What Makes a Top FD – The Round Table
Over this past year CMA’s Commercial Director Richard Dibden has sat down with some of the South’s foremost business leaders to discuss the integral role of the Finance Director. Now we bring these considered opinions together and explore the insight offered by these decision makers.
In the wake of the FD of the Year award, the boardroom members and business leaders we met with came from a cross section of the South’s leading businesses. With them, we explored how the current climate has affected the FD’s role, looked at how the role will evolve over the next five years and then these leaders offered their own advice on what aspiring FDs need to know to succeed. Read on to discover what they had to say.
Participants were:
Mike Lashmar – Group FD at Luxury Family Hotels and winner of the FD of the Year 2020
Gareth Evans – Area Director for Hampshire and Dorset for HSBC
Neil Duffy – Finance Operating Partner at Tenzing Private Equity
Jonathan Caswell – Origination Director at LDC
Paul Anthony – Managing Partner at RSM
Hazel Hendley – HR Director at Ordnance Survey
Max Toti – CEO at Captec Group
How have the challenges of Covid-19 impacted the role of an FD and what are the main lessons you’ve seen and taken from this experience?
Mike: “It’s been incredibly tough, especially with a new member in the family shortly before the first lockdown. Family and friends are important; looking after them and seeking guidance from them is hugely important. My wife is a huge inspiration and I couldn’t do it without those around me – take time to appreciate them no matter how hard and demanding work is.
“The importance of communicating honestly and openly has been reinforced for me – explain to your stakeholders what is going on, what you need them to do and properly listen to their concerns. The last bit is the most important and takes a lot of effort, but if you can do it, you can surprise yourself with what you can achieve.”
Hazel: “Covid has shown the importance of being ‘human’ leaders, as our working life has been integrated into our home life. Agile working means that it’s not solely about time recording/presenteeism anymore. It’s all about outcomes – for both the business and the customer.
“Moving forward, the FD and rest of the senior leadership team needs to model the behaviours that will enable us to build back stronger, focusing on outcomes and being more human.”
Neil: “In those early Lockdown One days, everyone was preoccupied with the cash position of their business – but the strong, proactive FDs appreciated the importance to act early; for example, to draw down on their overdraft facility to maximise cash capacity and thereafter manage cash proactively.”
Max: “The pandemic has tested the ability of the FD to react and adapt in more uncertain, ambiguous and often volatile circumstances. The old adage “It’s easy to be a War General in peace time but the true test is when war breaks out” has never been truer. Across the business, opportunities for situational touch points, together with the fluidity/information sharing of being in the office, have compromised ‘communications and coaching opportunities’. It means we have had to work harder to maintain a consistent dialogue and relationships.”
Gareth: “The need for more regular dialogue has been essential. The mantra of ‘no surprises’ has never been more important. It’s better to hear the bad news early and be able to plan accordingly.
“The better FDs have proved strong in the production and communication of two main areas through the pandemic; scenario planning; and communication of ‘What is the new normal?”
How do you see the role of the FD evolving over the next five years?
Mike: “It’s getting more complex and that will continue to be the case. The role is evolving at a fast pace and you need to understand more about the wider world, not just the GAAP textbooks. The thing that hasn’t changed though is the need to work as a team and support your CEO.”
Jonathan: “There will be a need to be an even better communicator and being able to display emotional Intelligence with the team will be paramount. FDs will also need the ability to build collaborative relationships across the business; this will be especially tested within a more agile working environment.”
Gareth: “Two main areas come to mind: Firstly, FDs will need to embrace and be adept at supporting the continued digitalisation of the business and the finance function.
“Secondly, sustainability and green initiatives will also be an increasing area of focus in the future for a business and consequently the FD. A good FD will need to think about sustainability in terms of recurring revenues and planning for continued growth in challenging times, as well as sustainability from an environmental viewpoint and focusing on the business’s supply chain and its people.”
Neil: “We will see a greater use of new analytical tools to access and present better data to enable business decisions – e.g. customer buying patterns, longevity of relationships. The FD also has a role to play in evaluating the office footprint; is it still necessary to be based in key risk areas such as big cities? Where should critical infrastructure be located? Questions like these will result in continuing to change technology platforms to the cloud.”
Paul: “I really believe we are on the cusp of something significant in terms of the speed of change within technology, with the very real prospect of automation bots and increased AI for some transactional responsibilities – for example, credit control processes and reconciliations.
“The new accounting software is becoming so much more sophisticated, that less of the FD’s role will be overseeing general bookkeeping.”
Max: “The rear-view-mirror approach has become outdated and far greater emphasis will be placed on driving forward-looking opportunities, risks and outcomes.”
If you were to give one piece of advice to a young finance professional with FD aspirations, what would it be?
Mike: “The best piece of advice I would say is to be open minded. Try new things, be open to learning and don’t assume you know the best way or the right answer. We live in a world that is subjective and changing rapidly and the more you can adapt and be flexible, the greater chance you have of growing and being more valuable.”
Neil: “Take on a role outside of finance at a relatively early stage of your post-qualified career. This will give you experience of being in a position where you can’t control all the variables and will teach you to think differently about the business, processes and the role of the finance function.
“It will effectively put you in the shoes of your work colleagues and whether this be in logistics, sales or fulfilment this will provide you will ‘real world’ experience and make you a more holistic-thinking CFO.
Hazel: Be curious; you never stop learning. And take time to fully understand the business products/services and customers; become ‘business savvy’ to enable you to add genuine value to the business.
Jonathan: “Get out and network as much as possible and take opportunities to draw in as much experience as you can from different people.”
Paul: “The phrase ‘Lonely at the top’ is so true of an FD and therefore the importance of building a network and using your advisors for help and advice is paramount.”
“Inexperienced FDs who may not have this network can also be more reticent about asking for advice, but communication with your advisors throughout the year is all-important and the most accomplished Finance Directors do this on a regular basis.”
Max: Always ask for increased opportunities and volunteer to learn as many parts of your boss’ job as possible. This will leave you well placed for promotion when the opportunity presents itself. Secondly, ensure you look up at the bigger picture of the business, and don’t lose perspective in the details of the numbers: Look at the business through a telescope, look at the numbers through a microscope.”