Live and in-person conferences are upon us again, and I recommend attending one or more this year. The CFO Leadership Council’s Spring Conference on May 19-20, in conjunction with MIT Sloan, was the perfect back-to-school – dynamic, very accommodating for networking, topical, and most importantly sales-free. (Anyone who has attended a virtual conference knows how many networking opportunities they manage to seize.)
Above all, I came away from the conference with tons of ideas at a critical time for CFOs battling inflation, talent shortages, rising interest rates and who knows what’s to come. . Despite the pressures, the mood among speakers and attendees was optimistic.
Here are three nuggets I wanted to share with CFO post-conference readers.
Kick those cash management muscles
According to Bloomberg, Sequoia Capital told its portfolio companies earlier this month that they were ready to save money by cutting R&D, marketing and other projects. From the start of the CFO Leadership Conference, speakers recommended a money-focused mindset.
Keynote speaker Ram Charan, a legendary advisor to companies like Toyota, Bank of America and Novartis, gave a pep talk and an introduction to running a business for money (“not based on accountability “). Now is the time for CFOs to use muscles they may not have flexed in a while, Charan said.
Some financial executives lament that investors and capital providers are now more concerned with profitability than hockey stick revenue growth. But panelist Hope Cochran, a former chief financial officer and now managing director of Madrona Venture Group, said she welcomes the change. “I think of the times when the markets closed and the things that I had to do. And I savor them,” she told the audience, “because it makes you see things differently…because it makes us take a critical look at everything that happens in the company.
Cash forecasting and the cash conversion cycle will be central to many finance departments in 2022, and beyond, the panellists agreed. So where to look for excess cash? Accounts receivable and inventory, Charan suggested, are two potential hiding places. Additionally, consider killing products “that are no longer cash-efficient,” Charan said.
Cochran advised, “I always say, ‘take money when you can and then spend a lot of time planning how to spend it.'”
The shift from “growth at all costs” modus operandi to “cash is king” (again) felt like a quick pivot, at least for me. But, of course, great leaders in finance excel at turning a penny.
Chase money, not people
We all probably remember a job, probably in a small company, where “stepping in” to tasks outside of the job description – to help colleagues meet a deadline or deal with a crisis, for example – was a regular occurrence. Are employees ready to “roll up their sleeves” like this now, especially as loyalty to employers is down?
During a panel, Scott Torrey, Executive Chairman of Tesorio, told the story of a company he worked with during the height of the pandemic. The company had “gut-checking” moments, as bankers discussed loan covenants and the terms of its gun. What to do to get more money in the door? How about temporarily turning recruiters into collection staff? (I couldn’t think of a job I’d be worse off at than raising money.)
It worked, Tesorio said. The company had record collections of overdue accounts receivable.
A few lessons from Tesorio: First, “leaders lead,” he said. Once hiring managers realized how important fundraising was to the survival of the company, they stepped in and pushed recruiters-turned-collectors to go above and beyond. The move “preserved nearly three to four months of [cash] burn that we no longer had to worry about,” Tesorio said.
Second, the recruiters thought it was a great experience because they got to understand another side of the business.
As more venture capital-backed tech companies cut staff and freeze hiring, will we see more? After all, the recruiting team seems to be a popular place to cut staff during the first round of job cuts.
My new favorite CFO
When Mike Ellis hovered near the podium as a session on “Preparing for an IPO and Life as a Public Company” was about to begin, I thought he was a “roadie” of the conference: the guy with the baseball cap, the jeans and the beard doing the sound check.
Turns out I’m a poor judge of appearances. Ellis is the chief financial officer of payment technology company Flywire, and he was preparing his presentation. (See my story about his great speech, 7 CFO Tips for Taking Your Company Public.)
I have a feeling I would like Mike Ellis. He’s someone you drink beer with at a neighborhood bar and later agrees to help you shingle your roof – an ordinary guy, and probably very generous. But he’s also a top-notch CFO.
“Operationally, he knew the details of multiple lines of business, helped lead and set clear strategic priorities for the management team, and engaged the board and investors directly and confidently. confidence as they continued to fund the company,” one CEO wrote on Mike’s LinkedIn profile. . The CEO also called him “an outstanding member of any management team.” What makes Mike unique is that despite all of this, he is truly humble.
Unsurprisingly, his presentation went over all the mundane advice on leading an organization through an IPO. When you’re ready to take a company public, I couldn’t think of a better person to ask for advice. So, I was not surprised later that evening to learn that the Boston Business Journal had named Mike Ellis one of its CFOs of the Year for 2022.