CFO Study Findings: Roadmap to becoming lean & strategic

Confidential and Proprietary to DS&H 1June 2011 www.dusaulthaddad.com

CFOs: Pathways to become lean & strategic… Seeing clearly ahead is now paramount

André Du Sault, MBA (LBS), MPA (Harvard)

DS&H CFO Study Report

Confidential and Proprietary to DS&H 2June 2011

www.dusaulthaddad.com

Study framework

INITIAL OBJECTIVES & KEY QUESTIONS1. In an environment of hyper competition, accelerated changes, how can CFOs build on

their technical expertise to play a greater strategic role?

2. What is the profile of the new CFO incarnation? What new capabilities CFOs need to develop or acquire? What is blocking them?

3. What are the new expectations of the key stakeholders?

METHODOLOGYWe have interviewed about 50 senior executives from a broad range of perspectives:CEOs, CFOs, HROs, IT specialists, bankers, headhunters, administrators, etc.

FOR WHOMCEOs, CFOs, VP Finance, Controllers, keen to build value added in the Finance function.

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CFO study findings (6)

1. Young CFO candidates are caught between two outlooks:. A narrow view of the job in smaller companies, with standard financial reports as the main output. A demanding role in larger companies, where CEOs increasingly require lean-minded & strategic CFOs

2. CFO candidates are usually not schooled to be CFOs, leading to a poor blend of technical and strategic skills

3. Key management and strategic skills are often integrated too late in the CFO career path to yield senior influence at the C-Level

4. The job of Controller or young CFO stands at a pivotal point: What is integrated at that level (style, learnings, skills, responsibilities) shapes the potential for the CFO position.

5. CFOs receive little or any coaching when handling high stake transactions that will make or break their reputation and credibility

6. The pathway from CFO to COO/CEO is misunderstood and misapplied

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FROM FINANCIAL ACCOUNTING TO CO-PILOT

There is increasing pressure on CFOs to perform under

tight budgets & meansan expanding scope of strategic responsibilitieschanging structures moulded by globalisationand the need to balance flexibility and efficiency.

. Yet the roadmap for improvement and a new skills set is often unclear for many CFOs.


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Controller Co-pilot

Bean counter

Lean

Standard

Functional Strategic

STRATEGIC PRESSURESLeading business transformationsLeading operational excellenceNetworked organisationManaging international venturesOutsourcing, off shoring

TECHNICAL PRESSURESNew accounting standardsNew business processesComplex Information technologyDesigning information architectureFacing budget limitations

Bankers

FROM FINANCIAL ACCOUNTING TO CO-PILOTIn many competitive industries, stakeholders require a lean & strategic CFO as co-pilot for the enterprise

Deal maker

Investors

BoardCEO


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Bankers

Investors

Board

CEO


CFOprocessesplanningcontrols

infoIT

intelligent reportsbusiness acumenvalue driven

Head-hunters

transparency – integrity -controlsfinancing strategyCEO – CFO relationship

master of cash flowbusiness plan - strategyproper controls in place

master of cash flowfinance skillsbusiness communication

team buildingleadership & people skillstechnical & strategic skills

Employees clear policiesinformationsystems that work

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FROM FINANCIAL ACCOUNTING TO COPILOTYoung CFOs start off with technical tools to address technological challenges, but soon face a wide range of expectations from stakeholders to deliver strategic value



The roadmap from technical expertise to strategic CFO will include 3 stages :

1. standard challenges for good basic performance in reporting & budgeting

2. high stake initiatives that lead to senior roles and corporate influence

3. continuous learning of technical, managerial and strategic skills

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For instance, challenges for a good basic performance include:

organizing reporting with high automation developing custom tools for finance & cash flow controlling internal planning and strategic tools capturing in-depth understanding of industry and operations managing international operations from a distance

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High stake transactions shape reputation & credibility:

overseeing complex IT projects driving corporate operational excellence programs leading strategic planning implementing mergers and acquisitions negotiating international ventures

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Senior roles call for sharper people and strategic skills:

reading people presenting for impact translating vision into action leading large value creation projects designing structure & organisation winning investors’ trust

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Study participants indicated that poor career guidance may lead young CFOs & aspirants to make the following mistakes:

not reading challenges well ahead choosing titles ahead of better mentoring relying solely on technical skills for influence letting ego build up a trap for a downfall having no plan B in their pocket losing passion of learning losing track of family

Seeing clearly ahead shapes more productive careers

* include controllers, VP finance, young CFOs...

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BUILDING UP A ROADMAP FOR OUTSTANDING CFO SKILLS

http://markfreier.files.wordpress.com/2010/08/unique.jpg


Financial statements

Intelligent reports

Master of cash flow

International expert

Co-pilot

Standard accountsCOGS

Value-added reportsBudget planningStrong teams

ForecastsFinancing strategyInvestments

Global fluencyForeign exchangePartnerships

Strategic planningOperational excellenceGrowth & M&ACompany valuation

BUILDING A ROADMAP FOR THE CFO: 5 LEVELS OF COMPETENCESThe potential value added from the F&A function is wide and incremental:from basic financial statements to international fluency, to co-pilot.CEOs can plan to accelerate the CFO’s contribution.

Basic

Intermediary

Advanced

International

Strategic


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Basic

Intermediate

Advanced

Internationalexpert

Co-pilot


Experience in managing risk from a distance

Adequate finance & cash flow training

Integration of IT platform & accountingBuilding strong teams

Early mentoring of strategic skills

TYPICAL ROADBLOCKS

Mastering COGS

Operational intelligence

Financial statements

Finance strategies

Strategic influence

Global fluency

DESIRED OUTCOMES

1

2

3

4

5

Early roadblocks are mostly technical, but shift rapidly to managerial and strategic.

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LEVEL


On becoming lean & strategic

CFO FOR THE 21ST CENTURYConclusions


Lean & strategic finance functions require a match between the CEO’s demand forhigh standards and the CFO’s technical and managerial capabilities.

CFO candidates should balance their continuous professional development in amix of technical, managerial and strategic skills.

Coaching and training for young CFOs can greatly accelerate their potential.

Skills development can be structured for quick pay-offs.

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EXECUTIVE EXPERIENCE AS CFO:M. Du Sault has accumulated more than 20 years in corporate financial management:Annual consolidated financial statements audited and sent to the head office on 10 January. Having a budgeting and strategic process impeccably integrated to the information systems. Preparing monthly executive reports limited to 10 pages, that speak loud and clear, with insights. Managing international treasury (financing and hedging) programs, over and through financial crises. Meticulous planning of M&A activities, with emphasis on integrating and capturing synergies.Executing several corporate programs on Operational Excellence. Outlining strategic guidelines for pension fund investments.

MULTINATIONAL EXPERIENCENovartis AG (Pharmaceuticals, Agro, Chemicals, Nutrition, Animal Health, Environment), SwitzerlandM. Du Sault was a head office delegate from 1987 to 1999, as CFO in a variety of country holdings, with revenues ranging from $US 15 M to $500 M.Switzerland, Head Office: Controller for Europe Sweden - Auditor: Internal audit program Brazil - Controller: Multiple financial crises, with hyper inflation (1000% p.a.) Philippines - CFO & HR: Restructuring for growth Spain – CFO: Turnaround and best merger operation acknowledged within the Novartis group Mexico – CFO: Novartis merger, local economic crisis, M&A activities

FINANCE FOR SME:Worked in a variety of industrial and technology sectors, from start-ups to mid-size companies.Fund raising for private technology companiesPublic fund raising for Capital Pool Companies Restructuring of finance departments for higher productivity and coaching new CFOsM&A activities for SMEs (USA-Canada).

André Du SaultMBA (LBS)MPA (Harvard)


About the author

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DS&H has designed a series of programs for better CFOs


FINANCE FOR small SME1.5-dayValue added beyond accounting

Develop Outstanding CFOs3 daysThe foundation for senior roles

The CFO as co-pilot0.5-day modulesHigh level expertise & influence

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CFO FOR THE 21ST CENTURY

DS&H CFO Training Programs

For more information & insightsfrom the study:André Du Sault514 [email protected]

Confidential and Proprietary to DS&H 18



DS&H CFO Individual Programs©

For more information & proposals:André Du Sault514 [email protected]

June 2011

Seeing clearly aheadCritical issues & smart choices

1. Coaching the young CFO and aspirants

Before it all crumbles downSymptoms & remedies

2. Fixing and improving the F&A dept

When doing business overseasA discipline & tool kits

3. Mastering foreign exchange risks



International finance

Mastering foreign exchange

Successful international partnerships

Doing business in Asia with no regrets

From great ideas to breakthrough innovations

Lifting strategy onto the board agenda

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DS&H CFO Conferences

For more information & insights:André Du Sault514 [email protected]

CFO Study Findings: Roadmap to becoming lean & strategic

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