The First‑Time CFO Playbook: The First 90 Days, Imposter Syndrome and Leading the Business

TRANSCRIPT

[00:00:00] What do you think is the real difference between a good team and a great one? It probably comes down to business partnering. When you hear all these CFOs coming in through your program, like what keeps them up at night? Like what do they struggle the most with? The new CFO will certainly have imposter syndrome.

What have you seen really help people make that transition between what they learned in school and where they need to be? That is a $6 million question. Welcome to the Diary of a CFO podcast. I'm Wassia Kamon, your host. I'm the CFO with a background in accounting and FPNA and I started this show to talk about what leading finance really looks like and what it takes to become CFO.

Each week we explore how today's top finance leaders build high performance teams, partner with CEOs and boards, and lead through growth and transformation, hopefully without burning out in the process. Today I'm super delighted to have with me Kevin Appleby. Kevin is a rockstar. Kevin Appleby is a chartered [00:01:00] accountant, COO and strategy mentor at Grow CFO, and someone who's spent 25 years in management consulting, helping finance leaders step up.

He's been a divisional CFOA transformation consultant at PWC and now mentors CFOs through the messy transition from number cruncher to strategic leader. He also hosts. The Grow CFO Show and the next 100 days podcast. In this conversation we get into what actually separates good finance teams from great how to develop real business partnering skills, and how to deal with the imposter syndrome that hits almost every new CFO, gosh.

Yeah. Thank you for that introduction. Wow. Yes. I must go along and meet this rockstar sometime. Yes, yes. I'm super excited to have you with me. I know I've been on your podcast twice, maybe three times already. Yeah, twice, yes. Yeah, and so it feels so good to be on the other side now that I get to interview you.

And it's very strange being on the other side. I mean, on that, uh, 5, 4, 3, 2, 1. Countdown started in [00:02:00] Riverside. I was about to say hello and welcome to the gross CFO Show.

Well welcome to the diagram of a CFO podcast. So I'm really curious to dive in because you have so much experience and develop so many frameworks. Around what it takes to turn a good finance team into a great finance team. So when you look at finance teams today, what do you think is the real difference between a good team and a great one?

I think it probably comes down to business partnering. Mm. I think back to. That kind of divisional CFO role that I was doing in the chemical industry. Mm-hmm. And no, if I was going back and saying to my. Younger self, what should I have been doing different. Mm-hmm. It's definitely much more business partnering.

It was a business partnering role, but it was very much about putting the monthly result [00:03:00] together, presenting the monthly result to the business team, helping them through the budget rounds and things like that. Um, yes, those are the standard things. Every finance team should be doing and explaining the result and telling the story.

But I think what makes the real difference is rather than, you know, kind of their every month and say, here's the sales number, here's the profit number, here's the differences, here's why we're off budget to, at which point I think a lot of business teams actually switch off. Mm-hmm. I think the really good finance team know all the individuals in it, know what is keeping there.

Internal customer within the business, awake at night. They know the issues and problems that they're going through, and they're there to support and advise and help with those real business problems as opposed to just constantly talking about the financial result. Wow. That is so true. I like how you say they usually [00:04:00] switch off 'cause it feels like, okay, I, I understand I'm off Then what?

Mm-hmm. So what do you think is holding, um, tend to hold those otherwise good financing back? Like, I know there is a lot of literature around business partnering, a lot of, um, you know, courses and talk and articles around it, but in your experience, what have you seen are some of the things that hold people back from being those true business partners?

It's a practical skill. You've gotta learn through experience and find. There are books, there are articles. There are courses. It's not, head knowledge is part of it, but. Actually practicing it is the difference. Mm-hmm. And one of the things we run in Grow CFO is the Business Partnering Bootcamp. Um, now any of our grow CFO members can sign up and do one of, or the whole series of modules should they want to.

Mm-hmm. And. The, the [00:05:00] reason that that's different is because we're trying to do practical stuff that you can attend a two hour webinar workshop, learn some stuff, and you can put it into practice mm-hmm. The next day. Mm-hmm. And that's the bit that a lot of, a lot of training in this is missing. No, it's fine.

Having the head knowledge, it's fine knowing what you should do. You've actually gotta go out there and do it. No, a good course, if you've got a A session every week in a business partnering bootcamp like that, you should be setting homework each session, stuff that people guide out and doing practice in the business.

It's changing your own behavior. Turns you into a good business partner. Mm-hmm. Yeah. Learning how to tell a story is one very important skill. Learning how to ask questions is another important skill. Why is the [00:06:00] marketing budget overspent this month by 50%? Well, we can go do the variance analysis and we can see that we, what we've spent extra on.

Mm-hmm. So what. The question you've gotta ask is why. And normally you've gotta ask that why question about seven times to get to know what it is. And the, the first thing, why is this budget overspent? The first thing is, oh, we spend twice as much with that supplier as normal. Why have we spent twice as much as normal?

Oh, well, they were putting these two or three extra presentations together for us. Why were they doing that? Oh, well, we've got this new campaign and so on and so on. To actually understand the number. Just asking the why question once isn't enough. No, true finance should be then. No. The sixth or the seventh why question to get to the real truth and should be interpreting that into the story that they're telling about the results.

And it could be that, well, fine, we're [00:07:00] over budget. Great because of this doesn't matter. That's part of the business plan now. And it wasn't in the original budget. Mm-hmm. Oh, you've been doing all of this stuff. Why are we doing that? Is the other way of approaching that. Are we sure we should be doing that?

And that's, that's kind of finance. Policing it a little bit because you, you are responsible to some extent on hitting those financial results. Mm-hmm. So a good business partner should be having that dialogue all the time. Also, the business team will come along and ask for help. Hopefully. What would you recommend now?

Or we want to do this, what do you think? And finance gets an awful reputation of saying no in such circumstances. Yes. And a good business partner wouldn't be saying no. It would be, well, we've, we've got these three options. Here are the pros and cons of each. Let's work out what we should do Now, it should be supporting the business [00:08:00] with insight.

Practical alternatives and good solid reasoning of what's the best thing to do. Wow. I, I like first how you said you have to ask why multiple times, because sometimes the first why tends to be met with people being on the defensive side. Like, am I getting in trouble? And like you said, the more you dig into it, you get to get that better understanding.

Now, I'm curious for CFO, especially CFOs who feel like they have like great teams, like how do they, beyond just the, the programs or the courses, how do they expose their team and get them to work on those business partnering skills from the, from that seat? How'd you get them to do it? Well, I think first of all, you've gotta give them responsibility.

You need to be exposed to doing it to learn how to do it, so, mm-hmm. It's, it's effectively knowing the balance, I think was, yeah. Okay. You don't throw people in the deep end and let [00:09:00] them sort of splash about and potentially drown. You've gotta give them enough leeway to learn and gain experience without leaving folk exposed.

Okay. So it's delegating, it's delegating the right amount of responsibility, authorities not delegating tasks. It's delegating a, a responsibility for doing things. And one way I think of doing the business partnering piece quite well is, is giving people project exposure. Oh, you are the finance team member on this business project and getting them involved in the project beyond just recording the, the financial numbers on the project.

Get them involved in the decisions and the day-to-day project management that gets them more involved in the practical stuff that's going on the ground in that. [00:10:00] Some of the responsibilities of project manager can quite easily fall on finance. Yeah, the risk register for the project. Great place to get the finance person involved.

Now. Recording the risks, working out whether this is high, medium, or low. Working out with the rest of the project team. Hey, we've got this risk. How are we gonna mitigate it? And very much more working together with the team than just being there to be the scorekeeper. That's amazing. And I like, I I want to dive a little more into this idea of risk management co.

'cause I, 'cause you're a chartered accountant. I'm a CPA and I can say confidently that throughout our regular curriculum we don't really talk about risk or strategy. Like it's not, it's, it's not like topics that are really. You know, that are really explored in those programs. So you come out of school and you get to a point and you're like, okay, my, you know, I'm not too comfortable around [00:11:00] learning about risk or managing risk, about talking about strategy, seeing the bigger picture.

And you mentor a lot of CFOs, a lot of. Finance leaders who want to become CFOs, what have you seen really help people make that transition between what they learned in school and what they ha where they need to be to be driving their career? That, that, that is a $6 million question. Yes, there, there is one of the biggest problem as you come, come through the ranks and become a senior finance leader, CFO.

Mm. You are required to do a whole load of stuff that nobody ever told you, told you how to do to pass your exams. Yes. Go. Goes back to some history or what did the traditionally, what did a Chartered accountant or A CPA do? We were auditors. Mm. We were bookkeepers. We were either [00:12:00] putting together the published accounts of the company mm-hmm.

Or we were auditing them. So no, all our skills are based around double entry. True. And Fairview. Everything's based around looking backwards. Mm-hmm. Because we were historically accounting. Mm-hmm. First thing, as you are in the. CFO Oh, in the financing industry role is okay. Yeah. There's gonna be the bookkeeping team, there's gonna be accounts payable, there's gonna be accounts receivable, but where does it really happen?

It's the the fp and a people, the CFO and so on. 'cause you've gotta start looking forward. Okay? You've gotta start. Knowing what the future looks like, you've gotta start being able to put scenarios together and look at what their, what the financial implications might be. Means you've gotta make a whole load of assumptions to put those models together or forecast.

All budgets are based on a whole pile [00:13:00] of assumptions. There's where good business partnering comes in as well. Because if I'm putting together a financial model or a, a budget or a s. The, the finances behind the strategy. No. The rest of the business isn't gonna accept those, if they're my assumptions.

You've gotta get the assumptions owned by the business. Mm-hmm. That is a very, very key part of, of moving into this, this higher place now, being really part of the business team, understanding what the business is all about. And being able to jointly make those reasonable assumptions going forwards about what, what is it we're forecasting?

What is it we're modeling? What are the options available to us? How do you learn it? Gosh, that's a difficult question because you certainly didn't learn it to pass your exams. You're picking this stuff on the way through. Yeah. You're, you're learning by experience. [00:14:00] Um, you'll learn. I, I think a key way of, of learning is, you know.

Watching your peers, watching your seniors as you are going through and developing your career. If you are number two in finance, you are working for a great CFO. Watch and learn. Mm-hmm. I also think there's a big part for mentoring in this. Mm. And certainly one of the things we find a new CFO will have is, is probably a whole load of imposter syndrome, a whole load of lack of confidence, and a whole load of, well, never done this before.

What exactly do I do? Um, so gross, CFO, we do a huge amount of one-on-one mentoring of those people. Uh, we've got a big pool of mentors now we've got. Probably over 30 scattered across the globe. Wow. Scattered across various, um, diverse communities, scattered [00:15:00] across various industries. So the idea is you pick a mentor that mm-hmm.

You could chemistry with mm-hmm. And you can get on with, but they, the idea of that mentor is they've been there, done it, and got the t-shirt. So unlike a business coach who will sit you down and sort of ask you to solve your own problem by asking you some questions, the mentor is more likely to come and say, Hmm, yeah, I had something similar to that once.

Mm-hmm. I did X. Mm-hmm. Yeah. And XX worked or, yeah, I did what you are thinking you're doing, and it didn't work. We need to think between us of, of what else we can do. Uh, so that practical level of help really comes in. Mm-hmm. You know, we've got, uh, the CFO program as well that's, that's doing group mentoring across 12 months, along with, you know, two hour work workshops every month, and particular themes to really try to skill new [00:16:00] CFOs up in all of the areas they're gonna come into touch with, because.

You've been the internal face of finance. You've been doing the monthly reporting all your career. You've been looking at spreadsheets. You've probably been doing some business partnering with the rest of the business internally. Hang on. Suddenly you're the external face of finance. Yes. You are. Where the buck stops for a start.

There's nobody else in finance at your level where you're probably used to having a few peers around the place, and you are the one that's part of the leadership team. You are the one that's reporting into the board. Mm-hmm. You are dealing with the investors. Mm-hmm. You are dealing with customers, you're dealing with suppliers.

Mm-hmm. And somebody else has their nose in the Excel spreadsheet that you were used to spending 50, 60% of your time doing earlier in your career. Mm-hmm. Yeah, we are all brought up to be number crunchers to a certain [00:17:00] extent, and the role of CFO has got nothing to do with number crunching. You've probably got somebody else doing that for you.

I mean, you can't even, you may want to, there is no way. Yeah. And there's an element that, that we delve back in or dig back into our comfort zone. Well, we love doing things. Yes. Yes. I remember when I first became CFO, um, there was a big conference, it's called OFN, in that industry. And I went with that.

C-O-O-C-O-O, uh, C-E-O-C-O-O. And I think our, we, we had a few people coming in and out, but. It was a lot of talk with potential funders, investment business opportunities, and by the end I was like, I just wanna be at my desk on my in front of a spreadsheet and I'm an extrovert. That tells you, yeah, it takes a lot.

It does, it does. So I'm curious, when you hear all these CFOs coming in through your program, like what keeps them [00:18:00] up at night? Like what do they struggle the most with? Gosh, the new CFO. We will certainly have imposter syndrome. Okay. It's, it's almost certain and they, they will think, oh, I'm gonna be found out.

That's essentially what imposter syndrome is. I don't have the ability to do this job. I'm gonna be found out, well hang on, it's a load of rubbish 'cause somebody promoted you into that job 'cause they thought you could do it. Mm-hmm. You just simply haven't realized it yourself. Yeah, you're faced with all this new stuff and all these doubts and worries about it, but hang on, look back.

At the rest of your career, are you really being asked to do anything that's that much different from what you've done in the past? Okay, fine. You are having to business partner with the CEO. Yeah, that's different. It's putting you on a different level, but then look at how many other people in the past have you had a business partnering [00:19:00] relationship with successfully.

Oh, you are gonna have to get involved in these projects, these strategy things. Well, no, you've probably done some of that at a lower level, and there's this, this worry that, well, I just haven't done this before. You know, if you, if you actually look back over your career and look at all of your successes.

Suddenly you realize, yeah, you've done a lot of stuff. You've done all of the stuff that's necessary for this role. You just haven't done it in this environment, and that's how you can overcome it. I think that one, that one keeps a lot of new CFOs awake at night. Okay. Okay. And I love how you put it, like the best way to overcome it, like you said, is to reflect on what got you to that level.

Yeah. And you're out. Lovely Sunny day. On a hike, you've got this great big hill in front of you and you start walking and you walk along and you've done fair bit of stuff, and then suddenly you've got this final incline to get across. [00:20:00] Now that looks like a big struggle. Mm-hmm. And turn around, look backwards, and you realize the view, looking backwards, how far you've climbed so far, all the stuff you've done, it's that sort of thing.

No, yeah. As you are looking forward, it looks as though you've got a lot of work to do. Turn around and look backwards and realize what you've done already. Mm-hmm. Yeah. Yeah. And that's such a great exercise to do. Like not just physically, but you know, even as we go through our career to take, to take some time and reflect on how far we've come.

Because it does give you, um, it helps you stay grounded for what's ahead. Yeah, for sure. And one of the things that I, our head of mentoring Gross o Catherine Clark, actually recommends keeping a success. Diary, Uhhuh, write down in your success diary everything you achieve, and when you're feeling a bit of this imposter syndrome, go back and have a look at the list.

Nice. [00:21:00] Nice. Yeah. 'cause we tend to forget. I mean, time flies. Yeah. There's so many things going on that That's such a great advice. Thanks for sharing. Yeah. And even sit down at the end of probably each week's a bit much, but each month. Mm-hmm. One of my successes this month, stick 'em in the success diary. I look very, very quickly.

I've quite a big list. Oh yeah. I'm sure. Yeah. Now I'm curious. Yeah, go ahead. Another one is you, you can put together a list of. Here's what I think I've achieved. Mm-hmm. Put it together yourself, then give it to some of your peers and say, so what I've achieved, what do you think? You'll suddenly find that they come back with some feedback and the list's twice as big as you thought it was.

Wow. Nice. That is nice. Well, you hope it'll be twice, but Yeah, that's very true. 'cause I feel like we're sometimes so hard on ourselves. Yeah, we are. We're hard on ourselves. We're the last people to, to recognize, uh, what we've done, what we've accomplished. Uhhuh you put a list [00:22:00] together of what you've accomplished and then give it to.

One of your team was here. I bet they put a few other things on the list that you hadn't even thought of. Oh, that's such a great, I'm so doing it. Thank you, Kevin. I'm still doing it. Um, and now I'm curious though, um, 'cause like you said, we, we come through the rank. Um, there's a lot of things we have to, to learn by that.

The only experience will help. Mentorship of course, helps a lot having the courses. Yes. But I feel like now the CFO role has evolved so much. Yeah, it's a lot. And technology, pressure from the board, pressure for people for you to implement AI transformation. Like how do you navigate the actual weight of the role?

Oh, good grief. That's a very good question. How do you navigate the weight of the role? Well, I mean. In gross CFO, before AI even came along, we had [00:23:00] the CFO Competency Framework. And now anybody listening to this, you can go along to our website@grosscfo.net and you can take the Competency framework free of charge it, give you a big PDF report about your skills and competencies if you do, and compare them to your peer group.

But as, as we put that together, we realized there were nine competencies. Then we broke each competency down into five skills. Simple maths, nine competencies, five skills in each. That's 45 skills that A CFO could have ranging from, you know, the, the governance, the traditional roles like that through to strategy, through to change management, through to mergers and acquisitions, transactions, business exits for fundraising, the soft skills of storytelling, and so on.

Huge, huge number. And now the first thing you've gotta recognize is you'll never master all 45. [00:24:00] Yes. And I think if you start saying that I have got to be absolutely great in everything, all you will do is beat yourself up. Mm, you need to focus on the ones that are most important for the role that you're doing.

Like if, if I take the competency framework, um, we've got one competency to call a catalyst for change. Now 25 years, a management consultant, my skillset around that comes out very high. Way, way higher than the peer group. But I then answer the questions that are around, um, fundraising m and a and so on, and I find that my skill set is very, very weak.

I've learned a lot through reviewing and putting together some of our courses in that area, but I've never done any of it in practice. Mm-hmm. And I don't intend doing any of it in practice. So the skill area is, is weak, but I don't feel any problem with that. 'cause I don't recognize it [00:25:00] being relevant to the.

The sort of role that I wanna do, and I think, mm, one of the key things that I would say to anybody is what sort of CFO do you want to be? And work on the skills and competencies that are important to that. And I think there are broadly three sorts of CFO. Okay. You might be a bit of a blend of all three, but there is the, the business partnering CFO, where you are very much the strategist.

You are the co-pilot with the CEO and you're very much into planning and strategizing and looking to the future. Mm-hmm. Then there's the operational CFO. Operational. CFO is much more, much more probably one, the, the skill sets that I think I've got most, and that's around transforming stuff around business improvement and much more of a change management.

Um, understanding the cost of stuff, being able [00:26:00] to take cost outta the business, all fits in there. Then there's the Wall Street, CFO. Who would be the real specialist in going raising funds? Mm-hmm. Taking businesses through mergers, acquisitions, taking businesses through exits, and that that's a very, very different set of skills.

Mm-hmm. Which one do you wanna be? Okay. If you wanna be in the strategy space? Well, you can surround yourself with one or two very good people who can do the business transformation piece. If you know that you are going from that role into some sort of major transaction, well, there are lots of third party advisors you can bring on board to, to help with your own lack of skills in that area.

Mm-hmm. Why would you be highly skilled in that particular area, if you're possibly gonna do it once or twice in your career? Mm-hmm. Might be other CFOs who think, well, I'm gonna jump from company to company because I love this stuff. I love being involved in raising funds [00:27:00] and so on. You find a lot of fractionals actually in that space.

Mm-hmm. So they'll come on board to help smaller companies through their, their very first fundraising round, or they'd be on board to help them through a, an exit phase. Mm-hmm. Yeah. Wow. Yeah. But no, AI and transforming things are. I don't think anybody's properly got their head around that one yet. Once, yeah.

Well AI I think right now is the hype. I, it, it's, it's a lot of hype. But I, before we get to ai, 'cause we'll probably spend one hour just on ai. Yeah. I wanted to go back to what you said about. How you have the competency framework. I did take it a couple years ago and yes, some, some areas I was very strong.

Some areas I was like, what the heck? And I became a CFO. Still, like you said, there is no one size fits all and I like how you broke down between the different, the three different. Roles, the three different types of CFOs because you realize every company needs a different type of CFO at different times, [00:28:00] right?

Whether it's to the maturity stage where they may need that Wall Street CFO first, and then after that they'll likely need the operational CFO. Yeah. To be able to put those, uh, all these operationalize all the things that needs to happen to get to the mm-hmm. Exactly. The bigger stage. But also it means for A CFO, that's even within that same company going through all the phases that they can hire other people to get that kind of things done.

But it's recognizing that you don't have to do it all, and that by itself is freeing. Yeah. And we put that framework together originally for our future CFO program, so. The, the community that would were joining us because they were maybe a couple of years away from that CFO role. Mm-hmm. So we put the framework together initially to give those folk an idea of where their skills were and the areas perhaps they should think about focusing on improving in the next couple of years.

[00:29:00] And a lot of people were quite shocked by the number of gaps they had when they took that and. One of the things that that's come out is that, yes, you can improve some things, you can get yourself into a better position, but nobody isn't usually ready when they take the first CFO role. Yes. Yeah. Okay, and why, why is that?

Let's say it's because a certain amount of those skills that you need to do the job. You've got to learn in practice. Mm-hmm. How do I go deal with the investor as a CFO? Mm-hmm. You can't learn that from a textbook. No. You learn how to deal with the investor by actually going, dealing with the investor.

True. Okay. So you are, you are never going to be a hundred percent ready when you take your first CFO job. Agree. Also, 1000. Think about your own personal development. You know, [00:30:00] if you take a job on that on day one, you are 100% qualified to do, and you've got every competency and every skill to do it. Isn't this gonna be a bit boring?

Yeah. Where's the learning coming from? Where's the development coming from? You know? Mm-hmm. And I'd say that it's no good if you've only got 25% of the skills to do the job. You are gonna fall flats on your face. Mm-hmm. But you know, if you've got around 60% or so. Well, you are gonna go in there and do a, a good job and you're gonna have some fun while you're learning that balance of 40%.

Yeah, it's definitely good to have that stretch. And I like how you said there's certain things you can only get by, by, uh, by doing. 'cause I myself, when I started in the role and having to do board presentation, mind you, I was in fp and a, which means I helped. Prepare the slides for the CFOI was in the room.

Yeah. But when you're the CFO, you don't have the same dynamics as when you're just a financial analyst in the room. 'cause the [00:31:00] eyes are more on you than the person that helped you with the slides. 'cause at the end of the day, it's you. Yeah. And I remember, gosh, PWC assignment. Early in my consulting career, I was working with a, a director who was on the verge of being promoted to partner, and Steve and I were going into a presentation with the client and they, I'd put some slides together and they were, they were okay slides.

There's nothing wrong with the deck. Mm-hmm. But then Steve came along and said, okay, Kevin, let's just put these slides for to, to one side for a minute and just ask three questions. What do we want them to know? There's loads of what we want them to know in your deck, but then how do we want them to feel?

A third question, what do we want them to do? Okay? Mm-hmm. And I, I think anytime that you are presenting, then that's the key difference. Now you're coming outta the fp and a team. You've got lots of stuff that you think people should know. You've got the [00:32:00] numbers coming at your ears. You can easily put loads and loads of clever pictures and slides together that that graphs and so on that show the business performance this month or what the forecast is gonna be for next month.

Well, great. You can wow them with lots and lots and lots of different things. But hang on a minute. The human brain is only actually capable of taking in three bits of information, the start. So what are the three things we want 'em to know this month? Mm-hmm. Of those three things, what do we want 'em to feel about them?

Mm-hmm. Mm-hmm. Because if they don't feel in some way, there's no, no emotion attached to it. It's so what? Why are you telling them in the first place? So the emotion is, oh, we're off target. Oh look, if we do this, here's the consequence of it. There's gonna be no bonuses this year or something like that.

Mm-hmm. All suddenly don't lose our bonuses. So what do we want folk to do about that? That, that kind of [00:33:00] story. So that that's, I think that's the difference from, you know, helping prepare the deck where you're delving into all of the knowledge that you've got. You could populate with it. It's, it's focusing on what story does this deck have to tell?

Mm-hmm. Yeah. That's such a great way to put it. I was like, where, where were you two years ago? But anyway, um, thinking about FPNA, so in the US there is this kind of trend, um, where there is more people becoming CFO from the FPNA route than the traditional CPA chartered account en route. I'm curious to hear if it's the same in the UK right now.

I think it's similar. Yeah. Okay. I, I, okay. CFO is CFO. It doesn't matter whether you're in the us, the UK or Australia, uh, really doesn't matter. And I think probably the biggest exposure you are going to get to the skills you need A CFO probably [00:34:00] coming out of that fp and a discipline. Um, not as much the a part, the analysis part.

Mm-hmm. But no. Good FP and a team should be putting forecast together looking forwards. It's financial planning. Mm-hmm. And that's the real skillset that the CFO uniquely takes to the leadership team takes to the board. It's the realistic forward view of where the business is going. Mm-hmm. I was talking to one of our mentors, Jeremy, this morning, and we, we were planning a, a workshop that we're gonna run in a couple, couple of weeks time, and it's gonna be around a.

Well, it's, it's a red cash management, fundamentally, but Jeremy related back, and we're gonna use this case study. That's a, that's a real case study from JE Jeremy's past. He joined a company as CFO, they'd [00:35:00] just gone through a big investment round and they'd got investors on board. They'd got banks on board with various, um, covenants in place.

Mm-hmm. And they've got fairly extensive financial models put together. Now one of the first things Jeremy actually did was, was have a look at the financial models and actually did a little bit of putting his own financial model together. Nowhere in nowhere in as much detail as the the big one that had been put together for the fundraise.

Jeremy realized very, very quickly that there was a fundamental flaw in the big model and effectively he had to go into the position of saying some bad news to the board. To the investors and hey, to the banks that said, well, look, 12 months down the road, we're likely to bridge these covenants that we set up.

So look, we're gonna have to do some serious work here to put this right now. That's coming from the forward looking side of the CFO, the [00:36:00] ability to talk to boards, talk to investors, the ability to deliver bad news and tell the story as is. But where did the ability do to articulate that come from? It's from a solid background in fp and a and financial modeling, and so doing that sort of thing.

Mm-hmm. CFO role is not about traditional financial accounting. It's not about putting the monthly result together, putting the annual result together. Mm-hmm. It really is about putting the business forecast together. Mm-hmm. For where it's going and yeah. Dealing with bank covenants. You don't want, you wanna stay ahead of these things like, yeah.

Yeah. And I'd say to any, any CFO who doesn't have a good fp and a background around, they, they need. A resource within their team that is strong in fp and a that they can rely on to do that detailed forecasting. Mm-hmm. Because having [00:37:00] that information is vital. And hey, if you aren't gonna make the profit, if you've got a cash problem coming up in 12 or 18 months time, one of your key roles as CFO is to tell the leadership team, tell the board that bad news as soon as possible.

Yes. Say and say 10,000 times. Yeah, yeah, yeah. Yes. And governance risk management should be in your DNA as well. Mm-hmm. That risk management, especially in this environment, right? Yes, there is ai, we all excited about what it can do, but what are the risks? Um, there is so much volatility in the market. What are the risks?

Like, how do you, how are you able to zoom out to really understand like your risk profile? And how things come at you from that perspective, because I know you also, um, help, um, CFOs with their [00:38:00] relationship with boards and CEOs and investors. So I'm curious to, to hear some of the go-to advice that you usually give them.

And I'd say to start with, every company should have a decent risk register. Okay. Um, even something the size of gross CFO, no, we're not a, not a huge organization. We learned the importance of this just recently because we've just gone through an ISO 27,001 registration, and that really made us focus on what are our information security risks.

Um, what could go wrong in this business? It's gonna give us a problem, and it went from basic information security risk. What would we do if we had a cyber attack? What would we do if we had some members of the team who were not fully team players and sabotage something and made us start thinking about a whole load of stuff around governance?

Mm-hmm. Then that went into segregation of duties. Is that in place properly? What are the risks around here [00:39:00] that we should be protecting against? And to be honest, we from a finance background was here or part protect himself. Coming out of a project background, we'd always be looking at risk on a project.

Um, no, we have the skills that we should be really owning risk and mm-hmm. If half of the CFO's job is partnering and looking forward mm-hmm. Other half of CFO's job is what can go wrong. Yes. Risk management. And doesn't mean to say that we've gotta get rid of the risk, but, uh, if it does go wrong, what would we do?

Mm-hmm. Okay. What mitigations can we put in place to, to minimize the chances of it going wrong? Mm-hmm. If the, if the CFO's not doing that stuff, who is? Oh, so I don't see it as anybody else's role. Yeah. I had another guest on the podcast too. She said, when something doesn't fit quite well, it sits under the CFO.[00:40:00]

Well, that's a classic and that, that's the other thing. As we're looking at kind of that move from head of finance or head of fp and a and you suddenly take on the CFO role. Oh, I'm running the legal team now. Mm-hmm. Dunno anything about running the legal team. Yep. No. Classically the CFO gets to run everything that nobody else wants to do.

Yes.

So, and expected gifts. Yeah, because the accounts payable function falls under the CFO. Suddenly the CF O's looking after procurement. Yeah, I'm doing it right. Very different looking after actually buying stuff versus processing the purchase order and paying the bill. Mm-hmm. You know, again, you know in, as you go into procurement, there's all those skills around negotiation.

Best price, best supplier, but then there's a whole lot of risk in there. Is this the right supplier [00:41:00] to deal with the right geography? Yeah. What happened? The supplier, supplier goes under. Mm-hmm. You know, and we we're probably used to looking at risk as far as customers are concerned because we, we'd nearly always be asked in finance to be the, the custodian of credit, worthiness of the customer.

Mm-hmm. But certainly flip that round. There's just as much risk around suppliers as there is customers. Oh gosh, yeah. Yes. I, I think that's, especially now with, with, with tariffs and there is a lot, there is a lot going on, especially in risk. I wanted to go back to what would you recommend, especially to A CFO in their first 90 days when it comes to establishing and understanding that risk register?

Like how would you define it first, but what would you say they should be doing in those first 90 days? When it comes to risk? When it comes to risk, gosh. First 90 days is all about understanding the [00:42:00] company. Mm-hmm. Um, and I actually cover that first 90 days as CFO in module nine of our future CFO program.

We actually go through how do you make an impact in the, well we say first a hundred days, but No, it is 90 and don't really go into risks. Specifically in that. Um, but risk is a pr, understanding the risks is a product of what you do. Mm-hmm. Um, a lot of your time should be spent fact finding. And one of the things that I recommend is sometimes during the first 30 days, get your team together, possibly take them off site, have a, a decent workshop where you, you kind of brainstorm the.

What doesn't work around here, and you're getting towards risk. Mm-hmm. It's, you wanna find out where are the systems broken? Where do we have [00:43:00] big workarounds to make things happen? Where are the relationships with other teams that are a little bit broken? There's a whole load of things that you should be coming outta that workshop with, uh, with a big wishlist of here's what needs fixing.

Okay. Rather than a, a big element of risk in there. Um. You probably as in that first period as well, you should be talking to as many people across the business, not not your own team. And I counsel people to, to stop putting together something that's just as simple as a SWOT analysis. Strengths, weaknesses, opportunities, threats.

Mm-hmm. Start putting it together yourself before you take the role. You know, you've, you've got that period after you've given notice in your old job to the day one in your new job. Mm-hmm. Well start doing some research, start filling it in. What do you think the strengths and the weaknesses and the opportunities and the threats are around this new business that you're joining?

Now kinda use that. Have it in your back pocket. [00:44:00] Mm-hmm. As you are talking to your pi, your new peers as you meet them. So you're going in, you're seeing the CMO. Okay. CMO. What do you think the opportunities are in the business? What do you think the threats are? What's the competition gonna do? And that's gonna be, first of all, it's gonna be backing up or contradicting what you've thought yourself.

It's gonna give you a different view. Mm-hmm. But it should be crystallizing, you know, what are the real strengths and weaknesses around here? No, all of s SWAT ends up being, in some ways, things that you could be putting on that risk register. Mm-hmm. The first 90 days I think is all about building up that business understanding.

Okay. It's, it's much wider than putting a risk register and the I actually recommend as well another couple of strategy tools you can take. Mm-hmm. And do in that period before you join the company now quarters for forces know what are the forces at play around this, [00:45:00] this business, you know. What's, what's the pressure coming in from customers?

What's the pressure coming in from suppliers? What's the risk of substitution? What's the risk of new entries into the market? Now, if you understand that from a strategy point of view, port is five forces, you go a long way to being able A, to be the good strategic advisor. But B, you know, the flip side of all of that, understanding those forces is where are the risks?

I love it because that's something I always, that I actually realized and I've been seeing always to a lot of people. Mm-hmm. You have to treat the 30 days before the 90 days as important. Yeah. Than the 90 days, like the 30 days before the first 90 days. Is so important. Like you said, the time between you, you did a notice of your old place and where you're going next to do what you just said.

Do the SWOT analysis yourself, the PESTEL [00:46:00] analysis, the Porter's, five forces, all these things to really prep you into what you're going into. Yeah. And Pestol you just mentioned, that's another good one. That's the third one that I would use as well. Mm-hmm. It's a great way of just saying what's going on?

Not in this business, but outside this business, you know? Mm-hmm. What are the political factors that are gonna hit us and the industry? What are the economic factors, social factors, technological factors, and technology's a big one at the moment 'cause it's changing so fast. Legal, what's out there in leak?

Can, can legislation. Change and do something that's particular one to look at if you're in a regulated industry. Mm-hmm. And environmental is always a big one. How are the environmental factors gonna come and hit us? So coming out of those six factors in a pestle analysis are a lot of risks. Yes. A lot of opportunities as well.

Yes, yes, yes. Oh gosh. Thank you so much. I know we didn't get a chance to really touch on [00:47:00] ai. You probably have to come back another time. I'll come back and talk about ai. We're doing a, yeah, doing so much on AI at the moment. Actually, one, our tech theme in gross CFO, this, this quarter and quarter one, is we are looking at AI native apps as opposed to the traditional apps that have bolted some AI on.

There's a, the patchwork. Yeah. The, there's, there's a, it's a little bit like when cloud accounting first came out, everybody had started off with an on-premise solution, and all those on-premise solutions started to pretend they were cloud solutions when they weren't. Yes. They were still sitting somewhere.

Yeah. Yeah. Yeah, so, oh, thank you so much. Very interesting. So we, we'll have another conversation about AI at some point. Va. Yeah, it's, oh yeah. Oh yeah. It's a podcast in itself. Oh gosh. You know, I still need more training on that, so thank you, you so, so much of being, I always [00:48:00] like to end with something to understand what you like to do outside of work.

Besides all these mentoring and numbers and leadership, what do you do? Well. I've got a under the desk. I've got a, a Labrador fast asleep because just before we started recording, I used my lunch hour to go and take both dogs to Labrador and Spaniel, take them out for a, a decent length walk. And they're both shattered now.

Spaniel's been locked in his crate 'cause he's also soaking wet. He decided to go for a swim. Um, what else keeps me busy outta work? Well in, up in the. In the attic of the house, there is a big model railway, sorry, that's railroad for you, US listeners. Yeah. And football Newcastle. And I do, sorry, that's soccer for us.

US Soccer Ohga. I'm a big soccer fan. I'm a big soccer fan. Did you watch the Game? Barcelona Area, Madrid? I don't know if you into that, but [00:49:00] I didn't. But hey, we played my, my team is Castle United. Ah, okay. And our first match in the Champions League this season was against Barcelona. Uh, we lost unfortunately.

But, uh, hey, we're playing PSV Eindhoven next week and our final game is against, uh, PSG Paris Sangerman. Wow. You know, PSG has been on the straight now. We'll see how it goes. Yeah. So they've been winning since GI and Bobby left. Whoops. No. Last time we were in the Champions League. Bao was playing Uhhuh and we beat them three.

Nothing at home. Yep.

Oh, it's so good to always talk to other soccer fan, football fan. Yeah. That was one of the adjustments to when I came to the US and they were like, this is football. I'm like, no soccer. I'm like, mm-hmm. What is soccer? It's football. Football. Yeah. Yeah, yeah. And on my other podcast, the next a hundred days, [00:50:00] Graham, my co-host is a huge lead United fan.

So we uh, we end up. Digressing into football frequently on the podcast. It is so fun though. Well, thank you. Thank you so much for being on the show. It was such a joy to have you, Kevin, cia. Thank you very much. Thoroughly enjoyed it. Awesome. Another episode of the Diary of A CFO. I hope you find unique insight from Kevin.

You can apply right away in your career. So if you enjoy this whole conversation, please subscribe to the show on Apple Podcast, Spotify and YouTube. And wherever you find us, please leave us a review. It really makes a big difference in helping other leaders find us. Now, if you wanna go deeper, whether you're current CFO or your aspiring CFO, head over to the diary of the.

cfo.com where you'll find the show notes, key takeaways, and also the link to the resources we mentioned today. The site features a free CFO readiness [00:51:00] assessment where aspiring CFOs can answer 25 questions to get their personalized readiness score and see exactly which skills to develop. There's also a newsletter with actionable insights for finance leaders looking to advance their careers and thrive in CFO roles.

Also, if you got a question or a guest suggestion you would like to make, send an email at Ask at the diary of a cfo.com. Coming up next is an interview with Jillian Avil, A CFO in the life science industry, who walk us through how startup funding works from series A, B, and C, all the way to IPO. You do not wanna miss it.

See you next time.