Stepping into your first CFO role can feel overwhelming. In this episode, former divisional CFO and GrowCFO Mentor Kevin Appleby shares what really changes when you move from finance leader to CFO.
Drawing on years of experience working with finance leaders across industries, Kevin shares why many CFOs feel unprepared when they step into the role and how the real work begins after the reporting is done. The conversation examines how CFOs add value through judgment, questioning, and forward-looking insight, especially when the path forward is unclear.
This episode is for CFOs, aspiring CFOs, and senior finance leaders who want clarity on what actually matters in the seat and how to grow into the role without trying to be everything to everyone.
Key Timestamps
00:02 Intro
02:18 What separates good finance teams from great ones
05:48 Asking better questions to drive real insight
09:28 Developing business partnering skills through responsibility
12:42 Why CFOs must shift from backward-looking to forward-looking work
18:34 Imposter syndrome and confidence in new CFOs
24:56 Choosing which CFO skills matter most
37:56 The importance of FP&A and delivering bad news early
41:14 Why risk management sits with the CFO
44:22 What new CFOs should focus on in their first 90 days
Learn more about the podcast at https://www.thediaryofacfo.com
If becoming a CFO is in your 5-year plan, get your free CFO Readiness Scorecard here: http://thecfo.scoreapp.com
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00:00:21 --> 00:00:24 Welcome to the Diary of a CFO podcast. I'm Wasee
00:00:24 --> 00:00:26 Akamon, your host. I'm a CFO with a background
00:00:26 --> 00:00:29 in accounting and FPNA and I started this show
00:00:29 --> 00:00:31 to talk about what leading finance really looks
00:00:31 --> 00:00:34 like and what it takes to become CFO. Each week,
00:00:34 --> 00:00:37 we explore how today's top finance leaders build
00:00:37 --> 00:00:40 high performance teams, partner with CEOs and
00:00:40 --> 00:00:42 boards and lead through growth and transformation,
00:00:42 --> 00:00:45 hopefully without burning out in the process.
00:00:45 --> 00:00:47 Today, I'm super delighted to have with me, Kevin
00:00:47 --> 00:00:50 Appleby. Kevin is a rock star where he helps
00:00:50 --> 00:00:53 CFOs turn their finance teams into strategic.
00:00:54 --> 00:00:56 tech enabled partners to the business. He has
00:00:56 --> 00:00:59 been a divisional CFO, a transformation consultant
00:00:59 --> 00:01:02 with PWC, and now a mentor who gives finance
00:01:02 --> 00:01:05 leaders practical frameworks to modernize how
00:01:05 --> 00:01:09 they plan, report, and lead. Now he also hosts
00:01:09 --> 00:01:12 two big podcasts. The Grow CFO Show that is focused
00:01:12 --> 00:01:15 on modern finance leadership and the Next 100
00:01:15 --> 00:01:18 Days podcast, one of the longest running independent
00:01:18 --> 00:01:21 business podcasts in the UK, where it talks to
00:01:21 --> 00:01:23 entrepreneurs and experts about... practical
00:01:23 --> 00:01:27 strategies that create real results. Welcome
00:01:27 --> 00:01:30 to the show, Kevin. Gosh. Thank you for that
00:01:30 --> 00:01:34 introduction. Wow. I must go on and meet this
00:01:34 --> 00:01:39 rock star sometime. Yes. Yes. I'm super excited
00:01:39 --> 00:01:41 to have you with me. I know I've been on your
00:01:41 --> 00:01:45 podcast twice, maybe three times. Yes. Yeah.
00:01:45 --> 00:01:47 And so it feels so good to be on the other side
00:01:47 --> 00:01:50 now that I get to interview you. And it's very
00:01:50 --> 00:01:53 strange being on the other side. I mean, on that
00:01:53 --> 00:01:56 5 -4 -3 -2 -1 countdown starting in Riverside,
00:01:56 --> 00:01:58 I was about to say, hello and welcome to the
00:01:58 --> 00:02:05 Grossier Phone Show. Well, welcome to the Diagrams
00:02:05 --> 00:02:08 CFO podcast. So I'm really curious to dive in
00:02:08 --> 00:02:11 because you have so much experience and develop
00:02:11 --> 00:02:14 so many frameworks around what it takes to turn
00:02:14 --> 00:02:18 a good finance team into a great finance team.
00:02:18 --> 00:02:20 So when you look at finance teams today, what
00:02:20 --> 00:02:23 do you think is the real difference between a
00:02:23 --> 00:02:28 good team and a great one? I think it probably
00:02:28 --> 00:02:32 comes down to business partnering. I think back
00:02:32 --> 00:02:37 to that kind of divisional CFO role that I was
00:02:37 --> 00:02:41 doing in the chemical industry. And if I was
00:02:41 --> 00:02:45 going back and saying to my younger self, what
00:02:45 --> 00:02:48 should I have been doing different? It's definitely
00:02:48 --> 00:02:51 much more business partnering. It was a business
00:02:51 --> 00:02:54 partnering role, but it was very much about putting
00:02:54 --> 00:02:57 the monthly result together, presenting the monthly
00:02:57 --> 00:03:00 result to the business team. helping them through
00:03:00 --> 00:03:04 the budget rounds and things like that. Yes,
00:03:04 --> 00:03:07 those are the standard things that every finance
00:03:07 --> 00:03:09 team should be doing and explaining the result
00:03:09 --> 00:03:12 and telling the story. But I think what makes
00:03:12 --> 00:03:17 the real difference is rather than kind of their
00:03:17 --> 00:03:19 every month and say here's the sales number,
00:03:19 --> 00:03:21 here's the profit number, here's the differences,
00:03:21 --> 00:03:23 here's why we're off budget, at which point I
00:03:23 --> 00:03:25 think a lot of business teams actually switch
00:03:25 --> 00:03:30 off. I think the really good finance team know
00:03:30 --> 00:03:32 all the individuals in it know what is keeping
00:03:32 --> 00:03:37 their internal customer within the business awake
00:03:37 --> 00:03:40 at night. They know the issues and problems that
00:03:40 --> 00:03:44 they're going through and they're there to support
00:03:44 --> 00:03:48 and advise and help with those real business
00:03:48 --> 00:03:51 problems as opposed to just constantly talking
00:03:51 --> 00:03:54 about the financial result. Wow. That is so true.
00:03:54 --> 00:03:56 I like how you say they usually switch off because
00:03:56 --> 00:04:00 it feels like, okay, I understand I'm off, then
00:04:00 --> 00:04:06 what? So what do you think is holding, tend to
00:04:06 --> 00:04:09 hold those otherwise good financing back? Like,
00:04:09 --> 00:04:11 I know there is a lot of literature around business
00:04:11 --> 00:04:17 partnering, a lot of courses and talk and articles
00:04:17 --> 00:04:19 around it, but in your experience, what have
00:04:19 --> 00:04:21 you seen as some of the things that hold people
00:04:21 --> 00:04:24 back? from being those true business partners.
00:04:25 --> 00:04:28 It's a practical skill. You've got to learn through
00:04:28 --> 00:04:32 experience and find there are books, there are
00:04:32 --> 00:04:35 articles, there are courses. It's not head knowledge
00:04:35 --> 00:04:40 is part of it, but actually practicing it is
00:04:40 --> 00:04:43 the difference. And one of the things we run
00:04:43 --> 00:04:45 in Grow CFO is the business partner bootcamp.
00:04:46 --> 00:04:49 Now, any of our Grow CFO members can sign up
00:04:49 --> 00:04:52 and do one over the whole series of modules should
00:04:52 --> 00:04:57 they want to. And the reason that that's different
00:04:57 --> 00:05:01 is because we're trying to do practical stuff
00:05:01 --> 00:05:06 that you can attend a two hour workshop, learn
00:05:06 --> 00:05:08 some stuff, and you can put it into practice
00:05:08 --> 00:05:15 the next day. And that's the bit that a lot of
00:05:15 --> 00:05:19 training in this is missing. Fine having the
00:05:19 --> 00:05:21 head knowledge. It's fine knowing what you should
00:05:21 --> 00:05:24 do. You've actually got to go out there and do
00:05:24 --> 00:05:28 it. A good course. If you've got a session every
00:05:28 --> 00:05:31 week in a business partnering bootcamp like that,
00:05:31 --> 00:05:33 you should be setting homework each session.
00:05:33 --> 00:05:36 Stuff that people go out and do in practice in
00:05:36 --> 00:05:40 the business. It's changing your own behavior
00:05:40 --> 00:05:45 turns you into a good business partner. Learning
00:05:45 --> 00:05:50 how to tell a story. is one very important skill.
00:05:50 --> 00:05:54 Learning how to ask questions is another important
00:05:54 --> 00:05:58 skill. Why is the marketing budget overspent
00:05:58 --> 00:06:02 this month by 50 %? Well, we can go do the variance
00:06:02 --> 00:06:05 analysis and we can see what we've spent extra
00:06:05 --> 00:06:09 on. So what? The question you're going to ask
00:06:09 --> 00:06:12 is why? And normally you've got to ask that why
00:06:12 --> 00:06:16 question about seven times to get to know what
00:06:16 --> 00:06:20 it is. The first thing, why is this budget overspent?
00:06:20 --> 00:06:22 The first thing is, oh, we spent twice as much
00:06:22 --> 00:06:25 with that supplier as normal. Why have we spent
00:06:25 --> 00:06:27 twice as much as normal? Oh, well, they were
00:06:27 --> 00:06:29 putting these two or three extra presentations
00:06:29 --> 00:06:32 together for us. Why were they doing that? Oh,
00:06:32 --> 00:06:35 well, we've got this new campaign, and so on
00:06:35 --> 00:06:37 and so on, to actually understand the number.
00:06:37 --> 00:06:41 Just asking the why question once isn't enough.
00:06:42 --> 00:06:46 Finance should be then no. the sixth or the seventh
00:06:46 --> 00:06:49 why question to get to the real truth and should
00:06:49 --> 00:06:52 be interpreting that into the story that they're
00:06:52 --> 00:06:54 telling about the results and it could be that
00:06:54 --> 00:06:57 well fine we're over budget great because of
00:06:57 --> 00:07:00 this doesn't matter that's part of the business
00:07:00 --> 00:07:02 plan now and it wasn't in the original budget
00:07:02 --> 00:07:06 oh you've been doing all of this stuff why are
00:07:06 --> 00:07:09 we doing that is the other way of approaching
00:07:09 --> 00:07:12 that are we sure we should be doing that and
00:07:12 --> 00:07:15 that's that's kind of finance Policing it a little
00:07:15 --> 00:07:17 bit because you you are responsible to some extent
00:07:17 --> 00:07:21 on hitting those financial results So a good
00:07:21 --> 00:07:24 business partner should be having that dialogue
00:07:24 --> 00:07:26 all the time Also, the business team will come
00:07:26 --> 00:07:32 along and ask for help Now or we want to do this
00:07:32 --> 00:07:36 what do you think and finance gets an awful reputation
00:07:36 --> 00:07:43 of saying no in such circumstances and good business
00:07:43 --> 00:07:46 partner wouldn't be saying no it would be well
00:07:46 --> 00:07:49 we've we've got these three options here are
00:07:49 --> 00:07:52 the pros and cons of each let's work out what
00:07:52 --> 00:07:55 we should do now it should be supporting the
00:07:55 --> 00:07:59 business with insight practical alternatives
00:07:59 --> 00:08:03 and good solid reasoning of what's the best thing
00:08:03 --> 00:08:07 to do Wow, I like first how you said you have
00:08:07 --> 00:08:10 to ask why multiple times because sometimes the
00:08:10 --> 00:08:13 first why tends to be met with people being on
00:08:13 --> 00:08:16 the defensive side. Like, am I getting in trouble?
00:08:17 --> 00:08:19 And like you said, the more you dig into it,
00:08:19 --> 00:08:22 you get to get that better understanding. Now
00:08:22 --> 00:08:25 I'm curious for CFO, especially CFOs who feel
00:08:25 --> 00:08:28 like they have like great teams, like how do
00:08:28 --> 00:08:32 they, beyond just the programs or the courses,
00:08:32 --> 00:08:35 how do they expose their team and get them to
00:08:35 --> 00:08:37 work on those business partnering skills from
00:08:37 --> 00:08:40 that seat? How do you get them to do it? Well,
00:08:40 --> 00:08:42 I think first of all, you've got to give them
00:08:42 --> 00:08:46 responsibility. You need to be exposed to doing
00:08:46 --> 00:08:50 it to learn how to do it. So it's it's effectively
00:08:50 --> 00:08:54 Knowing the balance I think was here You don't
00:08:54 --> 00:08:57 throw people in the deep end and let them sort
00:08:57 --> 00:09:00 of splash about and potentially drown You've
00:09:00 --> 00:09:06 got to give them enough leeway to learn and gain
00:09:06 --> 00:09:10 experience without leaving folk exposed Okay,
00:09:10 --> 00:09:14 so It's delegating, it's delegating the right
00:09:14 --> 00:09:18 amount of responsibility authorities, not delegating
00:09:18 --> 00:09:21 tasks, it's delegating a responsibility for doing
00:09:21 --> 00:09:25 things. And one way I think doing the business
00:09:25 --> 00:09:28 partnering piece quite well is giving people
00:09:28 --> 00:09:32 project exposure. You're the finance team member
00:09:32 --> 00:09:36 on this business project and getting them involved
00:09:36 --> 00:09:40 in the project beyond just recording the financial
00:09:40 --> 00:09:43 numbers on the project. Get them involved in
00:09:43 --> 00:09:45 the decisions on the day -to -day project management.
00:09:46 --> 00:09:50 That gets them more involved in the practical
00:09:50 --> 00:09:55 stuff that's going on the ground. Certainly in
00:09:55 --> 00:09:58 that place, some of the responsibilities of project
00:09:58 --> 00:10:01 manager can quite easily fall on finance. The
00:10:01 --> 00:10:04 risk register for the project. Great place to
00:10:04 --> 00:10:08 get the finance person involved. recording the
00:10:08 --> 00:10:12 risks, working out whether this is high, medium
00:10:12 --> 00:10:15 or low, working out with the rest of the project
00:10:15 --> 00:10:17 team. Hey, we've got this risk. How are we going
00:10:17 --> 00:10:21 to mitigate it? And very much more working together
00:10:21 --> 00:10:24 with the team than just being there to be the
00:10:24 --> 00:10:28 scorekeeper. That's amazing. And I like I wanted.
00:10:28 --> 00:10:32 dive a little more into this idea of risk management.
00:10:32 --> 00:10:34 Because you're a chartered accountant, I'm a
00:10:34 --> 00:10:37 CPA. And I can say confidently that throughout
00:10:37 --> 00:10:40 our regular curriculum, we don't really talk
00:10:40 --> 00:10:44 about risk or strategy. It's not like topics
00:10:44 --> 00:10:49 that are really explored in those programs. So
00:10:49 --> 00:10:51 you come out of school and you get to a point
00:10:51 --> 00:10:54 and you're like, okay, my... you know, I'm not
00:10:54 --> 00:10:58 too comfortable around learning about risk or
00:10:58 --> 00:11:00 managing risk, about talking about strategy,
00:11:00 --> 00:11:02 seeing the bigger picture. And you mentor a lot
00:11:02 --> 00:11:06 of CFOs, a lot of finance leaders who want to
00:11:06 --> 00:11:09 become CFOs. What have you seen really help people
00:11:09 --> 00:11:12 make that transition between what they learned
00:11:12 --> 00:11:14 in school and what they have, where they need
00:11:14 --> 00:11:21 to be? That is a six million dollar question.
00:11:22 --> 00:11:26 Yes. There is one of the biggest problem as you
00:11:26 --> 00:11:31 come through the ranks and become a senior finance
00:11:31 --> 00:11:37 leader, CFO. You are required to do a whole load
00:11:37 --> 00:11:41 of stuff that nobody ever told you how to do
00:11:41 --> 00:11:45 to pass your exams. Yes. It goes back to some
00:11:45 --> 00:11:49 history. Traditionally, what did a Chartered
00:11:49 --> 00:11:54 Accountant or a CPA do? We were auditors. We
00:11:54 --> 00:11:56 were bookkeepers. We were either putting together
00:11:56 --> 00:12:00 the published accounts of the company or we were
00:12:00 --> 00:12:04 auditing them. So all our skills are based around
00:12:04 --> 00:12:08 double entry, true and fair view. Everything's
00:12:08 --> 00:12:11 based around looking backwards because we were
00:12:11 --> 00:12:15 historically accounting. First thing, as you're
00:12:15 --> 00:12:20 in the CFO, in the finance and industry role,
00:12:21 --> 00:12:23 is, okay, yeah, there's going to be the bookkeeping
00:12:23 --> 00:12:24 team, there's going to be accounts payable, there's
00:12:24 --> 00:12:26 going to be accounts receivable, but where does
00:12:26 --> 00:12:30 it really happen? It's the FP &A people, the
00:12:30 --> 00:12:34 CFO, and so on. Because you've got to start looking
00:12:34 --> 00:12:38 forward, okay? You've got to start... knowing
00:12:38 --> 00:12:40 what the future looks like, you've got to start
00:12:40 --> 00:12:44 being able to put scenarios together and look
00:12:44 --> 00:12:47 at what the financial implications might be.
00:12:48 --> 00:12:51 It means you've got to make a whole load of assumptions
00:12:51 --> 00:12:54 to put those models together. All forecasts,
00:12:54 --> 00:12:56 all budgets are based on a whole pile of assumptions.
00:12:57 --> 00:12:59 There's where good business partnering comes
00:12:59 --> 00:13:02 in as well, because if I'm putting together a
00:13:02 --> 00:13:08 financial model or a budget or a... The finances
00:13:08 --> 00:13:11 behind a strategy now the rest of the business
00:13:11 --> 00:13:14 isn't going to accept those if they're my assumptions
00:13:14 --> 00:13:18 You've got to get the assumptions owned by the
00:13:18 --> 00:13:23 business That is a very very key part of of moving
00:13:23 --> 00:13:28 into this this higher place Being really part
00:13:28 --> 00:13:31 of the business team understanding what the business
00:13:31 --> 00:13:35 is all about and being able to jointly make those
00:13:35 --> 00:13:39 reasonable assumptions going forwards about what
00:13:39 --> 00:13:41 is it that we're forecasting, what is it that
00:13:41 --> 00:13:43 we're modeling, what are the options available
00:13:43 --> 00:13:46 to us? How do you learn it? Gosh, that's a difficult
00:13:46 --> 00:13:48 question because you certainly didn't learn it
00:13:48 --> 00:13:50 to pass your exams. You're picking this stuff
00:13:50 --> 00:13:54 on the way through. You're learning by experience.
00:13:57 --> 00:14:02 I think a key way of learning is... watching
00:14:02 --> 00:14:06 your peers, watching your seniors as you're going
00:14:06 --> 00:14:08 through and developing a career. If you're number
00:14:08 --> 00:14:11 two in finance, you're working for a great CFO,
00:14:11 --> 00:14:16 watch and learn. I also think there's a big part
00:14:16 --> 00:14:21 for mentoring in this. And certainly one of the
00:14:21 --> 00:14:26 things we find a new CFO will have is probably
00:14:26 --> 00:14:28 a whole load of imposter syndrome, a whole load
00:14:28 --> 00:14:31 of lack of confidence. and a whole load of, I've
00:14:31 --> 00:14:34 never done this before, what exactly do I do?
00:14:36 --> 00:14:39 So Gros CFO, we do a huge amount of one -on -one
00:14:39 --> 00:14:43 mentoring of those people. We've got a big pool
00:14:43 --> 00:14:47 of mentors now. We've got probably over 30 scattered
00:14:47 --> 00:14:54 across the globe, scattered across various diverse
00:14:54 --> 00:14:57 communities, scattered across various industries.
00:14:58 --> 00:15:02 So the idea is you pick a mentor that you could
00:15:02 --> 00:15:06 chemistry with, and you can get on with. But
00:15:06 --> 00:15:08 the idea of that mentor is they've been there,
00:15:08 --> 00:15:12 done it, and got the t -shirt. So unlike a business
00:15:12 --> 00:15:16 coach who will sit you down and sort of ask you
00:15:16 --> 00:15:18 to solve your own problem by asking you some
00:15:18 --> 00:15:21 questions, the mentors more likely come and say,
00:15:22 --> 00:15:24 oh, yeah, I had something similar to that once.
00:15:25 --> 00:15:32 I did X. yeah and xx worked or yeah I did what
00:15:32 --> 00:15:34 you're thinking you're doing and it didn't work.
00:15:34 --> 00:15:37 We need to think between us of what else we can
00:15:37 --> 00:15:42 do. So that practical level of help really comes
00:15:42 --> 00:15:46 in. We've got the CFO program as well that's
00:15:46 --> 00:15:49 doing group mentoring across 12 months along
00:15:49 --> 00:15:53 with two hour workshops every month on particular
00:15:53 --> 00:15:57 themes to really try to skill new CFOs up. in
00:15:57 --> 00:15:59 all of the areas they're going to come into touch
00:15:59 --> 00:16:04 with. You've been the internal face of finance,
00:16:05 --> 00:16:07 you've been doing the monthly reporting on your
00:16:07 --> 00:16:10 career, you've been looking at spreadsheets,
00:16:10 --> 00:16:12 you've probably been doing some business partnering
00:16:12 --> 00:16:14 with the rest of the business internally. Hang
00:16:14 --> 00:16:17 on, suddenly you're the external face of finance.
00:16:18 --> 00:16:22 You're where the book stops for a start. there's
00:16:22 --> 00:16:25 nobody else in finance at your level where you're
00:16:25 --> 00:16:27 probably used to having a few peers around the
00:16:27 --> 00:16:31 place and you're the one that's part of the leadership
00:16:31 --> 00:16:34 team, you're the one that's reporting into the
00:16:34 --> 00:16:37 board, you're dealing with the investors, you're
00:16:37 --> 00:16:40 dealing with customers, you're dealing with suppliers
00:16:40 --> 00:16:43 and somebody else has their nose in the Excel
00:16:43 --> 00:16:46 spreadsheet that you were used to spending 50
00:16:46 --> 00:16:49 -60 % of your time doing earlier in your career.
00:16:51 --> 00:16:55 We are all brought up to be number crunches to
00:16:55 --> 00:16:58 a certain extent. And the role of CFO has got
00:16:58 --> 00:17:01 nothing to do with number crunching. You've probably
00:17:01 --> 00:17:03 got somebody else doing that for you. I mean,
00:17:03 --> 00:17:07 you can't even, you may want to, there is no
00:17:07 --> 00:17:12 way. Yeah. There's an element that we delve back
00:17:12 --> 00:17:15 into, dig back into our comfort zone. where we
00:17:15 --> 00:17:18 like doing things. Yes. I remember when I first
00:17:18 --> 00:17:22 became CFO, there was a big conference. It's
00:17:22 --> 00:17:24 called OFN in that industry. And I went with
00:17:24 --> 00:17:30 our CEO, CEO, CEO, CEO. And I think we had a
00:17:30 --> 00:17:34 few people coming in and out, but it was a lot
00:17:34 --> 00:17:37 of talk with potential funders, investment, business
00:17:37 --> 00:17:40 opportunities. And by the end, I was like, I
00:17:40 --> 00:17:43 just want to be on my desk in front of a spreadsheet
00:17:43 --> 00:17:48 and I'm an extrovert. that tells you yeah it
00:17:48 --> 00:17:52 takes a lot it does it does so i'm curious when
00:17:52 --> 00:17:54 you hear all these cfos coming in through your
00:17:54 --> 00:17:56 program like what keeps them up at night like
00:17:56 --> 00:18:00 what do they struggle the most with gosh the
00:18:00 --> 00:18:04 new cfo will certainly have imposter syndrome
00:18:04 --> 00:18:11 okay it's it's almost certain and they they will
00:18:11 --> 00:18:14 think oh i'm going to be found out That's essentially
00:18:14 --> 00:18:16 what imposter syndrome is. I don't have the ability
00:18:16 --> 00:18:19 to do this job, I'm going to be found out. Well,
00:18:19 --> 00:18:21 it's a load of rubbish because somebody promoted
00:18:21 --> 00:18:23 you into that job because they thought you could
00:18:23 --> 00:18:27 do it. You just simply haven't realised it yourself.
00:18:28 --> 00:18:30 Yeah, you're faced with all this new stuff and
00:18:30 --> 00:18:33 all these doubts and worries about it, but hang
00:18:33 --> 00:18:37 on, look back at the rest of your career. Are
00:18:37 --> 00:18:39 you really being asked to do anything that's
00:18:39 --> 00:18:41 that much different from what you've done in
00:18:41 --> 00:18:45 the past? Okay, fine. You're having to business
00:18:45 --> 00:18:49 partner with the CEO. Yeah, that's different.
00:18:49 --> 00:18:51 It's putting you on a different level. But then
00:18:51 --> 00:18:54 look at how many other people in the past have
00:18:54 --> 00:18:56 you had a business partner in relationship with
00:18:56 --> 00:19:00 successfully. Oh, you're going to have to get
00:19:00 --> 00:19:02 involved in these projects, these strategy things.
00:19:02 --> 00:19:05 Well, no, you've probably done some of that at
00:19:05 --> 00:19:09 a lower level. And there's this worry that, well,
00:19:09 --> 00:19:12 I just haven't done this before. You know, if
00:19:12 --> 00:19:14 you if you actually look back over your career
00:19:14 --> 00:19:18 and look at all of your successors You'll suddenly
00:19:18 --> 00:19:20 realize yeah, you've done a lot of stuff. You've
00:19:20 --> 00:19:22 done all of the stuff that's necessary for this
00:19:22 --> 00:19:25 role You just haven't done it in this environment
00:19:25 --> 00:19:31 That one keeps a lot of New CFOs awake at night.
00:19:31 --> 00:19:35 Okay Okay, and I love how you put it like the
00:19:35 --> 00:19:37 best way to overcoming like you said is to reflect
00:19:37 --> 00:19:42 on what got you to that level Yeah and you're
00:19:42 --> 00:19:46 out lovely sunny day on a hike. You've got this
00:19:46 --> 00:19:50 great big hill in front of you. You start walking
00:19:50 --> 00:19:52 and you walk along and you've done a fair bit
00:19:52 --> 00:19:55 of stuff and then suddenly you've got this final
00:19:55 --> 00:19:57 incline to get across. Now that looks like a
00:19:57 --> 00:20:01 big struggle. A turn around look backwards and
00:20:01 --> 00:20:04 you realize the view looking backwards, how far
00:20:04 --> 00:20:07 you've climbed so far, all the stuff you've done.
00:20:07 --> 00:20:11 It's that sort of thing. Yeah, as you're looking
00:20:11 --> 00:20:13 forward, it looks as though you got a lot of
00:20:13 --> 00:20:16 work to do turn around look backwards and realize
00:20:16 --> 00:20:20 what you've done already Mm -hmm. Yeah. Yeah,
00:20:20 --> 00:20:24 and that's such a great exercise to do like not
00:20:24 --> 00:20:26 just physically But you know even as we go through
00:20:26 --> 00:20:29 our career to take to take some time and reflect
00:20:29 --> 00:20:32 on how far we've come Because it does give you
00:20:32 --> 00:20:36 it helps you stay grounded for what's ahead Yeah.
00:20:37 --> 00:20:40 And one of the things I had a mentoring, Rosie,
00:20:40 --> 00:20:42 about Katherine Clark actually recommends keeping
00:20:42 --> 00:20:47 a success diary. Write down in your success diary,
00:20:47 --> 00:20:50 everything you achieve. And when you're feeling
00:20:50 --> 00:20:52 a bit of this imposter syndrome, go back and
00:20:52 --> 00:20:57 have a look at the list. Nice. Nice. Yeah, because
00:20:57 --> 00:21:00 we tend to forget. I mean, time flies. There's
00:21:00 --> 00:21:02 so many things going on. That's such a great
00:21:02 --> 00:21:05 advice. Thanks for sharing. Yeah. And even sit
00:21:05 --> 00:21:08 down at the end of probably each week's a bit
00:21:08 --> 00:21:11 much, but each month, what are my successes this
00:21:11 --> 00:21:14 month? Stick them in the success diary. I look
00:21:14 --> 00:21:17 very, very quickly. I've quite a big list. Oh
00:21:17 --> 00:21:21 yeah. I'm sure. Yeah. Now I'm curious. Yeah,
00:21:21 --> 00:21:24 go ahead. Another one is you can put together
00:21:24 --> 00:21:27 a list of here's what I think I've achieved.
00:21:27 --> 00:21:29 Put it together yourself, then give it to some
00:21:29 --> 00:21:32 of your peers and say, this is what I've achieved.
00:21:32 --> 00:21:34 What do you think? You'll suddenly find that
00:21:34 --> 00:21:36 they come back with some feedback and the list's
00:21:36 --> 00:21:41 twice as big as you thought it was. Wow, nice.
00:21:42 --> 00:21:44 That is nice. Well, you hope it will be twice.
00:21:44 --> 00:21:46 But yeah, that's very true because I feel like
00:21:46 --> 00:21:49 we sometimes so hard on ourselves. Yeah, we are.
00:21:49 --> 00:21:50 We're hard on ourselves. We're the last people
00:21:50 --> 00:21:53 to recognize what we've done, what we've accomplished.
00:21:55 --> 00:21:57 You put a list together of what you've accomplished
00:21:57 --> 00:22:02 and then give it to one of your team. I bet they'd
00:22:02 --> 00:22:04 put a few other things on the list that you hadn't
00:22:04 --> 00:22:06 even thought of. Oh, that's such a great, I'm
00:22:06 --> 00:22:13 so doing it. I'm still doing it. Um, and now
00:22:13 --> 00:22:16 I'm curious though, um, cause like you said,
00:22:16 --> 00:22:19 we, we come through the ranks. Um, there's a
00:22:19 --> 00:22:21 lot of things we have to, to learn bikes that
00:22:21 --> 00:22:25 their only experience will help mentorship. Of
00:22:25 --> 00:22:27 course helps a lot having the courses. Yes. But
00:22:27 --> 00:22:31 I feel like now the CFO role has evolved so much.
00:22:32 --> 00:22:36 It's a lot and technology pressure from the board
00:22:36 --> 00:22:39 pressure for people, for you to implement AI
00:22:39 --> 00:22:43 transformation. Like how do you navigate the
00:22:43 --> 00:22:46 actual weight of the role? Oh, good grief. That's
00:22:46 --> 00:22:49 a very good question. How do you navigate the
00:22:49 --> 00:22:52 weight of the role? Well, I mean, in gross CFO
00:22:52 --> 00:22:57 before AI even came along, we had the CFO competency
00:22:57 --> 00:23:00 framework and anybody listening to this you can
00:23:00 --> 00:23:03 go along to our website at growthcfo .net you
00:23:03 --> 00:23:05 can take the competency framework free of charge
00:23:05 --> 00:23:08 and give you a big pdf report about your skills
00:23:08 --> 00:23:12 and competencies if you do and compare them to
00:23:12 --> 00:23:15 your peer group but as we put that together we
00:23:15 --> 00:23:20 realized there were nine competencies then we
00:23:20 --> 00:23:23 broke each competency down into five skills simple
00:23:23 --> 00:23:26 maths nine competencies, five skills in each.
00:23:26 --> 00:23:30 That's 45 skills that a CFO could have, ranging
00:23:30 --> 00:23:35 from the governance, the traditional roles like
00:23:35 --> 00:23:37 that, through to strategy, through to change
00:23:37 --> 00:23:41 management, through to mergers and acquisitions,
00:23:42 --> 00:23:45 transactions, business exits, fundraising, the
00:23:45 --> 00:23:48 soft skills of storytelling and so on. Huge,
00:23:48 --> 00:23:52 huge number. And... Now the first thing you've
00:23:52 --> 00:23:54 got to recognize is you'll never master all 45.
00:23:55 --> 00:23:59 Yes. And I think if you start saying that I have
00:23:59 --> 00:24:02 got to be absolutely great in everything, all
00:24:02 --> 00:24:08 you will do is beat yourself up. You need to
00:24:08 --> 00:24:11 focus on the ones that are most important for
00:24:11 --> 00:24:14 the role that you're doing. Like if I take the
00:24:14 --> 00:24:17 competency framework, we've got one competency
00:24:17 --> 00:24:21 called catalyst for change. Now, 25 years as
00:24:21 --> 00:24:24 a management consultant, my skill set around
00:24:24 --> 00:24:27 there comes out very high, way, way higher than
00:24:27 --> 00:24:30 the peer group, but I then answer the questions
00:24:30 --> 00:24:35 that are around fundraising M &A and so on, and
00:24:35 --> 00:24:38 I find that my skill set is very, very weak.
00:24:39 --> 00:24:41 And I've learned a lot through reviewing and
00:24:41 --> 00:24:43 putting together some of our courses in that
00:24:43 --> 00:24:46 area, but I've never done any of it in practice.
00:24:46 --> 00:24:49 And I don't intend doing any of it in practice.
00:24:49 --> 00:24:53 So the skill area is weak, but I don't feel any
00:24:53 --> 00:24:56 problem with that because I don't recognize it
00:24:56 --> 00:24:59 being relevant to the sort of role that I want
00:24:59 --> 00:25:02 to do. And I think one of the key things that
00:25:02 --> 00:25:05 I would say to anybody is what sort of CFO do
00:25:05 --> 00:25:09 you want to be and work on the skills and competencies
00:25:09 --> 00:25:12 that are important to that? And I think there
00:25:12 --> 00:25:16 are broadly... three sorts of CFO okay you might
00:25:16 --> 00:25:19 be a bit of a blend of all three but there is
00:25:19 --> 00:25:22 the the business partnering CFO where you're
00:25:22 --> 00:25:26 very much the strategist you're the co -pilot
00:25:26 --> 00:25:30 with the CEO and you're very much into planning
00:25:30 --> 00:25:35 and strategizing and looking to the future okay
00:25:35 --> 00:25:38 then there's the operational CFO operational
00:25:38 --> 00:25:42 CFO is much more probably one of the skill sets
00:25:42 --> 00:25:45 that I think I've got most and that's around
00:25:45 --> 00:25:48 transforming stuff, around business improvement
00:25:48 --> 00:25:53 and much more of a change management, understanding
00:25:53 --> 00:25:57 the cost of stuff, being able to take cost out
00:25:57 --> 00:26:00 of the business all fits in there. Then there's
00:26:00 --> 00:26:05 the Wall Street CFO who would be the real specialist
00:26:05 --> 00:26:09 in going raising funds. taking businesses through
00:26:09 --> 00:26:12 mergers, acquisitions, taking businesses through
00:26:12 --> 00:26:15 exits. And that's a very, very different set
00:26:15 --> 00:26:19 of skills. Which one do you want to be? Okay.
00:26:20 --> 00:26:22 If you want to be in the strategy space, well,
00:26:22 --> 00:26:24 you can surround yourself with one or two very
00:26:24 --> 00:26:27 good people who can do the business transformation
00:26:27 --> 00:26:30 piece. If you know that you're going from that
00:26:30 --> 00:26:34 role into some sort of major transaction. Well,
00:26:34 --> 00:26:36 there are lots of third party advisors you can
00:26:36 --> 00:26:39 bring on board to to help with your own lack
00:26:39 --> 00:26:43 of skills in that area. Why would you be highly
00:26:43 --> 00:26:45 skilled in that particular area if you're possibly
00:26:45 --> 00:26:48 only going to do it once or twice in your career?
00:26:50 --> 00:26:51 Might be other CFOs who think well I'm going
00:26:51 --> 00:26:53 to jump from company to company because I love
00:26:53 --> 00:26:55 this stuff, I love being involved in raising
00:26:55 --> 00:26:58 funds and so on. You find a lot of fractionals
00:26:58 --> 00:27:00 actually in that space. So they'll come on board
00:27:00 --> 00:27:02 to help smaller companies through their, their
00:27:02 --> 00:27:05 very first fundraising round or they'll be on
00:27:05 --> 00:27:09 board to help them through an exit phase. Yeah.
00:27:09 --> 00:27:13 Wow. Yeah. But you know, AI and transforming
00:27:13 --> 00:27:15 things. I don't think people have properly got
00:27:15 --> 00:27:20 their head around that one yet. Well, yeah. I
00:27:20 --> 00:27:23 think right now is the hype. It's a lot of hype.
00:27:23 --> 00:27:25 But before we get to AI, because we'll probably
00:27:25 --> 00:27:29 spend one hour just on AI. I want to go back
00:27:29 --> 00:27:32 to what you said about how you have the competency
00:27:32 --> 00:27:34 framework. I did take it a couple of years ago.
00:27:34 --> 00:27:37 And yes, some areas I was very strong, some areas
00:27:37 --> 00:27:39 I was like, what the heck? And I became a CFO
00:27:39 --> 00:27:43 still. Like you said, there is no one size fits
00:27:43 --> 00:27:46 all. And I like how you broke down between the
00:27:46 --> 00:27:49 different, the three different roles, the three
00:27:49 --> 00:27:51 different types of CFOs, because you realize
00:27:51 --> 00:27:55 every company needs a different type of CFO at
00:27:55 --> 00:27:57 different times, right? Whether it's the maturity
00:27:57 --> 00:28:01 stage where they may need that Wall Street CFO
00:28:01 --> 00:28:03 first. And then after that, they will likely
00:28:03 --> 00:28:07 need the operational CFO. Yeah. to be able to
00:28:07 --> 00:28:10 put those uh all these operationalize all the
00:28:10 --> 00:28:13 things that needs to happen to get to the bigger
00:28:13 --> 00:28:17 stage but also it means for a CFO that's even
00:28:17 --> 00:28:19 within that same company growing for all the
00:28:19 --> 00:28:23 phases that they can hire other people to get
00:28:23 --> 00:28:25 that kind of things done but it's recognizing
00:28:25 --> 00:28:28 that you don't have to do it all and that by
00:28:28 --> 00:28:32 itself is freeing yeah and we put that framework
00:28:32 --> 00:28:35 together originally for our future CFO program.
00:28:36 --> 00:28:39 So the community that were joining us because
00:28:39 --> 00:28:42 they were maybe a couple of years away from that
00:28:42 --> 00:28:45 CFO role. So we put the framework together initially
00:28:45 --> 00:28:49 to give those folk an idea of where their skills
00:28:49 --> 00:28:51 were and the areas perhaps they should think
00:28:51 --> 00:28:54 about focusing on improving in the next couple
00:28:54 --> 00:28:58 of years. And a lot of people were quite shocked
00:28:58 --> 00:29:00 by the number of gaps they had when they took
00:29:00 --> 00:29:05 that. And One of the things that's come out is
00:29:05 --> 00:29:07 that, yes, you can improve some things, you can
00:29:07 --> 00:29:11 get yourself into a better position, but nobody
00:29:11 --> 00:29:14 is usually ready when they take their first CFO
00:29:14 --> 00:29:22 role. Yes. Yeah. Okay. Why is that? It's because
00:29:22 --> 00:29:24 a certain amount of those skills that you need
00:29:24 --> 00:29:28 to do the job, you've got to learn in practice.
00:29:30 --> 00:29:33 How do I go deal with the investor as a CFO?
00:29:34 --> 00:29:37 You can't learn that from a textbook. You learn
00:29:37 --> 00:29:39 how to deal with the investor by actually going
00:29:39 --> 00:29:44 dealing with the investor. True. OK. So you're
00:29:44 --> 00:29:47 you're never going to be 100 percent ready when
00:29:47 --> 00:29:53 you take your first CFO job. Agree. Also, think
00:29:53 --> 00:29:57 about your own personal development. If you take
00:29:57 --> 00:30:02 a job on that on day one, you are 100 % qualified
00:30:02 --> 00:30:05 to do and you've got every competency and every
00:30:05 --> 00:30:07 skill to do it, isn't this going to be a bit
00:30:07 --> 00:30:10 boring? Where's the learning coming from? Where's
00:30:10 --> 00:30:14 the development coming from? And I'd say that
00:30:14 --> 00:30:17 it's no good if you've only got 25 % of the skills
00:30:17 --> 00:30:20 to do the job. You're going to fall flat on your
00:30:20 --> 00:30:25 face. But if you've got around 60 % or so, well,
00:30:26 --> 00:30:28 you're going to go in there and do a good job.
00:30:28 --> 00:30:30 And you're going to have some fun while you're
00:30:30 --> 00:30:33 learning that balance of 40%. Yeah. It's definitely
00:30:33 --> 00:30:35 good to have that stretch. And I like how you
00:30:35 --> 00:30:37 said, there's certain things you can only get
00:30:37 --> 00:30:41 that by, uh, by doing, cause I myself, when I
00:30:41 --> 00:30:44 started in the role and having to do board presentation,
00:30:44 --> 00:30:46 mind you, I was in FPNA, which means I helped
00:30:46 --> 00:30:49 prepare the slides for the CFO. I was in the
00:30:49 --> 00:30:51 room, but when you're the CFO, you don't have
00:30:51 --> 00:30:54 the same dynamics as when you just the financial
00:30:54 --> 00:30:56 analyst in the room. Because the eyes are more
00:30:56 --> 00:30:59 on you than the person that helps you with the
00:30:59 --> 00:31:02 slides. Because at the end of the day, it's you.
00:31:02 --> 00:31:07 Yeah. And I remember, gosh, PwC assignment early
00:31:07 --> 00:31:10 in my consulting career. I was working with a
00:31:10 --> 00:31:12 director who was on the verge of being promoted
00:31:12 --> 00:31:16 to partner. And Steve and I were going into a
00:31:16 --> 00:31:18 presentation with the client today. I'd put some
00:31:18 --> 00:31:22 slides together. and they were they were okay
00:31:22 --> 00:31:24 slides there's nothing wrong with the deck but
00:31:24 --> 00:31:27 then Steve came along and said okay Kevin let's
00:31:27 --> 00:31:30 just put these slides to one side for a minute
00:31:30 --> 00:31:33 and just ask three questions what do we want
00:31:33 --> 00:31:36 them to know and there's loads of what we want
00:31:36 --> 00:31:39 them to know in your deck but then how do we
00:31:39 --> 00:31:42 want them to feel a third question what do we
00:31:42 --> 00:31:46 want them to do okay and I think any time that
00:31:46 --> 00:31:50 you're presenting then that's the key difference.
00:31:50 --> 00:31:53 You're coming out of the FP &A team. You've got
00:31:53 --> 00:31:55 lots of stuff that you think people should know.
00:31:55 --> 00:31:57 You've got the numbers coming out of your ears.
00:31:57 --> 00:32:00 You can easily put loads and loads of clever
00:32:00 --> 00:32:04 pictures and slides together, the graphs and
00:32:04 --> 00:32:06 so on that show the business performance this
00:32:06 --> 00:32:07 month or what the forecast is going to be for
00:32:07 --> 00:32:11 next month will be great. You can wow them with
00:32:11 --> 00:32:13 lots and lots and lots of different things, but
00:32:13 --> 00:32:17 hang on a minute. The human brain is only actually
00:32:17 --> 00:32:19 capable of taking in three bits of information.
00:32:21 --> 00:32:23 One of the three things we want them to know
00:32:23 --> 00:32:27 this month. Of those three things, what do we
00:32:27 --> 00:32:31 want them to feel about them? Because if they
00:32:31 --> 00:32:35 don't feel in some way, if there's no emotion
00:32:35 --> 00:32:37 attached to it, why are you telling them in the
00:32:37 --> 00:32:40 first place? So the emotion is, oh, we're off
00:32:40 --> 00:32:44 target. Oh, look, if we do this... here's the
00:32:44 --> 00:32:46 consequence of it. There's gonna be no bonuses
00:32:46 --> 00:32:50 this year or something like that. Oh, so these
00:32:50 --> 00:32:53 are bonuses. So what do we want folk to do about
00:32:53 --> 00:32:58 that? That kind of story. So that's, I think
00:32:58 --> 00:33:02 that's the difference from helping prepare the
00:33:02 --> 00:33:04 deck where you're delving into all of the knowledge
00:33:04 --> 00:33:06 that you've got, you could populate with it.
00:33:06 --> 00:33:10 It's focusing on what story does this deck have
00:33:10 --> 00:33:16 to tell. Yeah, that's such a great way to put
00:33:16 --> 00:33:18 it. I was like, where were you two years ago?
00:33:19 --> 00:33:24 But anyway, I'm thinking about FDNA. So in the
00:33:24 --> 00:33:28 US, there is this kind of trend where there is
00:33:28 --> 00:33:31 more people becoming CFO from the FDNA route
00:33:31 --> 00:33:34 than the traditional CPA chartered account and
00:33:34 --> 00:33:35 route. I'm curious to hear if it's the same in
00:33:35 --> 00:33:38 the UK right now. I think it's similar. Yeah.
00:33:38 --> 00:33:43 Okay. CFO is CFO. It doesn't matter whether you're
00:33:43 --> 00:33:46 in the US, the UK or Australia. It really doesn't
00:33:46 --> 00:33:52 matter. And I think probably the biggest exposure
00:33:52 --> 00:33:55 you're going to get to the skills you need as
00:33:55 --> 00:33:58 CFO are probably coming out of that FP &A discipline.
00:33:59 --> 00:34:04 Not as much the A part, the analysis part, but
00:34:04 --> 00:34:08 a good FP &A team should be putting forecast
00:34:08 --> 00:34:11 together looking forwards, it's financial planning.
00:34:12 --> 00:34:17 And that's the real skill set that the CFO uniquely
00:34:17 --> 00:34:21 takes to the leadership team, takes to the board.
00:34:22 --> 00:34:26 It's the realistic forward view of where the
00:34:26 --> 00:34:31 business is going. I was talking to one of our
00:34:31 --> 00:34:36 mentors, Jeremy, this morning, and we... planning
00:34:36 --> 00:34:38 a workshop that we're going to run in a couple
00:34:38 --> 00:34:43 of weeks time. And it's going to be around, well
00:34:43 --> 00:34:47 it's around cash management fundamentally, but
00:34:47 --> 00:34:49 Jeremy related back and we're going to use this
00:34:49 --> 00:34:53 case study that's a real case study from Jeremy's
00:34:53 --> 00:34:56 past. He joined a company, CFO, they'd just gone
00:34:56 --> 00:34:59 through a big investment round and they'd got
00:34:59 --> 00:35:02 investors on board, they'd got banks on board
00:35:02 --> 00:35:07 with various covenants in place, and they've
00:35:07 --> 00:35:10 got fairly extensive financial models put together.
00:35:11 --> 00:35:13 Now, one of the first things Jeremy actually
00:35:13 --> 00:35:16 did was have a look at the financial models and
00:35:16 --> 00:35:18 actually did a little bit of putting his own
00:35:18 --> 00:35:21 financial model together, nowhere as much detail
00:35:21 --> 00:35:23 as the big one that had been put together for
00:35:23 --> 00:35:27 the fundraise. Jeremy realised very, very quickly
00:35:27 --> 00:35:29 that there was a fundamental flaw in the big
00:35:29 --> 00:35:34 model. and effectively he had to go into the
00:35:34 --> 00:35:37 position of saying some bad news to the board,
00:35:38 --> 00:35:41 to the investors and hey to the banks that said
00:35:41 --> 00:35:45 well look 12 months down the road we're likely
00:35:45 --> 00:35:47 to breach these covenants that you set up so
00:35:47 --> 00:35:49 look we're gonna have to do some serious work
00:35:49 --> 00:35:53 here to put this right. Now that's coming from
00:35:53 --> 00:35:56 the forward -looking side of the CFO the ability
00:35:56 --> 00:35:58 to talk to boards talk to investors the ability
00:35:58 --> 00:36:03 to deliver bad news and tell the story as is.
00:36:03 --> 00:36:07 But where did the ability to to articulate that
00:36:07 --> 00:36:09 come from? It's from a solid background in FP
00:36:09 --> 00:36:13 &A and financial modeling and so doing that sort
00:36:13 --> 00:36:19 of thing. CFO roles not about traditional financial
00:36:19 --> 00:36:21 accounting. It's not about putting the monthly
00:36:21 --> 00:36:23 result together, putting the annual result together.
00:36:23 --> 00:36:25 It really is about putting the business forecast
00:36:25 --> 00:36:29 together. Yeah, for where it's going and yet.
00:36:30 --> 00:36:32 dealing with bank covenants. You don't want,
00:36:32 --> 00:36:34 you want to stay ahead of these things. Like,
00:36:35 --> 00:36:41 yeah. Yeah. I'd say to any CFO who doesn't have
00:36:41 --> 00:36:46 a good FPNA background around, they, they need
00:36:46 --> 00:36:50 a resource within their team that is strong in
00:36:50 --> 00:36:54 FPNA that they can rely on to do that detailed
00:36:54 --> 00:36:57 forecasting because having that information is
00:36:57 --> 00:37:01 vital. Hey. If you're going to make the profit,
00:37:02 --> 00:37:04 if you've got a cash problem coming up in 12
00:37:04 --> 00:37:08 or 18 months time, one of your key roles as CFO
00:37:08 --> 00:37:11 is to tell the leadership team, tell the board
00:37:11 --> 00:37:17 that bad news as soon as possible. Yes. And say
00:37:17 --> 00:37:22 10 times. Yeah. Yeah. Yeah. And governance
00:37:22 --> 00:37:26 risk management should be in your DNA as well.
00:37:28 --> 00:37:31 That risk management, especially in this environment,
00:37:32 --> 00:37:34 right? Yes, there is AI, we all excited about
00:37:34 --> 00:37:37 what it can do, but what are the risks? There
00:37:37 --> 00:37:39 is so much volatility in the market, what are
00:37:39 --> 00:37:44 the risks? How are you able to zoom out to really
00:37:44 --> 00:37:49 understand your risk profile? and how things
00:37:49 --> 00:37:51 come at you from that perspective. Because I
00:37:51 --> 00:37:56 know you also help CFOs with their relationship
00:37:56 --> 00:37:59 with boards and CEOs and investors. So I'm curious
00:37:59 --> 00:38:02 to hear some of the go -to advice that you usually
00:38:02 --> 00:38:05 give them. And I'd say to start with, every company
00:38:05 --> 00:38:11 should have a decent risk register. OK. Even
00:38:11 --> 00:38:14 something the size of Grow CFO. We're not a huge
00:38:14 --> 00:38:17 organization. We learnt the importance of this
00:38:17 --> 00:38:19 just recently because we've just gone through
00:38:19 --> 00:38:22 an ISO 27001 registration. And that really made
00:38:22 --> 00:38:25 us focus on what are our information security
00:38:25 --> 00:38:29 risks? What could go wrong in this business?
00:38:29 --> 00:38:33 It's going to give us a problem. It went from
00:38:33 --> 00:38:35 basic information security risk. What would we
00:38:35 --> 00:38:38 do if we had a cyber attack? What would we do
00:38:38 --> 00:38:41 if we had some members of the team who were not
00:38:41 --> 00:38:45 fully team players and sabotaged something and
00:38:45 --> 00:38:47 made us thinking about a whole load of stuff
00:38:47 --> 00:38:51 around governance? Then that went into segregation
00:38:51 --> 00:38:55 of duties. Is that in place properly? What are
00:38:55 --> 00:38:57 the risks around here that we should be protecting
00:38:57 --> 00:39:01 against? And to be honest, we, from a finance
00:39:01 --> 00:39:05 background, or particularly myself coming out
00:39:05 --> 00:39:07 of a project background, we'd always be looking
00:39:07 --> 00:39:12 at risk on a project. We have the skills that
00:39:12 --> 00:39:17 we should be really owning risk. And if half
00:39:17 --> 00:39:20 of the CFO's job is partnering and looking forward,
00:39:21 --> 00:39:24 other half of CFO's job is what can go wrong?
00:39:24 --> 00:39:29 Yes, risk management. And doesn't mean to say
00:39:29 --> 00:39:32 that we've got to get rid of the risk. if it
00:39:32 --> 00:39:36 does go wrong, what would we do? Okay. What mitigations
00:39:36 --> 00:39:38 can we put in place to, to minimize the chances
00:39:38 --> 00:39:42 of it going wrong? If the, if the CFO is not
00:39:42 --> 00:39:47 doing that stuff, who is? I don't see it as anybody
00:39:47 --> 00:39:50 else's role. Yeah. I had another guest on the
00:39:50 --> 00:39:52 podcast too. She said when something doesn't
00:39:52 --> 00:39:56 fit quite well, it sits under the CFO. Well,
00:39:56 --> 00:39:58 that's a classic. And that's the other thing
00:39:58 --> 00:40:01 is we're looking at kind of that move from head
00:40:01 --> 00:40:04 of finance or head of FP &A and you suddenly
00:40:04 --> 00:40:08 take on the CFO role. Oh, I'm running the legal
00:40:08 --> 00:40:10 team now. I don't know anything about running
00:40:10 --> 00:40:14 the legal team. Yep. Classically, the CFO gets
00:40:14 --> 00:40:17 to run everything that nobody else wants to do.
00:40:18 --> 00:40:26 Yes. And expected gifts. Because the accounts
00:40:26 --> 00:40:29 payable function falls under the CFO. Suddenly
00:40:29 --> 00:40:33 the CFO is looking after procurement. Yeah, I'm
00:40:33 --> 00:40:39 doing it. Looking after actually buying stuff
00:40:39 --> 00:40:41 versus processing the purchase order and paying
00:40:41 --> 00:40:48 the bill. Again. You know, as you go into procurement,
00:40:48 --> 00:40:50 there's all those skills around negotiation,
00:40:50 --> 00:40:53 best price, best supplier, but then there's a
00:40:53 --> 00:40:55 whole lot of risk in there. Is this the right
00:40:55 --> 00:40:58 supplier to deal with? Is the right supply chain
00:40:58 --> 00:41:04 secure? Yeah. What happens if the supplier goes
00:41:04 --> 00:41:08 under? No, and we're probably used to looking
00:41:08 --> 00:41:11 at risk as far as customers are concerned because
00:41:11 --> 00:41:14 we Nearly always be asked in finance to be there
00:41:14 --> 00:41:18 the custodian of credit worthiness of the customer
00:41:18 --> 00:41:20 Mm -hmm, so we flip that round. There's just
00:41:20 --> 00:41:26 as much risk around suppliers Yeah, yes I think
00:41:26 --> 00:41:30 now with with with tariffs and there is a lot
00:41:30 --> 00:41:32 there is a lot going on especially in risk I
00:41:32 --> 00:41:34 wanted to go back to what would you recommend
00:41:34 --> 00:41:37 especially to a CFO in their first 90 days when
00:41:37 --> 00:41:41 it comes to establishing and understanding that
00:41:41 --> 00:41:44 risk register like how would you define it first
00:41:44 --> 00:41:48 but what would you say they should be doing in
00:41:48 --> 00:41:51 those first 90 days when it comes to risk when
00:41:51 --> 00:41:54 it comes to risk gosh The first 90 days is all
00:41:54 --> 00:42:01 about understanding the company. I actually cover
00:42:01 --> 00:42:05 that first 90 days as CFO in Module 9 of our
00:42:05 --> 00:42:08 Future CFO program. We actually go through how
00:42:08 --> 00:42:11 do you make an impact in the first 100 days,
00:42:11 --> 00:42:17 but no, it is 90. And don't really go into risks
00:42:17 --> 00:42:24 specifically in that. But understanding the risks
00:42:24 --> 00:42:28 is a product of what you do. A lot of your time
00:42:28 --> 00:42:33 should be spent fact finding. And one of the
00:42:33 --> 00:42:35 things that I recommend is sometimes during the
00:42:35 --> 00:42:39 first 30 days, get your team together, possibly
00:42:39 --> 00:42:42 take them off site. Have a decent workshop where
00:42:42 --> 00:42:46 you kind of brainstorm what doesn't work around
00:42:46 --> 00:42:51 here. You're getting towards risk. It's you want
00:42:51 --> 00:42:55 to find out where are the systems broken? Where
00:42:55 --> 00:42:58 do we have big workarounds to make things happen?
00:42:58 --> 00:43:00 Where are the relationships with other teams
00:43:00 --> 00:43:02 a little bit broken? There's a whole load of
00:43:02 --> 00:43:04 things that you should be coming out of that
00:43:04 --> 00:43:08 workshop with a big wish list of here's what
00:43:08 --> 00:43:11 needs fixing. Okay, as a big element of risk
00:43:11 --> 00:43:17 in there, you probably as in that. first period
00:43:17 --> 00:43:21 as well. You should be talking to as many people
00:43:21 --> 00:43:25 across the business, not your own team. And I
00:43:25 --> 00:43:28 counsel people to start putting together something
00:43:28 --> 00:43:31 that's just as simple as a SWOT analysis. Strengths,
00:43:31 --> 00:43:35 weaknesses, opportunities, threats. Start putting
00:43:35 --> 00:43:37 it together yourself before you take the role.
00:43:37 --> 00:43:40 You've got that period after you've given notice
00:43:40 --> 00:43:43 in your old job to the day one in year. New job.
00:43:43 --> 00:43:46 Well, start doing some research. Start filling
00:43:46 --> 00:43:48 it in. What do you think the strengths and the
00:43:48 --> 00:43:50 weaknesses and the opportunities and the threats
00:43:50 --> 00:43:52 are around this new business that you're joining?
00:43:52 --> 00:43:56 Now, kind of use that. Have it in your back pocket
00:43:56 --> 00:44:00 as you're talking to your new peers as you meet
00:44:00 --> 00:44:04 them. So you're going in, you're seeing the CMO.
00:44:04 --> 00:44:07 OK, CMO. What do you think the opportunities
00:44:07 --> 00:44:10 are in the business? What do you think the threats
00:44:10 --> 00:44:12 are? What's the competition going to do? And
00:44:12 --> 00:44:14 that's going to be, first of all, it's going
00:44:14 --> 00:44:18 to be backing up or contradicting what you've
00:44:18 --> 00:44:19 thought yourself. It's going to give you a different
00:44:19 --> 00:44:23 view, but it should be crystallizing. What are
00:44:23 --> 00:44:25 the real strengths and weaknesses around here?
00:44:25 --> 00:44:29 All of SWOT ends up being in some ways things
00:44:29 --> 00:44:31 that you could be putting on that risk register.
00:44:32 --> 00:44:37 So the first 90 days, I think is all about building
00:44:37 --> 00:44:40 up that business understanding. Okay, it's much
00:44:40 --> 00:44:42 wider than putting a risk rate just near that.
00:44:43 --> 00:44:45 I actually recommend as well another couple of
00:44:45 --> 00:44:49 strategy tools you can take and do in that period
00:44:49 --> 00:44:52 before you join the company. Now, quarters for
00:44:52 --> 00:44:55 resources. What are the forces at play around
00:44:55 --> 00:45:00 this business? What's the pressure coming in
00:45:00 --> 00:45:03 from customers? What's the pressure coming in
00:45:03 --> 00:45:06 from suppliers? What's the risk of substitution?
00:45:06 --> 00:45:09 What's the risk of new entries into the market?
00:45:09 --> 00:45:12 Now, if you understand that from a strategy point
00:45:12 --> 00:45:16 of view, Porter's Five Forces, you go a long
00:45:16 --> 00:45:20 way to being able A, to be the good strategic
00:45:20 --> 00:45:24 advisor, but B, know the flip side of all of
00:45:24 --> 00:45:27 that, understanding those forces is aware of
00:45:27 --> 00:45:31 the risks. I love it because that's something
00:45:31 --> 00:45:34 I always that I actually realize and I've been
00:45:34 --> 00:45:38 saying always to a lot of people. You have to
00:45:38 --> 00:45:42 treat the. 30 days before the 90 days as important
00:45:42 --> 00:45:44 than the 90 days like the 30 days before the
00:45:44 --> 00:45:47 first 90 days is so important like you said the
00:45:47 --> 00:45:50 time between you you did a notice of your old
00:45:50 --> 00:45:52 place and where you're going next to do what
00:45:52 --> 00:45:55 you just said do the SWOT analysis yourself the
00:45:55 --> 00:45:58 PESTEL analysis the Porter's five forces all
00:45:58 --> 00:46:00 these things really prep you into what you're
00:46:00 --> 00:46:03 going into yeah and PESTEL did you just mention
00:46:03 --> 00:46:04 that's another good one that's the third one
00:46:04 --> 00:46:08 that i would use as well It's a great way of
00:46:08 --> 00:46:10 just saying what's going on, not in this business,
00:46:10 --> 00:46:14 but outside this business. What are the political
00:46:14 --> 00:46:16 factors that are going to hit us and the industry?
00:46:16 --> 00:46:19 What are the economic factors, social factors,
00:46:20 --> 00:46:22 technological factors? And technology is a big
00:46:22 --> 00:46:24 one at the moment because it's changing so fast.
00:46:25 --> 00:46:29 Legal, what's out there? Can legislation change
00:46:29 --> 00:46:32 and do something? That's a particular one to
00:46:32 --> 00:46:36 look at if you're in a regulated industry. Environmental
00:46:36 --> 00:46:38 is always a big one. How are the environmental
00:46:38 --> 00:46:41 factors going to come and hit us? So coming out
00:46:41 --> 00:46:45 of those six factors in a PESL analysis are a
00:46:45 --> 00:46:48 lot of risks. Yes. A lot of opportunities as
00:46:48 --> 00:46:54 well. Yes. Yes. Yes. Oh gosh. Thank you so much.
00:46:54 --> 00:46:55 I know we didn't get a chance to really touch
00:46:55 --> 00:46:58 on AI. You probably have to come back another
00:46:58 --> 00:47:00 time. I come back and talk about AI. We're doing
00:47:00 --> 00:47:04 so much on AI at the moment. Actually, our tech
00:47:04 --> 00:47:07 theme in Grow CFO this quarter, quarter one,
00:47:08 --> 00:47:12 is we're looking at AI native apps. Okay. As
00:47:12 --> 00:47:15 opposed to the traditional apps that have bolted
00:47:15 --> 00:47:20 some AI on. The patchwork. Yeah. there's, there's
00:47:20 --> 00:47:24 a, it's a little bit like when cloud accounting
00:47:24 --> 00:47:27 first came out, everybody had started off with
00:47:27 --> 00:47:30 an on -premise solution and all those on -premise
00:47:30 --> 00:47:32 solutions started to pretend they were cloud
00:47:32 --> 00:47:35 solutions when they weren't. Yes, there was still
00:47:35 --> 00:47:40 sitting somewhere. Yeah. Yeah. So thank you so
00:47:40 --> 00:47:41 much. Very interesting. So we will have another
00:47:41 --> 00:47:44 conversation about AI at some point of us. Yeah.
00:47:44 --> 00:47:48 Oh yeah. Oh yeah. It's a podcast in itself. Oh
00:47:48 --> 00:47:52 gosh. You know, I still need more training on
00:47:52 --> 00:47:56 that. So thank you so, so much for being, I always
00:47:56 --> 00:47:58 like to end with something to understand what
00:47:58 --> 00:48:02 you like to do outside of work, besides all these
00:48:02 --> 00:48:07 mentoring and numbers and leadership. Well, I've
00:48:07 --> 00:48:11 got a under the desk. I've got a Labrador fast
00:48:11 --> 00:48:15 asleep because just before we started recording,
00:48:15 --> 00:48:18 I used my lunch hour to go and. take both dogs,
00:48:18 --> 00:48:21 Labrador and Spaniel, take them out for a decent
00:48:21 --> 00:48:23 length walk, and they're both shattered now.
00:48:23 --> 00:48:25 Spaniel's been locked in his crate because he's
00:48:25 --> 00:48:27 also soaking wet, he decided to go for a swim.
00:48:29 --> 00:48:32 What else keeps me busy out of work? Well, in
00:48:32 --> 00:48:35 up in the in the attic of the house, there is
00:48:35 --> 00:48:38 a big model railway. Sorry, that's railroad for
00:48:38 --> 00:48:44 you US listeners. Yeah. Football, Newcastle United.
00:48:44 --> 00:48:47 Oh, sorry. That's soccer for you. I'm a big soccer
00:48:47 --> 00:48:51 fan. Yeah, I'm a big soccer fan. Did you watch
00:48:51 --> 00:48:54 the game? Barcelona, Real Madrid. I don't know
00:48:54 --> 00:48:58 if you're into that, but I didn't. But hey, we
00:48:58 --> 00:49:03 played. My team is Newcastle United and our first
00:49:03 --> 00:49:05 match in the Champions League this season was
00:49:05 --> 00:49:10 against Barcelona. Unfortunately. but hey we're
00:49:10 --> 00:49:13 playing PSV Eindhoven next week and our final
00:49:13 --> 00:49:17 game is against PSG Paris Saint -Germain. Wow
00:49:17 --> 00:49:19 you know PSG has been on the straight now we'll
00:49:19 --> 00:49:23 see how it goes. Yeah so they'll be winning since
00:49:23 --> 00:49:30 Kylian Mbappe left. Now last time we were in
00:49:30 --> 00:49:34 the Champions League Mbappe was playing and we
00:49:34 --> 00:49:40 beat them 3 -0 at home. Yep. Oh, it's so good
00:49:40 --> 00:49:42 to always talk to other soccer fan, football
00:49:42 --> 00:49:44 fan. Yeah, that was one of the adjustments to
00:49:44 --> 00:49:46 when I came to the US and they were like, this
00:49:46 --> 00:49:48 is football. I'm like, no, soccer. I'm like,
00:49:48 --> 00:49:53 mm -mm. What is soccer? It's football. And on
00:49:53 --> 00:49:56 my other podcast, The Next Hundred Days, Graham,
00:49:56 --> 00:50:00 my co -host, is a huge Leeds United fan. So we
00:50:00 --> 00:50:03 end up digressing into football frequently on
00:50:03 --> 00:50:08 the podcast. It is so fun though. Well, thank
00:50:08 --> 00:50:11 you. Thank you so much for being on the show.
00:50:11 --> 00:50:14 It was such a joy to have you, Kevin. Thank you
00:50:14 --> 00:50:18 very much. Thoroughly enjoyed it. Awesome. Another
00:50:18 --> 00:50:21 episode of the diary of a CFO. I hope you find
00:50:21 --> 00:50:24 unique insight from Kevin that you can apply
00:50:24 --> 00:50:27 right away in your career So if you enjoy this
00:50:27 --> 00:50:29 whole conversation, please subscribe to the show
00:50:29 --> 00:50:32 on Apple podcast Spotify and YouTube and wherever
00:50:32 --> 00:50:36 you find us Please leave us a review. It really
00:50:36 --> 00:50:39 makes a big difference in helping other leaders
00:50:39 --> 00:50:42 Find us now if you want to go deeper whether
00:50:42 --> 00:50:45 your current CFO or your aspiring CFO head over
00:50:45 --> 00:50:48 to the diary of a CFO that comes where you'll
00:50:48 --> 00:50:51 find the show notes, key takeaways, and also
00:50:51 --> 00:50:53 the links to the resources we mentioned today.
00:50:54 --> 00:50:57 Also, if you got a question or a guest suggestion
00:50:57 --> 00:51:00 you would like to make, send an email at ask
00:51:00 --> 00:51:04 at the diary of a CFO .com. Coming up next is
00:51:04 --> 00:51:07 an interview with Julian Averell, a CFO in the
00:51:07 --> 00:51:10 life science industry who walk us through how
00:51:10 --> 00:51:13 startup funding works from series A, B, and C
00:51:13 --> 00:51:17 all the way to IPO. You do not want to miss it.
00:51:17 --> 00:51:18 See you next time.