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

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Welcome to the Diary of a CFO podcast. I'm Wasee
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Akamon, your host. I'm a CFO with a background
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in accounting and FPNA and I started this show
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to talk about what leading finance really looks
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like and what it takes to become CFO. Each week,
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we explore how today's top finance leaders build
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high performance teams, partner with CEOs and
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boards and lead through growth and transformation,
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hopefully without burning out in the process.
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Today, I'm super delighted to have with me, Kevin
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Appleby. Kevin is a rock star where he helps
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CFOs turn their finance teams into strategic.
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tech enabled partners to the business. He has
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been a divisional CFO, a transformation consultant
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with PWC, and now a mentor who gives finance
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leaders practical frameworks to modernize how
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they plan, report, and lead. Now he also hosts
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two big podcasts. The Grow CFO Show that is focused
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on modern finance leadership and the Next 100
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Days podcast, one of the longest running independent
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business podcasts in the UK, where it talks to
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entrepreneurs and experts about... practical
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strategies that create real results. Welcome
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to the show, Kevin. Gosh. Thank you for that
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introduction. Wow. I must go on and meet this
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rock star sometime. Yes. Yes. I'm super excited
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to have you with me. I know I've been on your
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podcast twice, maybe three times. Yes. Yeah.
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And so it feels so good to be on the other side
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now that I get to interview you. And it's very
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strange being on the other side. I mean, on that
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5 -4 -3 -2 -1 countdown starting in Riverside,
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I was about to say, hello and welcome to the
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Grossier Phone Show. Well, welcome to the Diagrams
2:05
CFO podcast. So I'm really curious to dive in
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because you have so much experience and develop
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so many frameworks around what it takes to turn
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a good finance team into a great finance team.
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So when you look at finance teams today, what
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do you think is the real difference between a
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good team and a great one? I think it probably
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comes down to business partnering. I think back
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to that kind of divisional CFO role that I was
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doing in the chemical industry. And if I was
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going back and saying to my younger self, what
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should I have been doing different? It's definitely
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much more business partnering. It was a business
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partnering role, but it was very much about putting
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the monthly result together, presenting the monthly
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result to the business team. helping them through
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the budget rounds and things like that. Yes,
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those are the standard things that every finance
3:07
team should be doing and explaining the result
3:09
and telling the story. But I think what makes
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the real difference is rather than kind of their
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every month and say here's the sales number,
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here's the profit number, here's the differences,
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here's why we're off budget, at which point I
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think a lot of business teams actually switch
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off. I think the really good finance team know
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all the individuals in it know what is keeping
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their internal customer within the business awake
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at night. They know the issues and problems that
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they're going through and they're there to support
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and advise and help with those real business
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problems as opposed to just constantly talking
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about the financial result. Wow. That is so true.
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I like how you say they usually switch off because
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it feels like, okay, I understand I'm off, then
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what? So what do you think is holding, tend to
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hold those otherwise good financing back? Like,
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I know there is a lot of literature around business
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partnering, a lot of courses and talk and articles
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around it, but in your experience, what have
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you seen as some of the things that hold people
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back? from being those true business partners.
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It's a practical skill. You've got to learn through
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experience and find there are books, there are
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articles, there are courses. It's not head knowledge
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is part of it, but actually practicing it is
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the difference. And one of the things we run
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in Grow CFO is the business partner bootcamp.
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Now, any of our Grow CFO members can sign up
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and do one over the whole series of modules should
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they want to. And the reason that that's different
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is because we're trying to do practical stuff
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that you can attend a two hour workshop, learn
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some stuff, and you can put it into practice
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the next day. And that's the bit that a lot of
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training in this is missing. Fine having the
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head knowledge. It's fine knowing what you should
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do. You've actually got to go out there and do
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it. A good course. If you've got a session every
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week in a business partnering bootcamp like that,
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you should be setting homework each session.
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Stuff that people go out and do in practice in
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the business. It's changing your own behavior
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turns you into a good business partner. Learning
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how to tell a story. is one very important skill.
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Learning how to ask questions is another important
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skill. Why is the marketing budget overspent
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this month by 50 %? Well, we can go do the variance
6:02
analysis and we can see what we've spent extra
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on. So what? The question you're going to ask
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is why? And normally you've got to ask that why
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question about seven times to get to know what
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it is. The first thing, why is this budget overspent?
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The first thing is, oh, we spent twice as much
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with that supplier as normal. Why have we spent
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twice as much as normal? Oh, well, they were
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putting these two or three extra presentations
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together for us. Why were they doing that? Oh,
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well, we've got this new campaign, and so on
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and so on, to actually understand the number.
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Just asking the why question once isn't enough.
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Finance should be then no. the sixth or the seventh
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why question to get to the real truth and should
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be interpreting that into the story that they're
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telling about the results and it could be that
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well fine we're over budget great because of
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this doesn't matter that's part of the business
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plan now and it wasn't in the original budget
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oh you've been doing all of this stuff why are
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we doing that is the other way of approaching
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that are we sure we should be doing that and
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that's that's kind of finance Policing it a little
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bit because you you are responsible to some extent
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on hitting those financial results So a good
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business partner should be having that dialogue
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all the time Also, the business team will come
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along and ask for help Now or we want to do this
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what do you think and finance gets an awful reputation
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of saying no in such circumstances and good business
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partner wouldn't be saying no it would be well
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we've we've got these three options here are
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the pros and cons of each let's work out what
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we should do now it should be supporting the
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business with insight practical alternatives
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and good solid reasoning of what's the best thing
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to do Wow, I like first how you said you have
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to ask why multiple times because sometimes the
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first why tends to be met with people being on
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the defensive side. Like, am I getting in trouble?
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And like you said, the more you dig into it,
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you get to get that better understanding. Now
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I'm curious for CFO, especially CFOs who feel
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like they have like great teams, like how do
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they, beyond just the programs or the courses,
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how do they expose their team and get them to
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work on those business partnering skills from
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that seat? How do you get them to do it? Well,
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I think first of all, you've got to give them
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responsibility. You need to be exposed to doing
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it to learn how to do it. So it's it's effectively
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Knowing the balance I think was here You don't
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throw people in the deep end and let them sort
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of splash about and potentially drown You've
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got to give them enough leeway to learn and gain
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experience without leaving folk exposed Okay,
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so It's delegating, it's delegating the right
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amount of responsibility authorities, not delegating
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tasks, it's delegating a responsibility for doing
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things. And one way I think doing the business
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partnering piece quite well is giving people
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project exposure. You're the finance team member
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on this business project and getting them involved
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in the project beyond just recording the financial
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numbers on the project. Get them involved in
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the decisions on the day -to -day project management.
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That gets them more involved in the practical
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stuff that's going on the ground. Certainly in
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that place, some of the responsibilities of project
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manager can quite easily fall on finance. The
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risk register for the project. Great place to
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get the finance person involved. recording the
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risks, working out whether this is high, medium
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or low, working out with the rest of the project
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team. Hey, we've got this risk. How are we going
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to mitigate it? And very much more working together
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with the team than just being there to be the
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scorekeeper. That's amazing. And I like I wanted.
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dive a little more into this idea of risk management.
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Because you're a chartered accountant, I'm a
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CPA. And I can say confidently that throughout
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our regular curriculum, we don't really talk
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about risk or strategy. It's not like topics
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that are really explored in those programs. So
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you come out of school and you get to a point
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and you're like, okay, my... you know, I'm not
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too comfortable around learning about risk or
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managing risk, about talking about strategy,
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seeing the bigger picture. And you mentor a lot
11:02
of CFOs, a lot of finance leaders who want to
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become CFOs. What have you seen really help people
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make that transition between what they learned
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in school and what they have, where they need
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to be? That is a six million dollar question.
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Yes. There is one of the biggest problem as you
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come through the ranks and become a senior finance
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leader, CFO. You are required to do a whole load
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of stuff that nobody ever told you how to do
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to pass your exams. Yes. It goes back to some
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history. Traditionally, what did a Chartered
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Accountant or a CPA do? We were auditors. We
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were bookkeepers. We were either putting together
11:56
the published accounts of the company or we were
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auditing them. So all our skills are based around
12:04
double entry, true and fair view. Everything's
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based around looking backwards because we were
12:11
historically accounting. First thing, as you're
12:15
in the CFO, in the finance and industry role,
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is, okay, yeah, there's going to be the bookkeeping
12:23
team, there's going to be accounts payable, there's
12:24
going to be accounts receivable, but where does
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it really happen? It's the FP &A people, the
12:30
CFO, and so on. Because you've got to start looking
12:34
forward, okay? You've got to start... knowing
12:38
what the future looks like, you've got to start
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being able to put scenarios together and look
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at what the financial implications might be.
12:48
It means you've got to make a whole load of assumptions
12:51
to put those models together. All forecasts,
12:54
all budgets are based on a whole pile of assumptions.
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There's where good business partnering comes
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in as well, because if I'm putting together a
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financial model or a budget or a... The finances
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behind a strategy now the rest of the business
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isn't going to accept those if they're my assumptions
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You've got to get the assumptions owned by the
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business That is a very very key part of of moving
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into this this higher place Being really part
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of the business team understanding what the business
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is all about and being able to jointly make those
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reasonable assumptions going forwards about what
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is it that we're forecasting, what is it that
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we're modeling, what are the options available
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to us? How do you learn it? Gosh, that's a difficult
13:46
question because you certainly didn't learn it
13:48
to pass your exams. You're picking this stuff
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on the way through. You're learning by experience.
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I think a key way of learning is... watching
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your peers, watching your seniors as you're going
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through and developing a career. If you're number
14:08
two in finance, you're working for a great CFO,
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watch and learn. I also think there's a big part
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for mentoring in this. And certainly one of the
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things we find a new CFO will have is probably
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a whole load of imposter syndrome, a whole load
14:28
of lack of confidence. and a whole load of, I've
14:31
never done this before, what exactly do I do?
14:36
So Gros CFO, we do a huge amount of one -on -one
14:39
mentoring of those people. We've got a big pool
14:43
of mentors now. We've got probably over 30 scattered
14:47
across the globe, scattered across various diverse
14:54
communities, scattered across various industries.
14:58
So the idea is you pick a mentor that you could
15:02
chemistry with, and you can get on with. But
15:06
the idea of that mentor is they've been there,
15:08
done it, and got the t -shirt. So unlike a business
15:12
coach who will sit you down and sort of ask you
15:16
to solve your own problem by asking you some
15:18
questions, the mentors more likely come and say,
15:22
oh, yeah, I had something similar to that once.
15:25
I did X. yeah and xx worked or yeah I did what
15:32
you're thinking you're doing and it didn't work.
15:34
We need to think between us of what else we can
15:37
do. So that practical level of help really comes
15:42
in. We've got the CFO program as well that's
15:46
doing group mentoring across 12 months along
15:49
with two hour workshops every month on particular
15:53
themes to really try to skill new CFOs up. in
15:57
all of the areas they're going to come into touch
15:59
with. You've been the internal face of finance,
16:05
you've been doing the monthly reporting on your
16:07
career, you've been looking at spreadsheets,
16:10
you've probably been doing some business partnering
16:12
with the rest of the business internally. Hang
16:14
on, suddenly you're the external face of finance.
16:18
You're where the book stops for a start. there's
16:22
nobody else in finance at your level where you're
16:25
probably used to having a few peers around the
16:27
place and you're the one that's part of the leadership
16:31
team, you're the one that's reporting into the
16:34
board, you're dealing with the investors, you're
16:37
dealing with customers, you're dealing with suppliers
16:40
and somebody else has their nose in the Excel
16:43
spreadsheet that you were used to spending 50
16:46
-60 % of your time doing earlier in your career.
16:51
We are all brought up to be number crunches to
16:55
a certain extent. And the role of CFO has got
16:58
nothing to do with number crunching. You've probably
17:01
got somebody else doing that for you. I mean,
17:03
you can't even, you may want to, there is no
17:07
way. Yeah. There's an element that we delve back
17:12
into, dig back into our comfort zone. where we
17:15
like doing things. Yes. I remember when I first
17:18
became CFO, there was a big conference. It's
17:22
called OFN in that industry. And I went with
17:24
our CEO, CEO, CEO, CEO. And I think we had a
17:30
few people coming in and out, but it was a lot
17:34
of talk with potential funders, investment, business
17:37
opportunities. And by the end, I was like, I
17:40
just want to be on my desk in front of a spreadsheet
17:43
and I'm an extrovert. that tells you yeah it
17:48
takes a lot it does it does so i'm curious when
17:52
you hear all these cfos coming in through your
17:54
program like what keeps them up at night like
17:56
what do they struggle the most with gosh the
18:00
new cfo will certainly have imposter syndrome
18:04
okay it's it's almost certain and they they will
18:11
think oh i'm going to be found out That's essentially
18:14
what imposter syndrome is. I don't have the ability
18:16
to do this job, I'm going to be found out. Well,
18:19
it's a load of rubbish because somebody promoted
18:21
you into that job because they thought you could
18:23
do it. You just simply haven't realised it yourself.
18:28
Yeah, you're faced with all this new stuff and
18:30
all these doubts and worries about it, but hang
18:33
on, look back at the rest of your career. Are
18:37
you really being asked to do anything that's
18:39
that much different from what you've done in
18:41
the past? Okay, fine. You're having to business
18:45
partner with the CEO. Yeah, that's different.
18:49
It's putting you on a different level. But then
18:51
look at how many other people in the past have
18:54
you had a business partner in relationship with
18:56
successfully. Oh, you're going to have to get
19:00
involved in these projects, these strategy things.
19:02
Well, no, you've probably done some of that at
19:05
a lower level. And there's this worry that, well,
19:09
I just haven't done this before. You know, if
19:12
you if you actually look back over your career
19:14
and look at all of your successors You'll suddenly
19:18
realize yeah, you've done a lot of stuff. You've
19:20
done all of the stuff that's necessary for this
19:22
role You just haven't done it in this environment
19:25
That one keeps a lot of New CFOs awake at night.
19:31
Okay Okay, and I love how you put it like the
19:35
best way to overcoming like you said is to reflect
19:37
on what got you to that level Yeah and you're
19:42
out lovely sunny day on a hike. You've got this
19:46
great big hill in front of you. You start walking
19:50
and you walk along and you've done a fair bit
19:52
of stuff and then suddenly you've got this final
19:55
incline to get across. Now that looks like a
19:57
big struggle. A turn around look backwards and
20:01
you realize the view looking backwards, how far
20:04
you've climbed so far, all the stuff you've done.
20:07
It's that sort of thing. Yeah, as you're looking
20:11
forward, it looks as though you got a lot of
20:13
work to do turn around look backwards and realize
20:16
what you've done already Mm -hmm. Yeah. Yeah,
20:20
and that's such a great exercise to do like not
20:24
just physically But you know even as we go through
20:26
our career to take to take some time and reflect
20:29
on how far we've come Because it does give you
20:32
it helps you stay grounded for what's ahead Yeah.
20:37
And one of the things I had a mentoring, Rosie,
20:40
about Katherine Clark actually recommends keeping
20:42
a success diary. Write down in your success diary,
20:47
everything you achieve. And when you're feeling
20:50
a bit of this imposter syndrome, go back and
20:52
have a look at the list. Nice. Nice. Yeah, because
20:57
we tend to forget. I mean, time flies. There's
21:00
so many things going on. That's such a great
21:02
advice. Thanks for sharing. Yeah. And even sit
21:05
down at the end of probably each week's a bit
21:08
much, but each month, what are my successes this
21:11
month? Stick them in the success diary. I look
21:14
very, very quickly. I've quite a big list. Oh
21:17
yeah. I'm sure. Yeah. Now I'm curious. Yeah,
21:21
go ahead. Another one is you can put together
21:24
a list of here's what I think I've achieved.
21:27
Put it together yourself, then give it to some
21:29
of your peers and say, this is what I've achieved.
21:32
What do you think? You'll suddenly find that
21:34
they come back with some feedback and the list's
21:36
twice as big as you thought it was. Wow, nice.
21:42
That is nice. Well, you hope it will be twice.
21:44
But yeah, that's very true because I feel like
21:46
we sometimes so hard on ourselves. Yeah, we are.
21:49
We're hard on ourselves. We're the last people
21:50
to recognize what we've done, what we've accomplished.
21:55
You put a list together of what you've accomplished
21:57
and then give it to one of your team. I bet they'd
22:02
put a few other things on the list that you hadn't
22:04
even thought of. Oh, that's such a great, I'm
22:06
so doing it. I'm still doing it. Um, and now
22:13
I'm curious though, um, cause like you said,
22:16
we, we come through the ranks. Um, there's a
22:19
lot of things we have to, to learn bikes that
22:21
their only experience will help mentorship. Of
22:25
course helps a lot having the courses. Yes. But
22:27
I feel like now the CFO role has evolved so much.
22:32
It's a lot and technology pressure from the board
22:36
pressure for people, for you to implement AI
22:39
transformation. Like how do you navigate the
22:43
actual weight of the role? Oh, good grief. That's
22:46
a very good question. How do you navigate the
22:49
weight of the role? Well, I mean, in gross CFO
22:52
before AI even came along, we had the CFO competency
22:57
framework and anybody listening to this you can
23:00
go along to our website at growthcfo .net you
23:03
can take the competency framework free of charge
23:05
and give you a big pdf report about your skills
23:08
and competencies if you do and compare them to
23:12
your peer group but as we put that together we
23:15
realized there were nine competencies then we
23:20
broke each competency down into five skills simple
23:23
maths nine competencies, five skills in each.
23:26
That's 45 skills that a CFO could have, ranging
23:30
from the governance, the traditional roles like
23:35
that, through to strategy, through to change
23:37
management, through to mergers and acquisitions,
23:42
transactions, business exits, fundraising, the
23:45
soft skills of storytelling and so on. Huge,
23:48
huge number. And... Now the first thing you've
23:52
got to recognize is you'll never master all 45.
23:55
Yes. And I think if you start saying that I have
23:59
got to be absolutely great in everything, all
24:02
you will do is beat yourself up. You need to
24:08
focus on the ones that are most important for
24:11
the role that you're doing. Like if I take the
24:14
competency framework, we've got one competency
24:17
called catalyst for change. Now, 25 years as
24:21
a management consultant, my skill set around
24:24
there comes out very high, way, way higher than
24:27
the peer group, but I then answer the questions
24:30
that are around fundraising M &A and so on, and
24:35
I find that my skill set is very, very weak.
24:39
And I've learned a lot through reviewing and
24:41
putting together some of our courses in that
24:43
area, but I've never done any of it in practice.
24:46
And I don't intend doing any of it in practice.
24:49
So the skill area is weak, but I don't feel any
24:53
problem with that because I don't recognize it
24:56
being relevant to the sort of role that I want
24:59
to do. And I think one of the key things that
25:02
I would say to anybody is what sort of CFO do
25:05
you want to be and work on the skills and competencies
25:09
that are important to that? And I think there
25:12
are broadly... three sorts of CFO okay you might
25:16
be a bit of a blend of all three but there is
25:19
the the business partnering CFO where you're
25:22
very much the strategist you're the co -pilot
25:26
with the CEO and you're very much into planning
25:30
and strategizing and looking to the future okay
25:35
then there's the operational CFO operational
25:38
CFO is much more probably one of the skill sets
25:42
that I think I've got most and that's around
25:45
transforming stuff, around business improvement
25:48
and much more of a change management, understanding
25:53
the cost of stuff, being able to take cost out
25:57
of the business all fits in there. Then there's
26:00
the Wall Street CFO who would be the real specialist
26:05
in going raising funds. taking businesses through
26:09
mergers, acquisitions, taking businesses through
26:12
exits. And that's a very, very different set
26:15
of skills. Which one do you want to be? Okay.
26:20
If you want to be in the strategy space, well,
26:22
you can surround yourself with one or two very
26:24
good people who can do the business transformation
26:27
piece. If you know that you're going from that
26:30
role into some sort of major transaction. Well,
26:34
there are lots of third party advisors you can
26:36
bring on board to to help with your own lack
26:39
of skills in that area. Why would you be highly
26:43
skilled in that particular area if you're possibly
26:45
only going to do it once or twice in your career?
26:50
Might be other CFOs who think well I'm going
26:51
to jump from company to company because I love
26:53
this stuff, I love being involved in raising
26:55
funds and so on. You find a lot of fractionals
26:58
actually in that space. So they'll come on board
27:00
to help smaller companies through their, their
27:02
very first fundraising round or they'll be on
27:05
board to help them through an exit phase. Yeah.
27:09
Wow. Yeah. But you know, AI and transforming
27:13
things. I don't think people have properly got
27:15
their head around that one yet. Well, yeah. I
27:20
think right now is the hype. It's a lot of hype.
27:23
But before we get to AI, because we'll probably
27:25
spend one hour just on AI. I want to go back
27:29
to what you said about how you have the competency
27:32
framework. I did take it a couple of years ago.
27:34
And yes, some areas I was very strong, some areas
27:37
I was like, what the heck? And I became a CFO
27:39
still. Like you said, there is no one size fits
27:43
all. And I like how you broke down between the
27:46
different, the three different roles, the three
27:49
different types of CFOs, because you realize
27:51
every company needs a different type of CFO at
27:55
different times, right? Whether it's the maturity
27:57
stage where they may need that Wall Street CFO
28:01
first. And then after that, they will likely
28:03
need the operational CFO. Yeah. to be able to
28:07
put those uh all these operationalize all the
28:10
things that needs to happen to get to the bigger
28:13
stage but also it means for a CFO that's even
28:17
within that same company growing for all the
28:19
phases that they can hire other people to get
28:23
that kind of things done but it's recognizing
28:25
that you don't have to do it all and that by
28:28
itself is freeing yeah and we put that framework
28:32
together originally for our future CFO program.
28:36
So the community that were joining us because
28:39
they were maybe a couple of years away from that
28:42
CFO role. So we put the framework together initially
28:45
to give those folk an idea of where their skills
28:49
were and the areas perhaps they should think
28:51
about focusing on improving in the next couple
28:54
of years. And a lot of people were quite shocked
28:58
by the number of gaps they had when they took
29:00
that. And One of the things that's come out is
29:05
that, yes, you can improve some things, you can
29:07
get yourself into a better position, but nobody
29:11
is usually ready when they take their first CFO
29:14
role. Yes. Yeah. Okay. Why is that? It's because
29:22
a certain amount of those skills that you need
29:24
to do the job, you've got to learn in practice.
29:30
How do I go deal with the investor as a CFO?
29:34
You can't learn that from a textbook. You learn
29:37
how to deal with the investor by actually going
29:39
dealing with the investor. True. OK. So you're
29:44
you're never going to be 100 percent ready when
29:47
you take your first CFO job. Agree. Also, think
29:53
about your own personal development. If you take
29:57
a job on that on day one, you are 100 % qualified
30:02
to do and you've got every competency and every
30:05
skill to do it, isn't this going to be a bit
30:07
boring? Where's the learning coming from? Where's
30:10
the development coming from? And I'd say that
30:14
it's no good if you've only got 25 % of the skills
30:17
to do the job. You're going to fall flat on your
30:20
face. But if you've got around 60 % or so, well,
30:26
you're going to go in there and do a good job.
30:28
And you're going to have some fun while you're
30:30
learning that balance of 40%. Yeah. It's definitely
30:33
good to have that stretch. And I like how you
30:35
said, there's certain things you can only get
30:37
that by, uh, by doing, cause I myself, when I
30:41
started in the role and having to do board presentation,
30:44
mind you, I was in FPNA, which means I helped
30:46
prepare the slides for the CFO. I was in the
30:49
room, but when you're the CFO, you don't have
30:51
the same dynamics as when you just the financial
30:54
analyst in the room. Because the eyes are more
30:56
on you than the person that helps you with the
30:59
slides. Because at the end of the day, it's you.
31:02
Yeah. And I remember, gosh, PwC assignment early
31:07
in my consulting career. I was working with a
31:10
director who was on the verge of being promoted
31:12
to partner. And Steve and I were going into a
31:16
presentation with the client today. I'd put some
31:18
slides together. and they were they were okay
31:22
slides there's nothing wrong with the deck but
31:24
then Steve came along and said okay Kevin let's
31:27
just put these slides to one side for a minute
31:30
and just ask three questions what do we want
31:33
them to know and there's loads of what we want
31:36
them to know in your deck but then how do we
31:39
want them to feel a third question what do we
31:42
want them to do okay and I think any time that
31:46
you're presenting then that's the key difference.
31:50
You're coming out of the FP &A team. You've got
31:53
lots of stuff that you think people should know.
31:55
You've got the numbers coming out of your ears.
31:57
You can easily put loads and loads of clever
32:00
pictures and slides together, the graphs and
32:04
so on that show the business performance this
32:06
month or what the forecast is going to be for
32:07
next month will be great. You can wow them with
32:11
lots and lots and lots of different things, but
32:13
hang on a minute. The human brain is only actually
32:17
capable of taking in three bits of information.
32:21
One of the three things we want them to know
32:23
this month. Of those three things, what do we
32:27
want them to feel about them? Because if they
32:31
don't feel in some way, if there's no emotion
32:35
attached to it, why are you telling them in the
32:37
first place? So the emotion is, oh, we're off
32:40
target. Oh, look, if we do this... here's the
32:44
consequence of it. There's gonna be no bonuses
32:46
this year or something like that. Oh, so these
32:50
are bonuses. So what do we want folk to do about
32:53
that? That kind of story. So that's, I think
32:58
that's the difference from helping prepare the
33:02
deck where you're delving into all of the knowledge
33:04
that you've got, you could populate with it.
33:06
It's focusing on what story does this deck have
33:10
to tell. Yeah, that's such a great way to put
33:16
it. I was like, where were you two years ago?
33:19
But anyway, I'm thinking about FDNA. So in the
33:24
US, there is this kind of trend where there is
33:28
more people becoming CFO from the FDNA route
33:31
than the traditional CPA chartered account and
33:34
route. I'm curious to hear if it's the same in
33:35
the UK right now. I think it's similar. Yeah.
33:38
Okay. CFO is CFO. It doesn't matter whether you're
33:43
in the US, the UK or Australia. It really doesn't
33:46
matter. And I think probably the biggest exposure
33:52
you're going to get to the skills you need as
33:55
CFO are probably coming out of that FP &A discipline.
33:59
Not as much the A part, the analysis part, but
34:04
a good FP &A team should be putting forecast
34:08
together looking forwards, it's financial planning.
34:12
And that's the real skill set that the CFO uniquely
34:17
takes to the leadership team, takes to the board.
34:22
It's the realistic forward view of where the
34:26
business is going. I was talking to one of our
34:31
mentors, Jeremy, this morning, and we... planning
34:36
a workshop that we're going to run in a couple
34:38
of weeks time. And it's going to be around, well
34:43
it's around cash management fundamentally, but
34:47
Jeremy related back and we're going to use this
34:49
case study that's a real case study from Jeremy's
34:53
past. He joined a company, CFO, they'd just gone
34:56
through a big investment round and they'd got
34:59
investors on board, they'd got banks on board
35:02
with various covenants in place, and they've
35:07
got fairly extensive financial models put together.
35:11
Now, one of the first things Jeremy actually
35:13
did was have a look at the financial models and
35:16
actually did a little bit of putting his own
35:18
financial model together, nowhere as much detail
35:21
as the big one that had been put together for
35:23
the fundraise. Jeremy realised very, very quickly
35:27
that there was a fundamental flaw in the big
35:29
model. and effectively he had to go into the
35:34
position of saying some bad news to the board,
35:38
to the investors and hey to the banks that said
35:41
well look 12 months down the road we're likely
35:45
to breach these covenants that you set up so
35:47
look we're gonna have to do some serious work
35:49
here to put this right. Now that's coming from
35:53
the forward -looking side of the CFO the ability
35:56
to talk to boards talk to investors the ability
35:58
to deliver bad news and tell the story as is.
36:03
But where did the ability to to articulate that
36:07
come from? It's from a solid background in FP
36:09
&A and financial modeling and so doing that sort
36:13
of thing. CFO roles not about traditional financial
36:19
accounting. It's not about putting the monthly
36:21
result together, putting the annual result together.
36:23
It really is about putting the business forecast
36:25
together. Yeah, for where it's going and yet.
36:30
dealing with bank covenants. You don't want,
36:32
you want to stay ahead of these things. Like,
36:35
yeah. Yeah. I'd say to any CFO who doesn't have
36:41
a good FPNA background around, they, they need
36:46
a resource within their team that is strong in
36:50
FPNA that they can rely on to do that detailed
36:54
forecasting because having that information is
36:57
vital. Hey. If you're going to make the profit,
37:02
if you've got a cash problem coming up in 12
37:04
or 18 months time, one of your key roles as CFO
37:08
is to tell the leadership team, tell the board
37:11
that bad news as soon as possible. Yes. And say
37:17
10 ,000 times. Yeah. Yeah. Yeah. And governance
37:22
risk management should be in your DNA as well.
37:28
That risk management, especially in this environment,
37:32
right? Yes, there is AI, we all excited about
37:34
what it can do, but what are the risks? There
37:37
is so much volatility in the market, what are
37:39
the risks? How are you able to zoom out to really
37:44
understand your risk profile? and how things
37:49
come at you from that perspective. Because I
37:51
know you also help CFOs with their relationship
37:56
with boards and CEOs and investors. So I'm curious
37:59
to hear some of the go -to advice that you usually
38:02
give them. And I'd say to start with, every company
38:05
should have a decent risk register. OK. Even
38:11
something the size of Grow CFO. We're not a huge
38:14
organization. We learnt the importance of this
38:17
just recently because we've just gone through
38:19
an ISO 27001 registration. And that really made
38:22
us focus on what are our information security
38:25
risks? What could go wrong in this business?
38:29
It's going to give us a problem. It went from
38:33
basic information security risk. What would we
38:35
do if we had a cyber attack? What would we do
38:38
if we had some members of the team who were not
38:41
fully team players and sabotaged something and
38:45
made us thinking about a whole load of stuff
38:47
around governance? Then that went into segregation
38:51
of duties. Is that in place properly? What are
38:55
the risks around here that we should be protecting
38:57
against? And to be honest, we, from a finance
39:01
background, or particularly myself coming out
39:05
of a project background, we'd always be looking
39:07
at risk on a project. We have the skills that
39:12
we should be really owning risk. And if half
39:17
of the CFO's job is partnering and looking forward,
39:21
other half of CFO's job is what can go wrong?
39:24
Yes, risk management. And doesn't mean to say
39:29
that we've got to get rid of the risk. if it
39:32
does go wrong, what would we do? Okay. What mitigations
39:36
can we put in place to, to minimize the chances
39:38
of it going wrong? If the, if the CFO is not
39:42
doing that stuff, who is? I don't see it as anybody
39:47
else's role. Yeah. I had another guest on the
39:50
podcast too. She said when something doesn't
39:52
fit quite well, it sits under the CFO. Well,
39:56
that's a classic. And that's the other thing
39:58
is we're looking at kind of that move from head
40:01
of finance or head of FP &A and you suddenly
40:04
take on the CFO role. Oh, I'm running the legal
40:08
team now. I don't know anything about running
40:10
the legal team. Yep. Classically, the CFO gets
40:14
to run everything that nobody else wants to do.
40:18
Yes. And expected gifts. Because the accounts
40:26
payable function falls under the CFO. Suddenly
40:29
the CFO is looking after procurement. Yeah, I'm
40:33
doing it. Looking after actually buying stuff
40:39
versus processing the purchase order and paying
40:41
the bill. Again. You know, as you go into procurement,
40:48
there's all those skills around negotiation,
40:50
best price, best supplier, but then there's a
40:53
whole lot of risk in there. Is this the right
40:55
supplier to deal with? Is the right supply chain
40:58
secure? Yeah. What happens if the supplier goes
41:04
under? No, and we're probably used to looking
41:08
at risk as far as customers are concerned because
41:11
we Nearly always be asked in finance to be there
41:14
the custodian of credit worthiness of the customer
41:18
Mm -hmm, so we flip that round. There's just
41:20
as much risk around suppliers Yeah, yes I think
41:26
now with with with tariffs and there is a lot
41:30
there is a lot going on especially in risk I
41:32
wanted to go back to what would you recommend
41:34
especially to a CFO in their first 90 days when
41:37
it comes to establishing and understanding that
41:41
risk register like how would you define it first
41:44
but what would you say they should be doing in
41:48
those first 90 days when it comes to risk when
41:51
it comes to risk gosh The first 90 days is all
41:54
about understanding the company. I actually cover
42:01
that first 90 days as CFO in Module 9 of our
42:05
Future CFO program. We actually go through how
42:08
do you make an impact in the first 100 days,
42:11
but no, it is 90. And don't really go into risks
42:17
specifically in that. But understanding the risks
42:24
is a product of what you do. A lot of your time
42:28
should be spent fact finding. And one of the
42:33
things that I recommend is sometimes during the
42:35
first 30 days, get your team together, possibly
42:39
take them off site. Have a decent workshop where
42:42
you kind of brainstorm what doesn't work around
42:46
here. You're getting towards risk. It's you want
42:51
to find out where are the systems broken? Where
42:55
do we have big workarounds to make things happen?
42:58
Where are the relationships with other teams
43:00
a little bit broken? There's a whole load of
43:02
things that you should be coming out of that
43:04
workshop with a big wish list of here's what
43:08
needs fixing. Okay, as a big element of risk
43:11
in there, you probably as in that. first period
43:17
as well. You should be talking to as many people
43:21
across the business, not your own team. And I
43:25
counsel people to start putting together something
43:28
that's just as simple as a SWOT analysis. Strengths,
43:31
weaknesses, opportunities, threats. Start putting
43:35
it together yourself before you take the role.
43:37
You've got that period after you've given notice
43:40
in your old job to the day one in year. New job.
43:43
Well, start doing some research. Start filling
43:46
it in. What do you think the strengths and the
43:48
weaknesses and the opportunities and the threats
43:50
are around this new business that you're joining?
43:52
Now, kind of use that. Have it in your back pocket
43:56
as you're talking to your new peers as you meet
44:00
them. So you're going in, you're seeing the CMO.
44:04
OK, CMO. What do you think the opportunities
44:07
are in the business? What do you think the threats
44:10
are? What's the competition going to do? And
44:12
that's going to be, first of all, it's going
44:14
to be backing up or contradicting what you've
44:18
thought yourself. It's going to give you a different
44:19
view, but it should be crystallizing. What are
44:23
the real strengths and weaknesses around here?
44:25
All of SWOT ends up being in some ways things
44:29
that you could be putting on that risk register.
44:32
So the first 90 days, I think is all about building
44:37
up that business understanding. Okay, it's much
44:40
wider than putting a risk rate just near that.
44:43
I actually recommend as well another couple of
44:45
strategy tools you can take and do in that period
44:49
before you join the company. Now, quarters for
44:52
resources. What are the forces at play around
44:55
this business? What's the pressure coming in
45:00
from customers? What's the pressure coming in
45:03
from suppliers? What's the risk of substitution?
45:06
What's the risk of new entries into the market?
45:09
Now, if you understand that from a strategy point
45:12
of view, Porter's Five Forces, you go a long
45:16
way to being able A, to be the good strategic
45:20
advisor, but B, know the flip side of all of
45:24
that, understanding those forces is aware of
45:27
the risks. I love it because that's something
45:31
I always that I actually realize and I've been
45:34
saying always to a lot of people. You have to
45:38
treat the. 30 days before the 90 days as important
45:42
than the 90 days like the 30 days before the
45:44
first 90 days is so important like you said the
45:47
time between you you did a notice of your old
45:50
place and where you're going next to do what
45:52
you just said do the SWOT analysis yourself the
45:55
PESTEL analysis the Porter's five forces all
45:58
these things really prep you into what you're
46:00
going into yeah and PESTEL did you just mention
46:03
that's another good one that's the third one
46:04
that i would use as well It's a great way of
46:08
just saying what's going on, not in this business,
46:10
but outside this business. What are the political
46:14
factors that are going to hit us and the industry?
46:16
What are the economic factors, social factors,
46:20
technological factors? And technology is a big
46:22
one at the moment because it's changing so fast.
46:25
Legal, what's out there? Can legislation change
46:29
and do something? That's a particular one to
46:32
look at if you're in a regulated industry. Environmental
46:36
is always a big one. How are the environmental
46:38
factors going to come and hit us? So coming out
46:41
of those six factors in a PESL analysis are a
46:45
lot of risks. Yes. A lot of opportunities as
46:48
well. Yes. Yes. Yes. Oh gosh. Thank you so much.
46:54
I know we didn't get a chance to really touch
46:55
on AI. You probably have to come back another
46:58
time. I come back and talk about AI. We're doing
47:00
so much on AI at the moment. Actually, our tech
47:04
theme in Grow CFO this quarter, quarter one,
47:08
is we're looking at AI native apps. Okay. As
47:12
opposed to the traditional apps that have bolted
47:15
some AI on. The patchwork. Yeah. there's, there's
47:20
a, it's a little bit like when cloud accounting
47:24
first came out, everybody had started off with
47:27
an on -premise solution and all those on -premise
47:30
solutions started to pretend they were cloud
47:32
solutions when they weren't. Yes, there was still
47:35
sitting somewhere. Yeah. Yeah. So thank you so
47:40
much. Very interesting. So we will have another
47:41
conversation about AI at some point of us. Yeah.
47:44
Oh yeah. Oh yeah. It's a podcast in itself. Oh
47:48
gosh. You know, I still need more training on
47:52
that. So thank you so, so much for being, I always
47:56
like to end with something to understand what
47:58
you like to do outside of work, besides all these
48:02
mentoring and numbers and leadership. Well, I've
48:07
got a under the desk. I've got a Labrador fast
48:11
asleep because just before we started recording,
48:15
I used my lunch hour to go and. take both dogs,
48:18
Labrador and Spaniel, take them out for a decent
48:21
length walk, and they're both shattered now.
48:23
Spaniel's been locked in his crate because he's
48:25
also soaking wet, he decided to go for a swim.
48:29
What else keeps me busy out of work? Well, in
48:32
up in the in the attic of the house, there is
48:35
a big model railway. Sorry, that's railroad for
48:38
you US listeners. Yeah. Football, Newcastle United.
48:44
Oh, sorry. That's soccer for you. I'm a big soccer
48:47
fan. Yeah, I'm a big soccer fan. Did you watch
48:51
the game? Barcelona, Real Madrid. I don't know
48:54
if you're into that, but I didn't. But hey, we
48:58
played. My team is Newcastle United and our first
49:03
match in the Champions League this season was
49:05
against Barcelona. Unfortunately. but hey we're
49:10
playing PSV Eindhoven next week and our final
49:13
game is against PSG Paris Saint -Germain. Wow
49:17
you know PSG has been on the straight now we'll
49:19
see how it goes. Yeah so they'll be winning since
49:23
Kylian Mbappe left. Now last time we were in
49:30
the Champions League Mbappe was playing and we
49:34
beat them 3 -0 at home. Yep. Oh, it's so good
49:40
to always talk to other soccer fan, football
49:42
fan. Yeah, that was one of the adjustments to
49:44
when I came to the US and they were like, this
49:46
is football. I'm like, no, soccer. I'm like,
49:48
mm -mm. What is soccer? It's football. And on
49:53
my other podcast, The Next Hundred Days, Graham,
49:56
my co -host, is a huge Leeds United fan. So we
50:00
end up digressing into football frequently on
50:03
the podcast. It is so fun though. Well, thank
50:08
you. Thank you so much for being on the show.
50:11
It was such a joy to have you, Kevin. Thank you
50:14
very much. Thoroughly enjoyed it. Awesome. Another
50:18
episode of the diary of a CFO. I hope you find
50:21
unique insight from Kevin that you can apply
50:24
right away in your career So if you enjoy this
50:27
whole conversation, please subscribe to the show
50:29
on Apple podcast Spotify and YouTube and wherever
50:32
you find us Please leave us a review. It really
50:36
makes a big difference in helping other leaders
50:39
Find us now if you want to go deeper whether
50:42
your current CFO or your aspiring CFO head over
50:45
to the diary of a CFO that comes where you'll
50:48
find the show notes, key takeaways, and also
50:51
the links to the resources we mentioned today.
50:54
Also, if you got a question or a guest suggestion
50:57
you would like to make, send an email at ask
51:00
at the diary of a CFO .com. Coming up next is
51:04
an interview with Julian Averell, a CFO in the
51:07
life science industry who walk us through how
51:10
startup funding works from series A, B, and C
51:13
all the way to IPO. You do not want to miss it.
51:17
See you next time.