CFO Navigation Series: Paths to the top
In this series I will be meeting with and interviewing CFO’s and Executives that have gone beyond CFO with a less traditional path, having worked out of finance at one time and how this has positioned them for the top finance role and beyond.
With the ever expanding remit of the modern CFO a diverse background and tool kit has never been more important. This series will examine various paths and differentiators of successful executives.
First in the series is an exciting look into the strategic background of a CFO in the FMCG world!
Aspiring CFO’s of today: What you need to bring to the table and are you doing enough?
Ever considered something more strategic?
In my experience most have, even if only during a day dream waiting for the kettle to boil - it sounds so alluring, escapism from the 50,000 line spreadsheet!
Recently I had the pleasure of speaking with Andrew Townend, CFO of PepsiCo ANZ and previously a Principal with The Boston Consulting Group (BCG). Given the ever changing remit of CFO’s and senior finance professionals to include a broadening scope, often including Strategy, IT, HR and Operations; I wanted to wrack the brain of one of the few people I know that has bucked the above trend and moved against the traffic from strategy into finance. But do they have to be mutually exclusive? Read on....
I asked Andrew the following questions, his answers certainly provide insight into his thinking behind his own career path to date, the tips to help you get the feathers in your cap now that will pay later and his thinking on the landscape regarding Australian opportunities.
Given your background and how it differs from that of the traditional CFO profile of 10 years ago, how has the role/duties changed?
A key change in the CFO role mandate is the addition of Strategy and Value Creation. Previously the role centred on reporting, planning, financial controls and finance oversight, which each remain important. But the inclusion of strategy and value creation demand the management of both short and long term planning and direction. This expands the value add from finance, business wide. The CFO today thus plays a key role prioritising the right commercial growth, operational, and cultural initiatives to drive performance. And must then ensure that the initiatives deliver short term (annual operating plan) and long term (transformational change program) value creation objectives.
What attracted you to the CFO position? Was it always in the plan?
I completed my undergrad degree in finance before working in investment banking at J.P. Morgan. I then completed an MBA in economics and finance from the University of Chicago. From there I joined BCG and worked closely with senior leaders of Fortune 500 companies and private equity funds to drive strategy and value creation across a range of industries. After advising senior leaders for many years I yearned to get onto the playing field – to actually get into the executive leadership and management game. I felt the CFO path would be a rewarding one to travel, complementing my strategy and corporate finance skills with deep operating experience. With the CFO role mandate evolving to include strategy and value creation, a global career at PepsiCo offered a terrific fit.
Has the plan been to ultimately become a CEO?
Possibly, what’s great about being a CFO is that in many respects you operate as the right hand to the CEO or General Manager and the more you are working cross-functionally with the leadership team and the business supporting Sales, Marketing and Operations for example, the more you are prepared for those general management opportunities. It’s an excellent development ground for that sort of executive leadership career path or indeed further global senior finance opportunities.
For Finance professionals looking to move to a CFO position in the future, what strings would you suggest they add to their bow now?
Firstly I would say to focus on developing strategic thinking. This is best done beyond the narrow functional finance positions; it could be achieved in a business development role, strategy role, transformation role, or in a commercial or operational role within a significant project. Great if one has worked in management consulting. If not, try to work with a consulting team or to work for a manager with prior management consulting experience. Strategy is really a way of thinking.
Secondly I would highlight international experience; global mobility is something that has served me well, having developed the ability to work and adapt to different cultures and environments.
Finally I would say leadership then becomes more and more important, not only to lead the function but to lead the business. Be seen as a thought leader across the org… with license to influence in any corridor of the business – Sales, Marketing, HR, Operations as examples....all of which are critical to success. Demonstrating thought leadership – an ability to spot insights and connect the ‘so what’ dots to build engagement and drive impact, to create value – requires one to become a systems thinker. To drive real change one must extend beyond core functional finance competencies.
What 3 things would you look for when hiring your successor?
1. Drive for results – Deliver the short term. Ability to build and deliver an operational plan that has a high basis of integrity – clear commercial growth and productivity drivers – and which materialises with timely and accurate reporting under a strong system of internal controls. The first role the CFO must play is that of the chief performance management officer.
2. Strategic thinking – Reframe the long term path with clear choices to steer value creation. Strong external orientation, curiosity, and a good understanding of the wiring of the internal operation to align and embed a robust multi-year growth and transformation plan. The CFO must look beyond the annual operating plan, anticipating changes in the external environment and aligning the organisation on a roadmap to drive sustainable value creation.
3. Leadership – It’s all about the people, the ability to not only inspire and build capability through your own function but to have one’s influence extend beyond the function you inhabit. The CFO must also build the future finance talent bench – the next two org layers down – playing an active role building this next generation of change leaders.
As you have worked globally, Europe, America and now Australia how would you say Australia is set up for career opportunities in 2016?
I would say Australia is very fortunate to be amongst the highest income per capita nations in the world; it has also had an extraordinary two and half decade macro business cycle expansion – so, yeah there is a lot going for Australia in its fundamentals.
That platform creates exciting opportunities, certainly relative to the US and Europe that have suffered downturns. Australia is well positioned, has a relatively stable set of macro fundamentals and a strong diverse economy. It will continue to provide great opportunities for finance talent.
For me I think the question for finance professionals in Australia is – to what extent is international experience and global mobility something that will build your capability, build your perspective and make you more marketable for different future roles… whether at home or in the global market?
And finally, what do you do to switch off?
I build and manage my life around a set of 4 weekly rituals –
- Number one is family, I am married and have a young daughter – our favourite activities include reading stories each night and cooking eggs and pancakes together on Sundays
- Second is my passion for music, I play the acoustic guitar – I protect time for this each week
- Thirdly, Reading for pleasure and personal development each night – an excellent routine to ensure lifelong learning and to relax the mind before going to sleep
- Finally, Exercise! I make sure I get to the gym a few times a week – most usually early in the morning… it’s an excellent way to revive and kick start your day!
Achieving balance is never easy. It requires prioritisation. And mastering the art of habit. A world class assistant and a loving and understanding spouse are also essential for me. Above all striking the right balance means making sure you carve out time for the things that matter most – those relationships and endeavours which challenge and fulfil and continuously renew your energies.
In summary, the game has changed and the top job is no longer as straight forward as it was; there is a variety of cross functional contamination required to be successful, influential and effective within an organisation.
Value creation and strategic thinking provide a great base for what is required in addition to the traditional CFO role and having both front of mind now will pay dividend in the future. If possible, gain international experience to develop the skills for adapting to cultural business differences.
Finally, managing the short and long term will allow robust plans and establishing yourself as a leader within the business, regardless of your level you can be a thought leader which will allow your influence to access all facets of the organisation and will in turn build your brand.
Wise words, useful insights and once that kettle has boiled you can start thinking of your next strategic move.
CFO | PepsiCo Australia & New Zealand