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06

Jul

CFO Symposium 2016 Wellington: It’s all about Change and Disruption

Over 100 Finance Leaders gathered, on Friday 24th June, to listen, understand and share their views on the role of the CFO, with an oversubscription of at least 20 people really highlighting the level of interest in this event. 

It was Intergen’s first time as a major sponsor of the Wellington CFO Symposium and as soon as we arrived to set up the stand we could see it was going to be a really valuable day. With a prime stand position, rolling TV graphics highlighting successful client work and of course the draw for a pair of  Blackbox M10SE Active Noise headphones, we had all the right drawcards for intrigued Accountants.

CFO Symposium Wellington 2016

To the symposium itself - the first thing I noticed was the energy and buzz in the room, there appeared to be a genuine air of expectation about what the day would deliver and the valuable insights from the plethora of experienced and interesting speakers. As event facilitator, Bernard Hickey warmly introduced each speaker and opened the floor up to timely questions. Bernard proved why he is one of New Zealand’s most respected financial journalists asking insightful questions and providing the essential linkages between speakers.

The method of delivery throughout the day kept the audience engaged with a mixture of individual speaker presentations, seated interviews and panel discussions. The well timed breaks afforded great opportunities for attendees to meet, chat and make invaluable connections over excellent espresso coffee generously provided by one of the main sponsors. The overall theme of the day was what is the modern day CFO?  – what is their prime role and how does that actually work in practice.

The majority of speakers provided deep and powerful insight and for the sake of brevity I’ve decided to focus in on two of the symposiums’ headline speakers – John Allen CEO of the New Zealand Racing Board and Mark Yeoman Group CFO of the Warehouse Group and CEO of the Warehouse Financial Services.

Presenting like New Zealand’s very own Billy Graham (the American TV Evangelist) John Allen held the audience in the palm of his outstretched hand for his entire session. For those who have not encountered one of John’s presentations I can assure you he excites, invites, challenges and entertains his audience.

Having a wide variety of experience in leading disrupted businesses, according to John, has afforded him the most potential for learning and quite possibly some grey hairs! As CEO of New Post he led a big business shift away from a rapidly declining letters based business and took on the traditional offshore owned banks to create Kiwibank. This new entrant to the banking scene proved a considerable challenge to the Australian owned banking fraternity and fundamentally disrupted the entire New Zealand Banking offering. Kiwibank did two fundamental things really well:

  • Understood the customer and
  • Understood and leveraged the strength of its brand.

Becoming CEO of the Ministry of Foreign Affairs and Trade saw John in another hugely disrupted organisation – largely by the likes of CNN News. This disruption provided an opportunity to change the organisation’s delivery model to become a global provider of judgement and insight whilst facilitating collaboration – this was all very necessary in a new world where there is no shortage of information.

And more recently at the Racing Board where there are world class jockeys but the industry is challenged e.g. an ever increasing competition for the entertainment dollar and a large fixed cost operation.

 “Expose yourself to the excitement” John Allen expressed his view of the modern CFO. “Dry, boring and cardigan wearing people” need not apply. The role of the CFO is the lynchpin of the organisation – CFOs must be able to explain, interpret and plan for what is coming. They need to collaborate with colleagues across the organisation to unlock the future for the organisation, which involves recognising and shaping opportunities. Board reports are critically important and he expects that the CFO will act as an independent thinker and along with the usual reporting of what historically happened, most importantly provide real insight into what is going wrong and what are the risks.

The main people characteristics in the ideal CFO for John are:

  • Be active, be in the frame and be willing and able to deliver;
  • Have some battle scars, have lived and ideally had some experience in the arena;
  • Don’t have a big ego, in fact have a low ego and be able to understand and build teams that deliver;
  • By recognising you are not perfect, present yourself as willing to collaborate, share and understand; and
  • Anchor yourself in the midst of the action – confronting and challenging and being prepared to say what you stand for.

In his closing thoughts John said that it’s not always important to be loved, not to take headlines personally and don’t be precious as it’s not actually personal even when it seems that way.

John’s presentation was thought provoking, challenging and left everyone with food for thought. John’s presentation left me thinking about how close to several of Intergen’s core values John’s presentation was. “You can believe what we say”, “We earn our expert status”. The presentation also left me in no doubt that effective core systems and analytical insights that underpin collaboration are absolutely essential.

Disruption again featured strongly in Mark Yeoman’s presentation. Mark who has led various Finance teams through his successful CFO/CEO career, focused on the expectations of CFOs leading change and being leaders in the new world of disruption. In Mark’s view the “CFO is on the realm of the possible and the realm of reality”, the CFO must balance reality with how the organisation needs to respond to the potential for disruption.

Mark provided an extended definition of the concept of disruption. He spoke of how the rules have been violated and often this violation has been occurring over a period of time before it’s completely visible to the organisations being disrupted. And it’s not about competing within the existing value chain it’s about completely rewriting the value chain. Think of organisations such as Uber and the impact on the typical local taxi driver or Airbnb and the way it monetises spare capacity in people’s houses. The hotel’s business model prevents it from competing in this category of delivering to people’s accommodation requirements.

Businesses aren’t typically good at building out entrepreneurial mind-sets effectively enabling disruption to sometimes happen right under the nose of an industry. An example of this is within the financial services sector where all of the traditional artefacts such as long and unwieldly application forms with long approval processes are disappearing in favour of shorter, simpler web based forms that can simply be approved. Traditional financial services companies that do not meet this new demand may not survive.

So how do you create and maintain a different way of thinking to protect against being disrupted? Mark provided us with a number of proven ways to do this such as:

Be Prepared

Stand in your competitor’s shoes and attack yourself, find out where your organisation is weak. Best you know before the competitors do. They have got the Warehouse Groups’ CFOs together and run a mock scenario of where a group member has been poached by a competitor and they then present to the group where and how to attack the organisation. Also needing to define the key value propositions for your organisation which informs where the strengths are.

Embrace a Healthy Dose of Risk

This translates into a degree of discontent in the business plans. Mark gave the example of meeting Jonathan Ive - Apple’s Chief Design Officer - and how a lot of what Apple does is taking large bets on new products. Apple are a more extreme example of this appetite for risk and innovation.

Also incorporate a healthy dose of paranoia – yes they are out to get you!

Jealously Protect Your Customers

Embrace intimacy with your customers. Closely follow and monitor social media. It’s quite likely that your customers are frequently talking about you across those channels. Set traps and decoys with the ultimate result that you can dictate the battlefield. Be a bit aggressive and drive your competitors where you want them to go.

Adapt a Learning Mindset

Shake off your sense of entitlement. The customer owes you absolutely nothing. You must be humble and approachable (very similar to John Allen’s comments on dropping the ego). Also be creative – use your imagination and help others do the same. This is of course whilst keeping grounded as you want to be able to harness many of these ideas not throw them all away. Be observant whilst still knowing what you are looking for.

Some excellent learnings and content sharing from someone who has grown and thrived in environments being constantly disrupted.

Across many of the speakers the disruptive nature of business today stood out for me. To really thrive and grow in disruptive times, businesses need agile and cost effective partners who can readily harness forward thinking solutions.

Posted by: Richard Drake, Client Director | 06 July 2016

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