along with the company, I don’t think you really have to worry about retaining talent. I know we really didn’t have to.
Zezas: So Strato has had good success, and if I hear you properly, it has a lot to do with the experiences that you’re creating for the employees?
Corridon: Yes, I think so. I mean I think that’s one of the advantages of being in a mid-size company. You know when you’re younger starting out you don’t get this pigeon hold, I know that kind of worked for my career, where you get put into a lot of different areas where you may not get into in a larger company, and I think a lot of our people appreciate that. They like the opportunity to have. I mean there is no place to hide, they need to come in and do a good job, but that is a benefit to the people you want to keep. That’s who you want on your staff, people who gravitate to that.
Zezas: And as a CFO at a mid-cap company, I think you see your position being exceptionally diverse, and I think I understand you have involvement with HR and logistics?
Corridon: Yes, that’s one thing I always liked in my career, the working companies of that nature because of the involvement in different things. You know, I’m a CPA ,and obviously I know accounting pretty well, but it’s not really what I enjoy, that’s why I am not in public accounting. My first love is being in manufacturing and helping get products in the marketplace and using my finance skills to help support that.
Zezas: So with mid-market finance executives becoming more and more broad, for those who are in transition or looking to promote themselves, is it best for them given the fact that the responsibilities have become more diverse, is it better for them to promote themselves on a broad generalist kind of basis or as specialists? And how do employers react to that?
Corridon: I think, again, in the mid-size company it would be hard to come in and be a CFO as a specialist. I mean it may depend on the industry, I am sure there are industries where you need to be, but in the manufacturing and distribution environment, I really do think you need to be a generalist. And when you’re involved at all levels, at all times, at all different issues. So to just be regimented into one area I don’t think you serve the company that well. That’s my opinion, but I do believe that you need to be a successful finance executive in a mid-size company, if you aren’t maybe you don’t understand all the nuances of engineering or sales and marketing. You have to have a sensitivity to it and you have to employee it how you handle your finance job on a day to day basis.
Zezas: While I agree with you fully, and experience has proven that most CFOs now are COOs by default, interestingly enough though a lot of employers think that they should be hiring specialists?
Corridon: Well I think it kind of makes sense particularly in this job market where you can say that there are people out there looking for jobs, and I can get exactly what I want. I think that a lot of people say “let me get the guy who has done exactly what I am looking for before.” I think that is a default to the current economic time, and that may work. I think if you have a company that is looking to go public, I think you’re best suited to hiring a CFO who has gone through that process. But I think overall from an operational perspective, you want someone who yes finance may be their core, but I do think they need to have sensitivity to the other areas. As I always say “you need to always play well in the sandbox.” Especially in a mid-size company because you are in and out of each other’s pockets all the time, and if you can’t have sensitivity to what the guys in sales and marketing are going through or your engineers or operations people then I don’t see how you can be very successful for very long.
Zezas: Yes, I would agree. Now in keeping with the discussion of being diverse and playing in the sandbox, you’ve got some very dynamic components to your own background. As an adjunct professor at Rutgers at the B school, not a lot of CFOs have that on their resume. How did you land that position and how has it affected your ability to be an effective CFO?
Corridon: I was a student and got my MBA from Rutgers back in 1996. And the most fun I’ve had while I was at the school was taking this team consulting course. I had worked in mid-size companies, and I got the chance to work on a project at the time for Nabisco. This was a great exposure for me to a major Fortune 500 company, and not only was it not a finance project, it was a marketing project. So I really got out of my comfort zone, and it was a wonderful place to do it, to really stretch yourself there in an academic environment with a team and the pressure of doing this for a major company. I had wonderful team meetings, a great client, wonderful faculty advisors, and we really had a good time. It ended up being the most fun I had in graduate school and probably the best learning experience.
Corridon: So a couple of years later I was asked if I would like to try to teach it, and I did. I just took to it like a duck to water. It’s not like I’m lecturing all the time. I really run 3 or 4 student teams as they’re going through projects with either Fortune 500 companies or guys with an idea in a garage trying to launch a product. It’s a great thing to bring back to your day job because you just interfacing with different businesses and people at different levels with different business models. I think it keeps you fresh and it keeps you seeing the forest from the trees. You really look at your own business a little differently when you get to be involved in other peoples.
Zezas: And you know on one level there must be an element of reward that you’re getting personally because you’re shaping future finance and business executives. You’re imparting your knowledge to people whose minds are still open and sponge like? That must be a blast?
Corridon: Oh it is, and I love it. I love working with the students. We have some wonderfully talented and smart students at Rutgers, much smarter than when I was there. We have a great group of students, and there’s nothing better than working with them and having them come back and basically say what I said “you know what I wasn’t sure about this going in, but I really learned a lot.” And the beauty of is that I just tried to guide them, but I want them to get out of it is that they know they did this, and I just assisted.
Zezas: That is great. That’s a great philosophy. Let’s move to the topic of risk. Risk in the finance community is everything. Business is changing, industry is changing, and the economy is changing. Tell me about corporate performance factors and how they affect risk, given what is going on in the world today?
Corridon: Well I think you’ve seen it certainly since the downturn of 2007 and 2008, companies hoarding cash. I do think you’re going to see that for some quite period of time.
Zezas: You think cash hoarding will continue?
Corridon: I don’t know that it will be as bad, but I think the days of leveraging up the balance sheet especially in a mid-size company, are probably done for the foreseeable future. I think there is going to be a little bit more of risk aversion. As the economy improves I am sure it will subside somewhat, but I think it was a great lesson for companies. And I know what we went through our business dropped off dramatically in 2009. Had we not been adequate or capitalized it would have been a pretty scary time, but we were in a very strong position going in. We were able to weather the storm and, now we’ve bounced back, and now actually our revenues are higher than they’ve ever been. We did our first acquisition last last year. And I think that is the lesson to take from it. I think the days of modeling your business on an excel spreadsheet and saying how wonderful things can be is fine, but you better have the cash behind in case it just doesn’t go quite as well as planned.
Zezas: I think you’re right, I think you’re right. So staying with risk, how is risk affecting decision making?
Corridon: Well again I think that’s where it’s at. You try to stay more to your knitting and what you know. I know we approach our business that way. Even though we’ve done an acquisition, and we’ve thought about it, and it fits in nicely to what we do and what our skills set is, I still think a lot of companies are going to be looking more carefully at things like that. Maybe they won’t be willing to take the risk on something new that they might have taken 5 or 6 years. And not that they may not take it again 5 or 6 years from now, but I think right now in this near term, I do believe a lot of companies are going to continue to be conservative in how they manage they leverage.
Zezas: Is that because there is greater risk in business now than there was 10 years ago?
Corridon: That’s an interesting question. It’s easy to say “oh my god this is why I have all this grey hair because of all the risks, all my predecessors didn’t have this,” but I think that’s a little bit of a cop out. I think there’s always risk in business. It may be a little tougher now, but on the other hand it may be a little easier. I think there’s so much more supply in the world and opportunities to sort products differently. Things people necessarily didn’t have 10 years ago. So it may be different, but business is business. I don’t think it has changed all that traumatically on a fundamental level.
Zezas: I think there are a lot of bright people who would agree with you. Michael, we are almost out of time. I am actually curious from a personal perspective to know a little bit more about you. You’ve got a very dynamic background. I understand you’re an avid reader, what’s on your nightstand these days?
Corridon: Well, that’s an interesting question. It’s probably not a book you would expect a guy like me to read, especially since I am not a musician, but I am a great music lover. I just got a book, and I am excited to read it. It’s about a gentleman with the name of Nikki Hopkins who is a session musician in England in the 1960’s. He played with every band you ever heard of. He’s a very interesting guy to read about.
Zezas: It’s about his life story and biography?
Corridon: Yes, who he played with and his different stories like hanging out with the Rolling Stones, and the Beatles, and the WHO.
Zezas: So you’re not reading thick finance strategy textbooks?
Corridon: Well, no.
Zezas: I appreciate that Michael. Listen this has been great, I appreciate your views. I want to thank you for being here on CFO studio, and I hope we’ll have an opportunity to see you again.
Corridon: It was an absolutely pleasure, thank you for having me.
Zezas: It’s great seeing you.
Corridon: Thank you.
Zezas: This is Andrew Zezas of CFO Studio with Michael Corridon of Strato, saying thank you very much for watching. We’ll see you again.
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