fei webilogue jamison 030311

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1© 2011 The Executive Insight Network, LLC All rights reserved.

EIN Webilogue: Managing Uncertainty

and Driving Strategy in 2011

Cynthia Jamison ± CFO of AquaSpy March 3, 2011




Cynthia Jamison

CFO of AquaSpy

Serves on the boards of the Tractor Supply Company, B&G Foods, and Cellu-Tissue

Former National Director of CFOServices for Tatum, LLC

Served as CFO of eight public and private companies, including Cosi Inc.,ISCO Inc., Chart House Enterprises, and

eMac Frequent columnist for Fortune, CFO

Magazine, The Wall Street Journal and Newsweek

Graduated from Duke University and earned MBA from the University of

Today·s

Ambassador

of The EIN




The CFO sits in a unique position

Unique skill set

Respected within the

organization

A strategic advisor to theCEO

Good combination of

strategic and tactical

responsibilities Access to all information

A ³must have´ position ± at

first as a controller/CFO

growing to a full functional




Like anything ± it comes with two sides

It is a very challenging job ± made more so with regulatory

expansion and recent economic pressures

Turnover is high

CEOs like to have ³their´ CFO Fully and adequately staffing a department can be

challenging and time consuming

³The Office of the CFO´ has been well documented as a

job that is µtoo big to fail¶, yet often does

Job satisfaction levels of CFOs have been low since 2007

with no evidence of rebounding




Question #1

Recent turnover statistics for CFOs show a decline from

the highest levels in 2007. To which of these would you

attribute this shift?

±

CFOs have stepped up their game± Fewer CFOs are available to fill vacancies

± The economic downturn made Boards/CEOs hesitant to switch-

out such a critical player

±

CFOs do not see good alternatives to their current job, sochoose not to leave




Question #1«Attendee Responses

8 1%

19%

0%

0%

0% 20% 40% 60% 8 0% 100%

CFOs do not see good alternatives to their current job, so choose not to leave

The economic downturn made

Boards/CEOs hesitant to switch-out such acritical player

Fewer CFOs are available to fill vacancies

CFOs have stepped up their game

Recent turnover statistics for CFOs show a decline fromthe highest levels in 2007. To which of these would you

attribute this shift?

Source: The EIN Webilogue, March 3, 2011




How do you«

Improve job satisfaction?

Become indispensable not only to

the CEO but to your peers and to

the Board? Protect job security?

Maximize the shareholder value

that you produce?

Position yourself for career

growth?




Answer: Strive to become a Co-CEO

through a new set of tools

Provide cross-functional insight

Become the ³sane´ voice ±but not the ³no´ voice

Speak the right language:the language of business;the language of long termperspective and thelanguage of growth

Be a leader in choosingperformance metrics

Actively researchcomparative benchmarks

Use Boardroom access to its

highest advantage




Provide cross functional insight

Other than the CEO, the CFO is literally the only person in

the organization to see all sides

Often there is a more holistic back drop

±

Historical perspective± Detailed financial data

± An understanding of µwhat it took to get there¶

Peers will talk more candidly in providing information

Generally an unbiased perspective




Become the sane voice

CEOs are typically brilliant visionaries± More big picture oriented

± An advocate for a certain strategy

± Try to ³manage´ the Board and

management BUT«Board members look to the

CFO to provide± Less emotional and data driven opinions

± A clear read on progress using reliable

metrics

± A foundation (and possible counterpoint)to the glorious dreams of the CEO; but apractical view point as opposed to what isperceived as a negative viewpoint




Speak the right language

Framing in all things:why, what, when?

Brevity and succinct conclusions

Balanced and unemotional Passionate to win

A balance between facts and interpretation

Presenting creative solutions More positive than negative

A ³team´ player, yet constantly questioning




Lead in choosing performance metrics

More than GAAP financial

statements

Interim as well as final

report cards Tied to shareholder value

Industry and size specific

Unite with CEO¶s vision in

determining milestones

Qualitative as well as

quantitative measurements




Question #2

Performance metrics are varied and broad. Which is the

primary metric that you use?

± Operational improvement scores

±

GAAP financials± EVA-based value-creation metrics

± Per employee measurements

± Competitive benchmarking

±

Year-over-year comparisons





45%

10%

4%

4%

10%

22%

0% 20% 40% 60%

Operational improvement scores

GAAP financials

EVA-based value-creation metrics

Per employee measurements

Competitive benchmarking

Year-over-year comparisons

Performance metrics are varied and broad. Which is theprimary metric that you use?





Actively research

competitive benchmarks

CFOs ± more than any other function ±

have access to peers

Use industry groups to gain insight

Cross-industry benchmarking can

provide great ³best practices´ for early adoption

CFOs and CFO advisors keen on sharing

ideas

A common language promotes in-depthcompetitive information

Groups ± like FEI± offer

meetings, programs, support groups for

financial executives




Use Boardroom access to

its highest advantage

Understand Board processes and dynamics

Build a relationship with your Audit Committee

Offer conversation and updates

outside of formal meetings Coach your CEO on allowing (if

not promoting) the idea of anindependent relationship«takeany threat away

Express concern rarely, with

factual backup, and unemotionally Never drop a surprise into a Board

presentation!

Be creative in usingcommunication tools to keepDirectors updated in between

meetings




Question #3

CFOs are routinely included in Board meetings. How

would you best describe your current approach?

± Speak only when spoken to and present GAAP financials

±

Let the CEO do all of the presenting and agree with all conclusions

± Interact with Board, but only in formal meetings

± Work with CEO to present a coordinated and tag-team business

presentation

± Have continuous and independent conversation with Board

members on an on-gong basis





26%

61%

7%

2%

4%

0% 20% 40% 60% 8 0%

Work with CEO to present a coordinated and tag-team business presentation

Interact with Board, but only in formal meetings

Let the CEO do all of the presenting and agree with all conclusions

Speak only when spoken to and present GAAP financials

CFOs are routinely included in Board meetings. How would you best describe your current approach?





CFOs often sabotage themselves

through a series of mistakes

Communication style that sends the wrong message

Failing to lead

Presenting data as opposed to insight

Focusing on cost containment at the expense of growth

Ignoring some key constituents

Projecting sabotage as opposed to support




Communication that

sends the wrong message

CFOs can be less-than-charismatic

public speakers

Focusing on too much detail can cloud

the bigger-picture takeaways

Tell the story ± it is an action plan not areview of historicals

Use all important data to support

conclusions, but attach the conclusions

to the strategy, not back to the data Engage debate ± not a monotone

presentation




Failing to lead

Just as much as the CEO (if not more), you are a voice

representing your peers

Collaborative preparation and discussion maximizes

accuracy in presenting an objective overview Voice advocacy for needed resources ±

time, money, people

Attach management leaders with performance metrics and

goals

Give credit freely

Respect trusted confidences




Presenting data as opposed to insight

Technological advances have provided maximumexposure to all kinds of data in real-time

Data can be critically important± probably THE most important aspect of leading to success

But«data overload can be:

± Overwhelming and distracting

± Can cloud good decision making

CFOs MUST understand and embrace their unique and powerful influence in translating data into actionindicators

You and you alone have the ability to FRAME the story of what the data is telling you




Question #4

Data comes in many forms and provides a range of

insight. The sources of data that are most useful come to

you through:

± General ledger accounting system

± ERP system

± Internally-generated presentations

± Focus groups

±

Social media





0%

4%

29%

41%

27%

0% 20% 40% 60%

Social media

Focus groups

Internally-generated presentations

ERP system

General ledger accounting system

Data comes in many forms and provides a range of insight. The sources of data that are most useful come

to you through:





Focus on cost containment«

at the expense of growth

Too many CFOs are cast as ³Dr.NO´

Wild ideas, while zany, can still provide innovation«.don¶t shut them down too early

Understand that CEOs, marketingand sales executives and Board members have a favorableprejudice toward growth, not expense management

Position recommendations and action plans in a longer-term spirit of growth

± Even cost actions can be tied to future re-positioning and

selective spending/investment




Ignoring some key

constituents

Like the CEO, a CFO has multiple

constituents:

± The CEO

± The Board

± The shareholders and investors± Peer functional heads

± The finance department

One-size-fits-all communication is a cheap

short cut and a career sabotager The tone, level of detail and style of

presentation should vary with each of these

Ignoring any of these carries distinct costs

The most-likely-to-be-ignored? ± peers ± a

distinct factor in CFO turnover statistics!




Projecting sabotage

While you are the voice of reason, becognizant of appearing toocontradictory the CEO

Do not have meetings with Board members that the CEO is unaware of

Share what you will present ahead of time and present issues/concerns asbalanced by vision and potential

Do not throw your peers ³under thebus´ in a Board meeting

Support the vision, project successand present concerns within therealm of wanting to win (as aconcerned member of the team)




The bottom line

Style, not just substance counts

Data is only as good as its ability to lead to action

Peer groups provide invaluable insight and ideas to make

you better Understanding and adapting communication to each

individual audience elevates the chances of success and

trust

Great access and power requires great discernment and

judgment




Call to action

CFOs have the best opportunities

to seek peer counsel

Gain peer support via FEI, The EIN

Get your CEO in The EIN«linked with CEOs




Transformation

Traditional

Accounting focus

GAAP financials

Single presentation Tactical«then strategic

Dr. NO

Focus on cost control

A µfollower¶ of the CEO

Co-CEO

All presentations linked to

long-term vision

Good performance metricspresented consistently

Varying communication styles

for audiences

A leader of peers An important, but

supportive, counter-point to the

CEO

Strategic«then tactical




Increase your interaction with all

constituents

Build a level of healthy give-and-

take with the CEO

Make your presentations

impactful, positive, appropriate, i

nformative

Use data, but do not present data

Become a skilled advisor to the

Board, a leader among peers and

a second-hand to the CEO

LEAD PRESENT ADVISE

Challenge yourself




Continue the conversation on

The EIN Forumhttp://TheEIN.com/index.php/questi

on




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