Cfo Business Quotes

The very best way to know what you want is to act in the role. Not just in title, but in real action. In my career, I’ve been acting VP of HR, CFO, and VP of sales. Often CEOs resist acting in functional roles, because they worry that they lack the appropriate knowledge. This worry is precisely why you should act—to get the appropriate knowledge. Indeed, acting is really the only way to get all the knowledge that you need to make the hire, because you are looking for the right executive for your company today, not a generic executive.

people in management positions, even very senior management positions, are often completely wrong about the fortunes of their own companies. More important, in making these misjudgments, they almost always err on the side of excessive optimism. They think their businesses are in much better shape than they actually are. Jerry’s rig utilization chart at Global Marine and our own CFO’s boasts about Joe DiMaggio only underscored this lesson for me at the time. And, three decades and over 1,400 meetings with other executives later, I can say this tendency is as pronounced as ever.

1. Project What is the project? Why is it unique? Why is the business needed? Why will customers love your product? 2. Partners Who are you? Who are the partners? What are your educational backgrounds? How much experience do you all have? How are you and your partners qualified to make the project a success? 3. Financing What is the total cost of the project? How much debt and how much equity is there? Are partners investing their own money? What is the investor’s return and reward for their risk? What are the tax consequences? Who is your CFO or accounting firm? Who is responsible for investor communications? What is the investor’s exit? 4. Management Who is running your company? What is their experience? What is their track record? Have they ever failed? How does their experience relate to your industry? Do you believe this is the strongest management team you can assemble? Can you pitch them with confidence?

Recently, as I was teaching this concept, a CFO—who deals with numbers all the time—came up to me and said, “This is fascinating! I’ve always seen trust as a nice thing to have, but I never, ever, thought of it in terms of its impact on economics and speed. Now that you’ve pointed it out, I can see it everywhere I turn. “For example, we have one supplier in whom we have complete trust. Everything happens fast with this group, and the relationship hardly costs us anything to maintain. But with another supplier, we have very little trust. It takes forever to get anything done, and it costs us a lot of time and effort to support the relationship. And that’s costing us money—too much money!” This CFO was amazed when everything suddenly fell into place in his mind. Even though he was a “numbers” guy, he had not connected the dots with regard to trust. Once he saw it, everything suddenly made sense. He could immediately see how trust was affecting everything in the organization, and how robust and powerful the idea of the relationship between trust, speed, and cost was for analyzing what was happening in his business and for taking steps to significantly increase profitable growth.

Shortly before our CFO’s pep talk, another high-level executive at the bank stopped me in the hall to give me what he considered some critical advice. “A lot of smart kids like you come through the bank, and they use it for a stepping stone,” he said. “They stay for a year or two and then they leave. I think that’s a huge mistake. Look at me: I’ve been here forever and I’m happier than anyone I know. This place rewards loyalty, and I’m good at my job because I’ve got my finger right on the pulse of the company. I know everything that’s going on.” A week later, I saw two workmen hauling boxes out of his office. He was a victim of the bank’s first-ever round of layoffs. I’m not trying to put this man down for his faith in the bank or make light of his unemployment. I want to use his story to make another point about failure in business. That chat reinforced something else I was beginning to learn: people in management positions, even very senior management positions, are often completely wrong about the fortunes of their own companies. More important, in making these misjudgments, they almost always err on the side of excessive optimism. They think their businesses are in much better shape than they actually are. Jerry’s rig utilization chart at Global Marine and our own CFO’s boasts about Joe DiMaggio only underscored this lesson for me at the time. And, three decades and over 1,400 meetings with other executives later, I can say this tendency is as pronounced as ever.

The path to the CEO's office should not be through the CFO's office, and it should not be through the marketing department. It needs to be through engineering and design. ~ Elon Musk

CFO GOALS Health of company Revenue Market share Average order size Profitability Return on assets Health of Finance Order to cash cycle Accounts receivable Accurate and timely financial reporting Borrowing costs

In the absence of those predictions, product and strategy decisions are far more difficult and time-consuming. I often see this in my consulting practice. I’ve been called in many times to help a startup that feels that its engineering team “isn’t working hard enough.” When I meet with those teams, there are always improvements to be made and I recommend them, but invariably the real problem is not a lack of development talent, energy, or effort. Cycle after cycle, the team is working hard, but the business is not seeing results. Managers trained in a traditional model draw the logical conclusion: our team is not working hard, not working effectively, or not working efficiently. Thus the downward cycle begins: the product development team valiantly tries to build a product according to the specifications it is receiving from the creative or business leadership. When good results are not forthcoming, business leaders assume that any discrepancy between what was planned and what was built is the cause and try to specify the next iteration in greater detail. As the specifications get more detailed, the planning process slows down, batch size increases, and feedback is delayed. If a board of directors or CFO is involved as a stakeholder, it doesn’t take long for personnel changes to follow.

AT TRIGON I LEARNT business is all about people, so to ensure I had the first look at executive talent and could hire the best, I created my own recruitment company. I needed a temporary CFO at Emerald and was told about a recruitment consultant called Carmen Bailey. Within 10 minutes of meeting me, Carmen had asked more questions about my business and what drove and motivated me than anyone I had ever met. Carmen is a perfect example of someone who puts the client first. She is never transactional and for her it wasn’t about finding me a contractor but, rather, about wanting to form a long-term sustainable relationship with my business.

The New York Times was offered a deal with Amazon during the 1990s. It would have transformed the economics of the paper and delivered billions of dollars in revenue over time. According to former CFO Diane Baker, senior management turned it down. They were worried that they would upset Barnes & Noble, which at the time was a big advertiser. Management had nostalgia for a future with steady increases in their current business, and felt threatened by a radical shift in that future.

The tendency to focus on the positive comes long before the customer actually makes a purchase decision. Early in the sales process, for example, when sellers are trying to get to higher levels within the account, a salesperson might say, “Mr. Customer, I would like to get a few minutes with your CFO to show him how cost-effective our products are relative to increasing productivity and maximizing the return on your investment.” Sounds like a mini elevator pitch, doesn’t it? Here’s the reverse. “Mr. Customer, would it make sense to spend a few minutes and bring your CFO up to speed, so he doesn’t have a knee-jerk reaction and torpedo the idea?” In preparation for QBS training events, I always ask for a conference call to customize the material for the intended audience. But I don’t ask for a manager’s time so I can “understand their business and deliver better training.” Although these are positive benefits, they don’t necessarily create a sense of urgency. Therefore, I am more inclined to ask a vice president of sales for time on their calendar, “so we don’t completely miss the boat at the upcoming training event.” Both of these questions refer to benefits that would come from strategizing in advance. But how you ask does make a difference.

Have your CFO give you a cash report every day, like Verne’s does. The CFO should summarize the sources and amounts of cash that came in and out of the business during the last 24 hours, along with anticipated cash flow for the coming month. It keeps cash top-of-mind and allows you to react quickly — within days vs. months — if it’s heading in the wrong direction. Observing the sources of cash flowing in and out on a daily basis also gives real insight into your business’s financial model.

Those who want to blame all of Enron's woes on the greedy former CFO claim that Enron was a good business brought down by Andy Fastow. But that was never true. Ultimately, Enron was a bad business that was, for a time, propped up by Andy Fastow.

Ernest Eguasa graduated from the University of Benin with an accounting degree before continuing his education at Lagos Business School, completing their Senior Management Program. He holds multiple financial certificates as well. Mr. Eguasa has over 12 years of experience in financial management and specializes in e-commerce and e-payments for retail and pharmaceutical companies. He is a Green Belt in Lean6Sigma and the CFO for HealthPlus Limited.

Smith was even willing to be outvoted by the other OOC members. Woody Ives, the company’s talented CFO, remembers one of his proudest moments at General Cinema (Ives later left to lead a successful turnaround at Eastern Resources), when a joint venture to enter the cable business with Comcast and CBS was shot down by the board after Smith let Ives voice a dissenting opinion: “He gave me permission to publicly disagree with him in front of the Board. Very few CEOs would have done that.”5

New CFO Whenever a new CFO joins a company, one critical step is evaluating the current reporting system. The reports should be able to inform you if you are meeting your targets or not. The reports should have a list of key performance indicators (KPI) that are being tracked. It is important to ensure that the KPIs are fully inclusive, in other words, there are no KPIs that are missing. The KPIs that do exist should be relevant and should be comprehensive. It is often the case that certain KPIs are missing and could sum up the situation better than other existing KPIs do. Hence, a review of KPIs are necessary from time to time. This review may not be required every quarter but there should be a review each year, at a minimum.

imagine a modern manager who is tasked with building a new product in the context of an established company. Imagine that she goes back to her company’s chief financial officer (CFO) a year later and says, “We have failed to meet the growth targets we predicted. In fact, we have almost no new customers and no new revenue. However, we have learned an incredible amount and are on the cusp of a breakthrough new line of business. All we need is another year.” Most of the time, this would be the last report this intrapreneur would give her employer. The reason is that in general management, a failure to deliver results is due to either a failure to plan adequately or a failure to execute properly. Both are significant lapses, yet new product development in our modern economy routinely requires exactly this kind of failure on the way to greatness. In the Lean Startup movement, we have come to realize that these internal innovators are actually entrepreneurs,

VPs of Administration and Finance represent the interests of that business vertical. They are also strongly partial to the systems used by that business vertical. For example, within a medical university, they cannot be expected to also represent marketing; advancement; communications; business development; client relations; disease control; provost; faculty; student life; or other departments. Think about your enterprise: How can the person overseeing finance be impartial or well-informed across all your departments? Under many organizations' reporting structures, the CIO is expected to develop relationships with these other business verticals, but since they report to the CFO they are excluded from the very cabinet meetings where leaders congregate. Even when CIOs are invited, they are not considered of equal rank -- because they are not. Everyone views the CFO as the final authority for IT decisions, leading to some serious problems. In these organizations, finance drives strategy instead of strategy driving finance. IT is seen as a cost center and there is a perennial pressure to cut costs and reduce expenditures -- often at the detriment of strategy. Cybersecurity may be non-existent in these organizations. Setting appropriate salaries for CIOs and people reporting to the CIOs becomes impossible.

When Johnston took over as CFO, he was shocked to discover that Don Tyson personally covered millions of dollars of the company’s debt just to make banks willing to loan to the company.

Stephanie Lopes is a seasoned professional currently serving as a partner and CFO at an esteemed accounting firm. With a Bachelor's Degree in Business Management, Stephanie has cultivated a strong foundation in financial management and strategic planning.

Controller. The focus of the controller—sometimes spelled comptroller—is purely internal. His or her job is providing reliable and accurate financial reports. The controller is responsible for general accounting, financial reporting, business analysis, financial planning, asset management, and internal controls. He or she ensures that day-to-day transactions are recorded accurately and correctly. Without good, consistent data from the controller, the CFO and the treasurer can’t do their jobs. The controller is sometimes called a bean counter. It’s wise to use this term correctly; some CFOs and treasurers get annoyed when it is used to describe them, as they do not consider themselves bean counters but financial professionals.

Entrepreneurship is management. And yet, imagine a modern manager who is tasked with building a new product in the context of an established company. Imagine that she goes back to her company’s chief financial officer (CFO) a year later and says, “We have failed to meet the growth targets we predicted. In fact, we have almost no new customers and no new revenue. However, we have learned an incredible amount and are on the cusp of a breakthrough new line of business. All we need is another year.” Most of the time, this would be the last report this intrapreneur would give her employer. The reason is that in general management, a failure to deliver results is due to either a failure to plan adequately or a failure to execute properly. Both are significant lapses, yet new product development in our modern economy routinely requires exactly this kind of failure on the way to greatness. In the Lean Startup movement, we have come to realize that these internal innovators are actually entrepreneurs, too, and that entrepreneurial management can help them succeed;

The assigned activity during lunch was a getting-to-know-you game where each person had to describe their “life’s work,” and describe it in the way they would describe it to a normal, nonacademic “regular guy on the street,” is how it was explained by the university’s CFO, a man with a degree in, seriously, just “Business,” who thought it was really important that academics step out of their ivory towers and connect with nonelite, normal, salt-of-the-earth-type folks.

In the late 1990s, Parachute was the market leader with more than 50 per cent market share. Fresh from its success in taking market share in toothpaste away from Colgate using Pepsodent, HUL entered the coconut oil category to take on Marico. Dadiseth, the then chairman of HUL, had warned Mariwala to sell Marico to HUL or face dire consequences. Mariwala decided to take on the challenge. Even the capital markets believed that Marico stood no chance against the might of HUL which resulted in Marico’s price-to-earnings ratio dipping to as low as 7x, as against 13x during its listing in 1996. As part of its plans to take on Marico, HUL relaunched Nihar in 1998, acquired Cococare from Redcon and positioned both brands as price challengers to Parachute. In addition, HUL also increased advertising and promotion spends for its brands. In one quarter in FY2000, HUL’s advertising and promotional (A&P) spend on coconut oil alone was an amount which was almost equivalent to Marico’s full year A&P budget (around Rs 30 crore). As Milind Sarwate, former CFO of Marico, recalls, ‘Marico’s response was typically entrepreneurial and desi. We quickly realized that we have our key resource engine under threat. So, we re-prioritized and focused entirely on Parachute. We gave the project a war flavour. For example, the business conference on this issue saw Mariconians dressed as soldiers. The project was called operation Parachute ki Kasam. The leadership galvanized the whole team. It was exhilarating as the team realized the gravity of the situation and sprang into action. We were able to recover lost ground and turn the tables, so much so that eventually Marico acquired the aggressor brand, Nihar.’ Marico retaliated by relaunching Parachute: (a) with a new packaging; (b) with a new tag line highlighting its purity (Shuddhata ki Seal—or the seal of purity); (c) by widening its distribution; and (d) by launching an internal sales force initiative. Within twelve months, Parachute regained its lost share, thus limiting HUL’s growth. Despite several relaunches, Nihar failed against Parachute. Eventually, HUL dropped the brand Nihar off its power brand list before selling it off to Marico in 2006. Since then, Parachute has been the undisputed leader in the coconut oil category. This leadership has ensured that when one visits the hair oil section in a retail store, about 80 per cent of the shelves are occupied by Marico-branded hair oil.

David Viniar, CFO of Goldman Sachs, claimed as the global financial crisis broke in August 2007 that his bank had experienced ‘25 standard deviation events’ several days in a row. But anyone with a knowledge of statistics (a group that must be presumed to include Viniar) knows that the occurrence of several ‘25 standard-deviation events’ within a short time is impossible. What he meant to say was that the company’s risk models failed to describe what had happened. Extreme observations are generally the product of ‘off-model’ events. If you toss a coin a hundred times and all the tosses are heads, you may have encountered a once in a lifetime statistical freak; but look first for a simpler explanation. For all their superficial sophistication, the masters of the universe had no real understanding of what was going on before them.

ran—at separate times—a boutique investment banking firm and a small mortgage company. He served as the Treasurer for the multinational vitamin manufacturer USANA Health Sciences years before becoming CFO for MonaVie. Devin squeezed in two brief stints in government, including two years working for Jake Garn on the U.S. Senate Banking Committee Staff and another year working for an independent state agency called USTAR, where he helped foster technology entrepreneurship during Governor Jon Huntsman’s administration. Devin is proud to be a Ute, having graduated from the University of Utah David Eccles School of Business, which recognized him as a Distinguished Alum in 2006. He also earned an MBA at Cornell University where he ran the student newspaper, Cornell Business.

It didn’t matter that she was twenty-nine, a 4.0 graduate of the Wharton School of Business, and the youngest executive at Montgomery Industries, childish tears sprang to her eyes. She didn’t know if she was madder at her father or at her own lack of gumption. Maybe he was right. Maybe she didn’t deserve to be CFO. Maybe she wasn’t tough enough.

Just remember that a mix is good. Decider Who makes decisions for your team? Perhaps it’s the CEO, or maybe it’s just the “CEO” of this particular project. If she can’t join for the whole time, make sure she makes a couple of appearances and delegates a Decider (or two) who can be in the room at all times. Examples: CEO, founder, product manager, head of design Finance expert Who can explain where the money comes from (and where it goes)? Examples: CEO, CFO, business development manager Marketing expert Who crafts your company’s messages? Examples: CMO, marketer, PR, community manager Customer expert Who regularly talks to your customers one-on-one? Examples: researcher, sales, customer support Tech/logistics expert Who best understands what your company can build and deliver? Examples: CTO, engineer Design expert Who designs the products your company makes? Examples: designer, product manager

Consider, though, how the insight sessions, industry updates, and briefings for the CEO and CFO before the analyst calls will help meet the customer's business needs and will also link to the objective of building relationships with the CEO and CFO over the next six months; likewise, the coaching sessions and prep before the board meetings will cement the partner's relationship with the CFO even further. Meeting with the CEO and CFO before analyst calls to brief them on issues that they might need to discuss will give the partner the opportunity to provide essential information when they need it the most, creating a dependency on the partner and cementing his relationship as a trusted adviser to the company's leadership team. People are often focused on trying to get their customers to like them. I always advise my clients that it is nice if your customers like you, but essential that they need you. You want to include negotiable issues that position you to create this type of dependency.

At Corbis, looking at the reasons why we worked on too many things at once was a revealing exercise. The CFO wanted to implement a new financial system. The SVP of Global Marketing wanted to blah, blah, blah. The VP of Media Services also wanted blah, blah, blah. The head of Sales wanted blah, blah, blah, blah. And they all wanted everything now. The resulting business priorities clashed all the way down the hierarchy and that was just the business side of the house. On the engineering side, not only did we need to implement all the business requests, we also had our own internal improvements to make and maintenance work to do. Furthermore, we still had to be available to drop everything when production issues occurred—like it or not, production comes first.

Jeremy P. Feakins is a businessperson who has been at the helm of 8 special companies and holds the position of Chairman, CEO, CFO, Secretary & Treasurer at Ocean Thermal Energy Corp. and Chief Executive Officer at JPF Venture Group.

Think of the G3 as the central brain trust of a talent-first organization. (You might want to keep the general counsel or chief risk officer close on big decisions if that suits your business, but it’s the ongoing CEO-CFO-CHRO linkage that’s crucial.) Effectively deployed, the G3 is the mechanism that will create the future of your organization. It can be the multiplier of your capacity, time, and capability, as illustrated in the following example.

Entrepreneurship is management. And yet, imagine a modern manager who is tasked with building a new product in the context of an established company. Imagine that she goes back to her company’s chief financial officer (CFO) a year later and says, “We have failed to meet the growth targets we predicted. In fact, we have almost no new customers and no new revenue. However, we have learned an incredible amount and are on the cusp of a breakthrough new line of business. All we need is another year.” Most of the time, this would be the last report this intrapreneur would give her employer. The reason is that in general management, a failure to deliver results is due to either a failure to plan adequately or a failure to execute properly. Both are significant lapses, yet new product development in our modern economy routinely requires exactly this kind of failure on the way to greatness. In the Lean Startup movement, we have come to realize that these internal innovators are actually entrepreneurs, too, and that entrepreneurial management can help them succeed; this is the subject of the next chapter.

Cisco isn’t just managing a dependable if relatively flat hardware business while it hunts for growth in software and services. It’s embracing subscriptions in a broad, systemic way in order to shift from selling boxes to selling outcomes. Its new cloud-based management services help mitigate the boom-and-bust effects of new product cycles. It doesn’t have to act like a retailer chasing after make-or-break holiday sales in order to make its annual number. Today almost a third of its revenue is recurring, which is resulting (as CFO Kelly Kramer is quite happy to point out) in a short-term hit to its GAAP revenue numbers. Again, standard revenue loss is a good thing. That’s a sign that you are carrying your book of business out into the future.