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Contact James Burton: https://www.linkedin.com/in/jcburton/Personal Capital: https://www.personalcapital.com/Advisory services are offered for a fee by Personal Capital Advisors Corporation (“PCAC”), a registered investment adviser with the Securities and Exchange Commission. Registration does not imply a certain level of skill or training. Investing involves risk. Past performance is not indicative of future returns. You may lose money. PCAC is a wholly owned subsidiary of Personal Capital Corporation (“PCC”), an Empower company. PCC is a wholly owned subsidiary of Empower Holdings, LLC. © 2021 Personal Capital Corporation.Personal Capital SRI portfolios are powered by Sustainalytics.FULL EPISODE TRANSCRIPTAdam (00:00):Welcome back to Count Me In. IMA's podcast about all things affecting the accounting and finance world. This is your host Adam Larson, and I'm here to bring you episode 135 of our series with featured guest, James Burton. In the wealth management space, a few can claim to have accomplished more than James, a 20 year veteran of the industry, he has held executive, management, and C-level positions at some of the most respected financial institutions in the world. He now serves as Chief Growth Officer at fintech trailblazer, Personal Finance, and joins Count Me In to talk about how to turn a crisis into opportunity. Keep listening as we head over to the conversation now. Mitch (00:50):So James, obviously the global pandemic of 2020 caused a crisis for many businesses. A lot of our listeners felt this impact. For you personally, I'd like to start off our conversation by just having you explain, how did you help clients and organizations navigate through these difficult times, particularly in the beginning? James (01:09):Yeah thanks, Mitchell. You know, something like a pandemic and the initial market slump that it caused, that really, that really makes you reconsider everything, right? All your assumptions about your business model, your strategy, your growth opportunities, trying to see into the future. And naturally many of our clients went through very similar reflections about their goals and their financial situations, and they had a lot of questions about the future too. And the demand for advice, financial advice and expert support definitely increased. And in this case, it turned out that our company, Personal Capital, we were highly prepared for the crisis because we already had a hybrid digital and human model advisory model is technology enabled to operate remotely. So in a very general sense, we just stuck to our knitting. That's a British term, I think, meaning, we stayed on strategy and we continued interacting with our clients and supporting them through their financial concerns during the pandemic, particularly in those early, very stressful months. But we also made a very crucial pivot to getting everyone to remote working, from home literally overnight. And we could do that because of how the company was designed and built. So, you know, the result was that despite the initial market slump that we went through, we actually saw strong growth last year. People want advice. They want to holistic advice and they mostly don't want to travel to a brick and mortar building or office with wood panels, you know, nice little offices. They certainly didn't want to travel during a pandemic, right. And now, you know, a year later they know that in fact they don't need to go any further than their kitchen or the home office, to work with us. So we were able to help them, right away and we were able to help them remotely, which was great. Mitch (03:14):And now, you know, kind of building on this conversation a little bit, in leading up to our recording today, I was told that you follow a quote from Winston Churchill. It's a bit of a mantra and if I can just read the quote, "never let a good crisis go to waste". So, to help explain for our listeners here, why, what does that mean to you? How, do you go about using that as a mantra? James (03:37):Yeah, so Winston Churchill, he certainly produced a lot of great motivational quotes and I do particularly like that one, "never let a good crisis go to waste". I find myself using it a lot actually. And, you know, a good crisis, is very often a great opportunity. And that's because it's when you're forced to reconsider everything, you know, all your assumptions, your business model, your strategy, your opportunities, even your very survival sometimes. A really good crisis puts all of that in the picture. And as a result, it's often when meaningful change is initiated and it's when we move forward from the past, you know, to the future way of thinking. And in the case of our company, as I mentioned, we found that as it happened, we designed and prepared very well for the lockdown and we could commit to this virtual first approach. And as a result, we've proved beyond doubt that virtual financial advice works very well. If you have the right technology and business model and it's here to stay. So a great crisis here, which it really was, and in many ways still is, you know, helped us prove that and move into a future where, you know, advice can look very different for Americans. Mitch (04:55):And now we are, you know, roughly 16, 17 months through this, you know, it's been a year and a half and, you mentioned going into the future a little bit more, not every bad thing that happens is a crisis necessarily for business, right? We don't always face something like the COVID-19 pandemic. How can this mantra, this quote still apply on a daily basis, you know, once we kind of returned to normal or the new normal, however you want to refer to it. Can you give us some examples and some response options for the daily ups and downs of business and responding this way? James (05:31):Sure, sure Mitchell, and look, you know, certainly these have been some strange and scary times in the past year. But you know, it's exciting to look into the future and see things improving. I'm definitely happy to share some examples, but, you know, as I've thought about this, as you point out, you know, real crises and real opportunities, they're not exactly daily events, you know, thank goodness. They tend to come along just when you think everything's going great in your business, like maybe early 2020 for example. So every few years you may get a really good crisis, you know, something really challenging or bad happens in the environment or, you know, in your business. I've got some examples of how to put, you know, a good crisis to work, but I have to mention that they're not really day to day examples, they're how to really harness the big situations. So if you'll indulge me, I'll happily proceed, but, you know, I generally wouldn't use an expression like, "never let a good crisis go to waste", in the day-to-day environments, right. That's just doing our jobs. So I'm happy to proceed with, you know, let's just say longer term, bigger picture examples. I'll go for it. Mitch (06:48):Absolutely. Yes, please do. James (06:50):That's great. So, first of all, I could go back in the time machine, maybe about 20 years. And, at the time I was working for a well-known stock broker based here in San Francisco, and the company had experienced huge growth in the late 1990s. And then along came the crisis, the tech bubble burst in 2000. For anybody who was active in the markets at that time...

Contact Karri Callahan: https://www.linkedin.com/in/karri-callahan-5219676a/FULL EPISODE TRANSCRIPTMitch (00:00):Hey everyone. Welcome back to Count Me In, IMA's podcast about all things affecting the accounting and finance world. I'm your host Mitch Roshong and this is episode 134 of our series. In today's conversation, you will hear from Karri Callahan, CFO of global real estate company, Remax. Karri spoke with my co-host Adam about the role of the CFO and shared some tips for finance leaders. From strategy and technology to diversity, equity and inclusion, Karri has great perspective on many topics business leaders should be aware of. So to hear more, keep listening as we head over to their conversation now. Adam (00:47):So Karri, thanks so much for joining us and as you know, the role of the CFO is become very multifaceted and how can aspiring finance leaders better prepare themselves for providing a strategy and insight? Karri (01:00):Great, thanks so much for having me Adam, I appreciate it. And I think there's a couple of things to consider. First and foremost, I think it's important that you always keep learning, making sure that you continue to build your network, connect with peers and think about joining the right organization for you so that you can hear from different speakers and industry leaders on a regular basis, I think is really helpful. Some organizations that you can consider and that I've found helpful include Financial Executives International or FEI, and also the Association of International Certified Professional Accountants, so the AICPA. Since I've been the CFO of a publicly traded company for the last five years or so, I've also found, NIRI or the National Investor Relations Institute, a great resource, they offer some fantastic certification courses and trainings and have just a tremendous library of events and programs that they offer. So I think that's also another resource for you. And then of course, last but not least, IMA definitely I know you all have a lot of resources to help professionals. I think the last thing I would say is just read things that are of interest to you, so that you can stay current either on recent economic trends, trends that might be impacting your business or your industry, or just business leadership in general. But I think some of the best advice I've gotten is that it's important and critical to really be intentional about how you spend your time. Your time is truly invaluable and making sure that you get the most out of every minute is critical, but if you keep really absorbing information, learning from others, the better prepared you're going to be as life and your profession throw you curve balls. Adam (02:53):Yeah, definitely. So, you know, speaking of time, we know that time, technology takes a lot of our time and technology has changed how finance and accounting operate with how, many routine tasks or many, many routine tasks are now automated, freeing up professionals to focus on higher level tasks. How well acquainted should today's accounting and finance professionals be with technology like intelligent automation or RPA? Karri (03:21):Yeah. So it's a great question. Remax LLC, president Nick Bailey, who I work closely with, he oftentimes tells our agents that if you know that technology won't put real estate agents out of business, but agents who don't embrace technology will put themselves out of business. And I think that advice is applicable to so many other professions, including mine and accounting and finance. And so I think as you think about technology and as all professionals really think about technology, it's important that we're always learning and evaluating and studying new trends from a technology perspective, that makes sense for your company and the finance and accounting operations within your organization. Our teams are constantly evaluating how to incorporate new technologies and software into our routine accounting and finance processes and the reason why that's so critical is because it frees up our team's time to really help analyze trends within the business, evaluate business opportunities and really work strategically with other leaders within our organization so that we're contributing to strategic growth initiatives. And so technology is a key point to that, you know, as part of that transformation within our business, our company now has more in-house technology expertise and firepower than we ever have. We have now about 50% of our workforce that's directly involved in technology and we've recently announced an organizational change to really create one technology team comprised of all of those professionals so that we can really maximize collaboration, focus on our customer and end user experience and operate with purpose, passion, and excellence from a technology perspective. And I think what that does over time is, you know, we expect it really will benefit the entire corporate team, including everyone from an accounting and finance perspective, as well as other services function by really enhancing the delivery and supportive technology and data to all areas of the business so that we can continue to drive the business forward. Adam (05:28):Definitely. It sounds like Remax is doing some wonderful things to, be a leader in the industry. So what do you do to stay ahead on the technology curve? Karri (05:39):Yeah, great question. So I think, you know, fortunately the piece of change in the real estate industry, it's incredibly exciting and incredibly dynamic and because of that, our leadership team has really a front row seat to the latest technologies as we implement our MNA strategies as well as just continue to focus on our organic growth as well. For example, you know, despite a global pandemic in September of last year, we announced the acquisitions of Gadberry Group and Weenlow. Gaderry Group specializes in building best in class products that help clients solve geospatial challenges through accurate and precise location data. Weenlow is a Florida based startup that is reshaping the mortgage loan processing, process within the mortgage brokerage channel and they have developed the first service cloud for mortgage brokers effectively combining third-party loan processing with an all-in-one digital platform. And so those are just two really exciting opportunities that we have been able to execute upon as we really look to stay ahead of that technology curve. You know, we're always assessing the latest technologies and innovative companies with in, in the space and in our business pursuits because we are the worldwide leader and we want to make sure that Remax, stays in that position from a real estate technology perspective is clear. That mission is hugely beneficial to my knowledge of what's currently out there and what the space is, is truly lacking. It sounds simple, but another way to stay ahead of the curve is really by surrounding myself with a healthy mix of like-minded individuals and people who really stretched me beyond my own constraints. We have a fantastic network of about 140,000 real estate agents, more than 600 headquarter employees, and we operate in over 110 countries and territories globally and I'm so fortunate to be able to work with and network alongside people who have very similar core values and yet challenge each other to continuously improve and innovate. And I think that collaboration really transcends across our headquarters organization because I think staying connected with leaders on the technology side is really important. I have a standing weekl...

Contact Hilla Sferruzza: https://www.linkedin.com/in/hilla-sferruzza-cpa-mba-b3170b8/Meritage Homes: https://www.meritagehomes.com/FULL EPISODE TRANSCRIPTAdam (00:05):Hey, everyone. Welcome back to Count Me In. IMA's podcast about all things affecting the accounting and finance world. Adam Larson here with you again, and I'm pleased to introduce today's featured guest speaker Hilla Sferruzza. Hilla is the CFO of Meritage Homes and spoke with my co-host Mitch about the role of today's CFOs. In their conversation, she explains why future ready executives must have a holistic view of the business and possess four lines of sight. Keep listening to hear more about finance, strategy, technology, and more. Mitch (00:42):So in today's episode, we are talking about the role of the CFO becoming more central, more complex. Let's start broadly, and then we'll kind of work our way into some more specifics. So first, what is it about today's business world and the way organizations are run that requires the CFO to have a more holistic view and a better understanding of the business. Hilla (01:05):So, thanks for having me on Mitch. In today's world everything is moving at an accelerated pace. So change digitalization, everything is causing technology to just move really fast. So the risk of taking a wrong turn can be really expensive. So I think the CFOs have to take a step back and kind of look at the entire landscape of a company and really understand all of the interconnectivity of what we're doing as a company, as an organization, and make sure that decisions that are being made really impact the organization appropriately. So whether we're looking at it through the financial lens or risk assessment lens, a technology lens, an investor stakeholder lens, you know, more recently ESG and DI lens. It's really important that we understand the implications of everything that's happening. We're much less siloed than we used to be. I think we were kind of along this path anyway, and then maybe the pandemic and working from home accelerated that where decisions are being made real time very, very quickly. I would say in the public sector, where I am the CFO, it's maybe even more accelerated and CFO is having to answer live, you know, kind of on the go conversations, whether it's from investors or from analysts, you really have to have that broad knowledge of what's happening in the market, as well as all your competitors. So you kind of are a co-leader of all this data and you have to bring it back internally and make sure the guidance that you're providing the rest of the executive team and the initiatives and strategy that you're driving as a CFO really encompass the entire company's organization and operations, not just, you know, what are we looking for on the bottom line? What's the EPS going to be, of this decision, the consequences of this decision. Mitch (03:00):Now, with this deeper understanding, this broader understanding as well that you just mentioned of the business, how are you better able to lead the strategic planning, the risk mitigation processes for the organization? We have a lot of these individual conversations about, you know, the role of the CFO, but what is it about the CFO of the finance team that really allows them to work cross-functionally and ultimately make these important strategic business decisions? Hilla (03:26):So I love to say that the finance team is agnostic, right? Our only goal is the success of the company as a whole. Every other functional area, maybe has a little bit of a different spin. Maybe it's conscious, maybe it's subconscious, but they're all driving to a different objective. Maybe if you're in sales, you're focused on a different metric and if you're in operations or in purchasing or in marketing, everyone's got a little bit of a different spin on what they think is most important to make the company successful. I think finance is agnostic, right? So we can maybe take a step back, see the entire picture, not get lost in the forest or the trees and then give counsel that is best for the organization. So I can share an example. So I work for a home builder. We always have a little bit of a push and pull on timing and on dollars. We break our teams between the folks that do what we call horizontal work, which is land and vertical work, which is the actual construction of the building. There's always a little bit of a tug of war between those two departments. The finance team can take a step back and say, well what's actually most beneficial for the organization is to take this approach. Sometimes it breaks or it's one department, other times it breaks towards another department, but maybe, you know, I keep on saying agnostic, maybe a different word is also arbiter, right? We're kind of the one that maybe can help negotiate between all the different departments and through dollars and cents explain why certain decisions are the best decisions for the organization as a whole, even though there may be not an ideal state from one department versus another. Mitch (05:06):I think that's a great way to put it, the arbiter at the end that you mentioned, it really is, you know, just the understanding that we're talking about here from both sides of the equation and making sure that things balance, you know, when it comes to accounting, making sure that everything makes sense and works out. The way you explained it right there, the push and pull really helps clarify things, so thank you for that story and that analogy. I think, another interesting part of your role as we talk about these different decisions and different teams working together, obviously you have oversight over the finance team as CFO, strategy, operations, all the regular things that the CFO has a responsibility for, but you I understand also have oversight over IT. So what are some of the advantages of having IT under your umbrella when it comes to these cross-functional teams, cross-functional conversations and things like that? Hilla (06:00):So, obviously I'm a CFO. My first love was always numbers, but I will say that my current passion maybe almost bordering on obsession is the IT function. So I kind of inherited the IT function as I think a lot of CFOs do because the underlying system of record, the accounting system is kind of my general umbrella. And IT is a role that I guess it could sit with the CEO, the COO, or the CFO in a regular organization, but they're a little bit of a, you know, they kind of get tossed around. Nobody really wants to own it. It's a little bit intimidating to have a function roll up to you that's maybe not your core level of expertise. So when the IT team became part of my CFO team, I was nervous and excited. It's been a long time since I kind of didn't know something from soup to nuts, but I really dove in and the more I dove into the IT function, the more I realized that IT was going through a metamorphosis, right. They had kind of been the back office, keep the lights on part of the organization. Nobody even knew where they sat and call them if your password didn't work. And then they've really morphed into a key contributor and everything operations. Sure we still help you with your password, right. But the real core of what we do is operational efficiency, operational excellence, and, giving us that edge, that next differentiator. So for me as a CFO, this is the lens into the business. This is the lens into ops, all of the projects, all of the requests, whether it's a wholesale change ...

Contact James Stark: https://www.linkedin.com/in/james-stark-312a2/FULL EPISODE TRANSCRIPTAdam (00:00):Welcome back to Count Me In, IMA's podcast about all things affecting the accounting and finance world. I'm your host, Adam Larson and today I will be previewing a conversation between my co-host Rouba and her special guest, James Stark. In this episode, James shares his insight and views on the challenging global landscape and the must have skills for CFOs. He is active in Egon Zehnder's financial officer's industrial board practices and is well-versed in the financial leaders need to evolve and optimize their careers and their organizations. Keep listening to hear more from James and Rouba now. Rouba (00:42):So I want to ask you a little bit about your career in the finance and accounting industry for so many years, I mean, throughout your career you've facilitated a lot of peer to peer learning within the finance and accounting profession itself, and you're a huge advocate for creating lasting value. Can you tell us a little bit more about what it means to drive that kind of level of value in today's very volatile globalized marketplace? James (01:13):Yeah, of course. So look, I tie this to the rise of the strategic CFO, which is something that's been written about quite a bit over the last decade or so. What that means, I think in practice is that CFO, senior finance leaders are becoming much more forward looking to help drive business decisions and not just kind of the backward looking scorekeeper that they might've been 20, 30 plus years ago. I think elements of that would also include scenario analysis and how you translate corporate strategy down to business unit or functional or even product strategy. So there's much more of a focus on commercial outcomes and driving the business forward. I also think finance leaders are really well equipped to help drive this value, given their position in the organization. Especially if they can broaden their skills beyond just kind of whatever that core part of finances they kind of came in or came up through. So, you know, rotations can help with that as you think about moving around between controllership to FP&A or treasury or investor relations or strategy and corporate development, et cetera. I've had CFOs tell me over the last, maybe five plus years that, you know, technical skills now are really just more like table stakes and what truly differentiates finance talent and helping to drive value creation, is having greater impact via, you know, better strategic thinking, being both deeply analytical, but also pairing that with a willingness to embrace new technologies and then also strong leadership and interpersonal skills can really help motivate and organize and energize the broader organization and I think specifically to that peer to peer learning piece, and I think part of that is also, you know, if you're a lifelong learner, you're going to be kind of more adaptable and you're constantly being incorporating best practices that you learn from others outside your organization, or even outside your industry. Rouba (02:56):Yeah, I'm all for the life learning approach, that's really a big value, at IMA. So when you look at, when your focus in recent years has been a lot on innovation and organic growth, but let's look into this new era, this new normal that we're in, the COVID-19 pandemic pre, during, and post, and as organizations are crumbling, some are succeeding, some have completely remodeled their entire business model and they're struggling to survive. What role does innovation play, I mean, and organic growth play at this time, if at all? James (03:35):Yeah, great question. It's certainly very timely, right. So I've been talking to senior finance leaders for almost two decades now and when I asked them about their top priorities, innovation and organic growth is always at, or near the top. And that's both for the company, but also even within the finance function, right? How can you improve your operations and processes within finance? So I think there's always a role for innovation, but it's important as well of course, ebb and flow, depending on what's happening both within the company, as well as the broader macro conditions. You know, in times of crisis it's well-known that R&D spending is typically one of the first line items that gets cut or at least drastically reduced, right. Cash is king and so, yeah, totally get that, that's going to happen in a downturn. But you know, but once that storm is weathered and you start seeing a return to normalcy, I think then it becomes time to quickly pivot and identify new opportunities for growth again. And I think the earlier you can make the pivot, you know, the better the odds that you can beat your competition at it. I'd also, you know, even use Egon Zehnder as an example in terms of what we did during the pandemic. You know, as the pandemic was ramping up, we didn't lay off anyone globally. You know, it was, we did stop, we did stop hiring, but we didn't lay anyone off and, you know, given our values, we didn't think layoffs were the right thing to do at the time, but also strategically, we didn't think layoffs made sense, and I think, you know, some of our competitors actually did lay off staff and, you know, as a result now that we're seeing this strong rebound in some markets, we feel like we're in a great position. Rouba (05:02):Yeah I don't think many anticipated the pent up demand and how it's going to see them scramble to get their business back to normal. So if we look at automation, machine learning, artificial intelligence, they've already begun taking serious inroads into the professional realm and not just in the finance and accounting sector, but every single industry. So digital transformation is now the conversation at every boardroom, every discussion and it was extremely accelerated by COVID. I mean, whatever was in the works a few months ago just became a priority all of a sudden. So when you think of this post pandemic, new normal per se, what are the skills that the finance and accounting professionals are going to require in order to maneuver with this new normal? James (05:49):Yeah, you know, I think some of these kind of core skills will get amplified given what we've seen over the last 16 months or so, right. And so that's around adaptability, resilience in being able to lead through ambiguity. I think we'll see likely an acceleration of some of these pre COVID trends as we move to the new normal. I think many have already, as you said, many have already been focusing on advanced analytics, bots, robotic process automation to improve performance within the finance function. As we, move to the post pandemic normal, I think those areas are going to remain robust. I'd also expect to see many people turning to artificial intelligence, machine learning, advanced data visualization technologies, and of course, digitalization to do things better, smarter and faster and who knows at some point maybe blockchain may eventually even live up to it's hype. Rouba (06:38):Hopefully. I mean, it's the biggest conversation right now, blockchain and cryptocurrency taking over the world. So we've seen companies around the world undergo major digital transformation efforts in the region. Some of the most notable are, Emirates NBD. I mean, these guys spent 1 billion dirhams, on, their own transformation. You're talking about roughly a quarter of million dollars, and just to enhance their performance, Coca-Cola says that they were able t...

Contact Marco Otti: https://www.linkedin.com/in/marco-otti/Budgeting Revisited: https://sfmagazine.com/post-entry/may-2021-budgeting-revisited/FULL EPISODE TRANSCRIPTMitch: (00:00) Welcome back to Count Me In, IMA's podcast about all things affecting the accounting and finance world. I'm your host Mitch Roshong and this is episode 131 of our series. For today's conversation my co-host Adam spoke with Marco Otti about possible solutions in different approaches to budgeting. Marco is a group controller who acts as a finance business partner to support the decision-making of Autoneum, the global market leader in acoustics and thermal management. In their conversation, Marco discusses some of the common issues with traditional budgeting and explains why CFOs need to rethink how they plan and execute their budgets. Keep listening as we head over to their conversation now.Adam: (00:50)So let's start by talking about some of the issues with traditional and better budgeting. Why change?Marco: (00:56)Yes, why is innovation in budgeting needed, right? I mean, as a group controller, I contribute to our company's annual budgeting, monthly forecasting and three-year financial planning process, and I often ask myself, how can we as management accountants do a better job at budgeting, right? Kind of process be simpler or different. I'm sure most listeners have been involved with the budgeting process in one way or another. Maybe ask yourself as well, what do you consider the most significant barrier to improving or changing your budgeting process? There can be many barriers of course, for example, organizational attitudes towards budgeting, time, cost, inflexible IT systems, or the process being controlled by another group/department, or maybe you think there are no barriers at all, then that's great. One thing to remember is that traditional budgeting is still used in the maturity of companies. At the same time, many of these organizations identify agility as their strategy, which is quite surprising because traditional budgeting is too rigid to support agility well. And if you read Kaplan and Norton, they say that the ineffectiveness of many budgets also comes from the fact that almost 60% of organizations don't link budgets to their strategy and only 25% of managers have incentives linked to the company's strategy. Most of us are aware of the limitations of traditional budgeting. So it can be a very time-consuming exercise with limited value, as assumptions are quickly outdated. Also decisions are often made too early and other to senior level. And based on my own experience, having been involved in a budgeting process, the issue with traditional budgeting is really the amount of work compared to the benefit. I mean, having annual and detailed discussions with cost centers can be quite time-consuming and usually the complaints come from us, the finance function, finance organization who manage and execute this process. So depending on how lean and improved your process is, it can be an efficient exercise as well. With better budgeting you can substantially reduce the planning effort, for example, with less meetings, less reporting requirements, more top-down guidance, shorten the process to maybe one or two months every year. However, process improvements are still a continuation of the traditional budgeting approach and does not bring fundamental changes of instruments.Adam: (03:30)So then what are the essential functions of budgets and what are they used for?Marco: (03:34)That's a good question because, the functions and what budgets are used for, are quite relevant and important, like translating your company strategy into targets, which refers again to the strategy execution, Kaplan and Norton are talking about. Budgets are, if you will, the tactical implementation of the strategy, they are about resource allocation, which again, starts with developing and validating the company strategy. Therefore, I would say you cannot just remove the budget with its functions and manage your costs and business because planning is still important to coordinate activities, in your own organization. As an example, let me share some of the different functions the budget has at my company, Autoneum. We use the budget for setting absolute targets for the year and to support the performance management throughout the year, for example, every month. So the budget really serves as a reference point for performance and based on many assumptions, it gives a prediction of the next year and how we plan to control costs. Also it is used for resource allocation and managing continuous improvement initiatives. In any organization, traditional and better budgeting is really a mix and let's say a compromise of some of these and other functions.Adam: (04:57)Okay, then, so in the context of traditional budgeting and VUCA environments, how did your company respond to the crisis last year?Marco: (05:04)Yes, I mentioned agility before, of course, in a VUCA environment, like in 2020 with the COVID-19 pandemic, traditional budgets were not very useful to compare performance against because they were basically irrelevant by the end of the first quarter. So how did we respond? On the top line we planned for different scenarios and updated them weekly. In terms of costs, we used the most recent rolling forecasts, which are updated monthly. And in discussions with the business unit locally agreed on how to best cut costs. In some cases we instructed some top-down adjustments, based on the revenue levels. So for a time really stopped focusing on a budget, right, and shifted the attention to the monthly forecast and came up with intermediate targets based on the circumstances. This is also something to think about when you put yourself in the shoes of the decision makers. What did you or your company do to respond and manage costs during the pandemic? Did you empower your local teams because they know best how to manage costs. Or on the other hand, did you centralize decisions as much as possible because in a crisis there is a need for strong leadership, right? Actually, I mean, this spectrum of self-control versus command and control is relevant when thinking about new budgeting approaches. You can manage costs with detailed annual cost budgets or increase autonomy and flexibility by using absolute or relative KPIs, or even no targets at all. Of course, this then needs strong company values and a clear direction.Adam: (06:45)What are the possible solutions for more business agility and changing to different budgeting approaches like beyond budgeting?Marco: (06:52)Actually this question, was the reason why the president of the IMA Switzerland chapter, Hessel Brouwer and myself, reached out to CFOs and academics in Switzerland to learn from their experiences of moving to more modern and agile budgeting techniques and then also publish an article in strategic finance. One of the main ideas of the beyond budgeting theory is to separate the budget functions as outlined before. The key budget functions, are target setting, forecasting, and resource allocation. So instead of having one compromised number for all these functions, you would in a first step separate targets from forecasts and from resource allocation. With that, you would have three different numbers serving different purposes. A key tool is forecasting or rolling forecast, which supports the ongoing planning and forecasts are used for the purpose of better decision-making and not as a target or application for resources. Forecast should reflect the best estimates with as little details as possible and be again, decoupled from targe...

Contact Keith Terreri: https://www.linkedin.com/in/keith-terreri-595b4bb/NEC Corporation of America: https://www.linkedin.com/company/nec-corporation-of-america https://www.twitter.com/nec FULL EPISODE TRANSCRIPTAdam: (00:05)Welcome to episode 130 of Count Me In, IMA's podcast about all things affecting the accounting and finance world. This is your host, Adam Larson and today I'm pleased to introduce our featured guest speaker, Keith Terreri. Keith is the Chief Financial Officer and Senior Vice President of corporate operations, and IT for NEC Corporation of America. In his double role of CFO and CIO, he has developed a wealth of skill and knowledge necessary for effectively overseeing and managing accounting, FP&A, supply chain management, corporate operations and IT. In this episode, Keith describes the convergence of these two pivotal roles and explains the value each team brings to the business regardless of the organizational size. Let's head over the conversation to learn more.Mitch: (00:57)So our listeners are well aware of the changing role of the CFO. It's something we talk about all the time, you know, the need for a strategic foresight decision-making business partnering is something that's very popular. A lot of this is due to the evolution of technology, but you have a unique role. You have a double role of CFO and CIO at NEC. So what does this convergence of the two roles really look like to you on a daily basis?Keith: (01:22)Thanks, Mitchell. That's actually a great question because it's certainly different than when I was just CFO. The convergence of these two roles, it's actually been a very eyeopening experience to say the least. So the convergence has come with some great synergies, and also a significant amount of risk management. From a synergy perspective, obviously our back-office functions of OTC, which is order to cash, PTP, which is procure to pay and record to report, or RTR have been greatly enhanced, right? So finance corporate operations, and IT are all one team now and communicating regularly. The interaction in visibility for both groups has been fantastic as one team and under this scenario, we work on a daily basis to make sure not only our ERP is running smoothly, but also our network and data is secure. For a risk management perspective, obviously cybersecurity has become a major part of all IT team's responsibilities over the last several years and now it's a part of daily operations for companies. However, in this dual role it's been becoming increasingly clear to me that cyber security is everybody's responsibility, not just the IT department. As everybody knows, ransomware attacks are very prevalent right now making cybersecurity the utmost importance on a daily basis. So we constantly monitor our network for security purposes and many companies are moving towards a zero trust approach from a cyber security information perspective and so that is also part of our daily discussion. Customers are also getting much more stringent, you know, on their contract requirements, requiring information security clauses in the contracts with us, so that we have to be very cognizant of that as well. So now we are very involved as we continue to make contracts with our customers. So, I mean, all in all it makes for quite a different daily routine than just finance.Mitch: (03:32)Well, as far as finance goes, you know, I know much of your career prior to this role, prior to taking on CIO also was specifically in the finance function. So talk a little bit about how those experiences and those skills helped you prepare for the responsibilities you just discussed and what you've taken on involving IT.Keith: (03:51)That's another great question, Mitchell, thanks. I mean, primarily, it was really my training in risk management that has helped me the most. Always concerning myself with the downside of either operational or finance issues has been very helpful throughout my career and now with that, the added responsibility for IT, thinking about the downside, or any type of issues from an IT perspective, has really been a good mix for me. Also having had experience in cyber liability insurance probably since it started, or when it was first offered, I've almost kind of grown up with that. So as a CFO, financial risk management is very important and frankly cyber risk has become, definitely become a financial risk to everybody these days based on all of the cyber activity that's out there in the world. I mean don't forget, I mean risk management is not only for services you provide to your customers, but also for your own network and your data. So you've got two things you have to look at from a risk management perspective and we do this frankly, on a regular basis. So when you think about all the, you know, traditional finance experience, most of the times the CFOs are responsible for risk management insurance. I think that the cyber liability insurance, which is changing rapidly as we've seen in the last month or so is very important for both the CFO and the IT guys to understand completely. I particularly, if you have a chief information security officer, that employee needs to be very familiar with how the policy works, if you should ever have a claim.Mitch: (05:34)Now, oftentimes because of the risk management perspective, you were just talking about how that falls on the CFO's shoulders. They're usually responsible for forging a relationship with the CIO because of the cyber security, cyber liability, things like that and the joint relationship is responsible for handing the priorities of finance and IT individually. We spoke a little bit your role prior to this call and, you know, you serve both. So how do you really communicate the needs and further support the relationships of two different teams as one person?Keith: (06:08)So this was definitely something I wanted to focus on when I took over IT three years ago. And I really think, you know, as a CFO and being able to look holistically at the financial statements and also preparing our annual budgets and forecasts, it becomes slightly easier to allocate resources for cybersecurity and for IT initiatives. There's no longer in my mind, right? In the way we have things set up a competition for funds or resources between finance corporate operations and IT. So it really makes for a more collaborative approach on resources so that when we prepare our annual budgets, we go together as a team and we've already kind of vetted out, you know, the priority of funds and funding for resources. The entire team discusses and ranks the needs so that we're all in sync. You know, one of those slogans I adopted early on with the finance team was “we're all IT now”, and that has really helped kind of change the mentality and increase the collaboration between the two groups. I mean, under this type of scenario, there's no longer any finger pointing and everybody accepts accountability. You know, in a traditional scenario where you have the two teams separated, in a traditional scenario, there separation of these two teams can create friction, which is not necessary in today's ultra fast paced business world. The entire leadership team of finance and IT, and corporate operations meets once or twice a week. They think that's an update from my perspective, but really it's for them to interact and update each other so that we're all on the same page and so no one person can say, “I didn't know IT was doing this”, or “I wasn't aware of finance wanted to do that”. And this communication has brought foresight and respect,...

Contact Denise Dettingmeijer: https://www.linkedin.com/in/denisedettingmeijer/FULL EPISODE TRANSCRIPTAdam: (00:00) Welcome back to Count Me In, IMA's podcast about all things affecting the accounting and finance world. This is your host, Adam Larson, and I'm here to kick off our conversation for episode 129 of our series. Today you will hear from Denise Dettingmeijer, Chief Financial Officer of Randstad North America. Denise is a dedicated financial leader who is passionate about bringing more women into the field. While she talks with Mitch, she explains what needs to be done and how it can be measured to ensure women are integral part of the future of finance. Let's head over to hear her perspective on the topic now.Mitch: (00:44)Thank you Denise, for joining us. Our conversation today is about bringing more women into the field of finance. I know you said this is something you're passionate about. So to begin, can you please share with our listeners kind of your perspective on the current environment, the gender gap in the industry, and really what interests you about this topic?Denise: (01:02)Yeah, I absolutely can, and thank you for having me here today. You know, starting with the current environment, we can't not speak about the pandemic, so hope everybody's safe and sound. What that has taught us as an industry, as finance professionals that flexibility, the speed, the creativity, just, you know, crisis management was always one of our skill-sets, but nothing at this level before. And putting that into an environment like a pandemic from a past where those skills were always extraordinary for us, I think just exploded, you know, what we can do for the company. When you lay that over onto the gender gap, there is definitely a gender gap as a result of COVID as well in the industry, not just in the industry, in the world with working women. So focusing down on the finance thing, the one word I have is women are definitely underrepresented in the finance worlds. Statistically there's 38% of finance majors are female and 18% of CFOs are female. Those are for fortune 500 companies., it gets lower when you include all companies, 12%. So when you start out at 38, we could argue that's too low and what can we do about the education and having people that look like me and others, you know, getting involved in the finance stream of universities then accountants and other professionals, but regardless, even at the 38%, if we could get to 38%, that would be quite an accomplishment. We're hovering much, much lower than that. So no matter how you do the math, truthfully, we're underrepresented in an industry and in a function that actually suits traditional female traits and so many career pathing for so many people.Mitch: (02:45)Now you are at the forefront of the industry as CFO and through your experience as a finance leader, you talked a little bit about the numbers, but what else have you noticed as far as progress? How have you seen the industry really progress with this topic?Denise: (02:59)Yeah, so, the industry, as I think that beginning entry level has progressed. So you see a lot of women in finance when you do finance in general. So whether it's accounting, accounts receivable, payroll, FP&A, you know, the whole scope of finance, you see more and more women at the entry level. Truthfully, I haven't personally seen it progress in the upper ranks since I've been working, it's still a unique position. There's not a lot of women when you go to CFO events, when you look at panels, it's just an underrepresented group in this area. So while the industry has progressed toward, more soft skills, being able to connect people, it used to be a really kind of a technical function. It's progressed to understanding bigger pictures and teamwork and traits that perhaps are generally more seen as female traits, the female representation and finance hasn't progressed along with that. I think there's things we can do about it, of course. But until now it's really, it's still unique for me to see another female CFO. And every time we join a meeting, we're still counting. We're like, okay, there's 20 of us, there's three, that's more than 10% great. Right. We're still counting and when we can stop counting, I think we've made a difference.Mitch: (04:23)It's very interesting and you know, very, as you just said, minimal change from the target, the goal that you're really looking for. So obviously there's room for improvement. When it comes to, you know, closing this gap, how do you recommend the industry improves? What is, what is still lacking? What needs to be done next?Denise: (04:42)Yeah. So, there's hundreds of things. I think for me, the, the big ones are, it's hard to make this change, right? And I know people talk about unconscious bias and you know, you hire people who look like you or who have the same experiences. We've got to crack that and crack it for so many reasons, not just women, but race and all of the other, you know, gender issues or diversity issues that are happening. We no longer have to, you know, 15 years ago we had to put forth the business case of why diversity matters, how come companies perform better with a diverse leadership team. Those, we don't even talk about that anymore. Everybody understands that agrees with it, it's scientific, it's proven. So I think it starts now with the humans and the fact that we can all learn and admit we have unconscious biases, here at Randstad, we switched that and go, you have to have conscious inclusion. So there's a difference between saying, yeah I'm unconsciously biased, I can't help it everybody has it. To I will consciously include, and in this case women and finance, I will consciously include them at the table. If women have trends when they enter a room of more than 10 people with, you know, eight chairs at the table and five along the wall, they'll sit against the wall cause just don't want to take up a chair. Ask them to take a seat at the table, literally. We tend to when asked what we want to do with our careers, we say, well I want to add value and be happy. Men tend to say, I want to be CFO. And so if you can not let women get away with that answer and instead of, you know, ripping off the bandaid, you can say, well, whose job do you want next? What job do you want to do, you know really help us come to the conversation in a way that will be heard because we don't answer questions the same way, we don't communicate the same way, we don't act the same way. So I really think if you change your unconscious bias, become aware of it, but flip it to that conscious inclusion and really make an effort, it'll make a huge difference. The other thing I have to call out is the elephant in the room and it's money. You gotta pay us the same. And right now for me, you can do all those other things, but if it comes down to a life-changing moment, elderly care, child care, a spouse at home, a partner at home, and somebody makes less money than somebody else, generally speaking, the one who makes less money stays home. And unless you start paying women the same, they're going to stay home. So to me, start with the pay, you're not getting a bargain if your women in your department are getting paid less now they will leave. You will have a brain drain, pay them the same and then consciously include in the conversations in the career progression, speak the way we need to be heard and help us speak so you can hear us.Mitch: (07:34)You know, I really love that conscious inclusion and we have done a lot as far as unconscious bias and we just released a report on, you know, diversity, equity and inclusion. As you said, all of these, everybody's aware of them at this point, you know, everything going ...

Contact Laura Boyd: https://www.linkedin.com/in/laura-boyd-2598a853/Hunter Douglas: https://www.hunterdouglas.com/FULL EPISODE TRANSCRIPTAdam: (00:00) Welcome back to Count Me In, IMA's podcast about all things affecting the accounting and finance world. I'm your host Adam Larson and this episode, “Business Partners Developing Their Soft Skills”, is number 128 of our series. Laura Boyd, Vice President, Corporate Controller at Hunter Douglas joins us to talk about a topic not addressed enough among accounting professionals, the softer skills required in the profession. Everyone assumes accountants are all about the numbers and they are, but without the ability to collaborate across departments, they cannot be true business partners to the organization. Keep listening to hear about the specific soft skills required and how to develop them throughout your career.Mitch: (00:51)So our conversation today is going to focus on the soft skills and everyone typically assumes accounting and finance professionals, they're all about the numbers and we know they are but, I think everyone's starting to realize accounting and finance professionals really must possess and further develop these soft skills. So can you kick us off by sharing your perspective on this and let us know why you think that is?Laura: (01:14)Sure. Well, I think technical skills are obviously very important in our role as accountants and finance professionals. Our ability to analyze numbers and apply technical financial guidance, whether it's cost accounting or manufacturing accounting, or U.S. GAAP, IFRS otherwise goes a long way to supporting success in our careers. However, too much emphasis or rather not enough emphasis on developing and possessing these softer skills will really limit an individual's ability to properly support their business and develop their career in accounting. When we say softer skills, what we're really talking about is our communication style, leadership skills, team building skills, ability to make decisions, et cetera. Many of these skills are people type skills or interpersonal skills and since nearly every accounting role requires engagement with others in some way, shape or form, these become critical qualities to possess as your career progresses. In addition, people don't always think of accountants as customer service professionals, but in some way we are. Our business partners are our customers. They're on the receiving end of our hopefully quality work and we have an obligation to not only support them, but work well with them. And it takes several soft skills to be able to listen to a business partner and really collaborate with them. All of these things make finance professionals more well-rounded partners for the business, which is what our ultimate goal should be as accounting professionals. Well-rounded partner is an ally for the organization. If I could make an accounting pun, a well-rounded business partner is an asset for the organization. So while the technical side of our life is incredibly important and critical, it's becoming more and more clear that the softer skills are just as important for us and for our business’ success.Mitch: (03:29)So you already named a few of them. We talked a little bit about communication and teamwork and things like that. There are many soft skills and they're all important. But when it comes to being a business partner and really taking that step forward as a leader, which of these soft skills do you believe are most important for accounting and finance professionals, and why might that be?Laura: (03:51)Well, if you research around there's many resources out there from many folks that are much smarter than I am that'll tell you what's most important and why and what the right order is, et cetera. For me, in my experience, I think the three most important soft skills are interpersonal skills, communication and adaptability. So for interpersonal skills that's kind of a broad category, but it's a very important one. When I say interpersonal skills, I really mean the ability to build and maintain relationships and develop rapport with business partners and colleagues. Having good interpersonal skills is incredibly important when you're building a team, you need to have a strong foundation of trust and accountability for accountants and finance professionals this is invaluable. We should strive to be seen as an authentic partner for the organization and a person on whom people can rely upon and trust. Without that, we're just a bunch of number crunchers. Another important skill I think is communication. I think many people know there's many types of communication. There's verbal, written, and nonverbal like body language, facial expression, et cetera. But I think the one piece of communication that people really miss is listening. When people are listening to others, this is a fairly obvious statement, but you actually hear what people are saying and what they mean. Without strong listening skills, communication is really just a one-way street and probably not very effective. The better finance professionals are at listening, the better we are business partners because we're that much closer to the pulse of the business. And then finally I think adaptability is critical. If we've learned anything from the COVID pandemic, it's that we need to be flexible and adaptable. Now, traditionally accountants are not usually the most flexible people and I can say that because I am one. But, the ability to pivot and react to an ever-changing environment is critical. Our businesses are making fast and drastic and dramatic decisions practically every day. So we have to be able to switch gears and change direction as needed. In addition, I think it's important to be able to handle tasks and responsibilities that are a little outside the norm. By demonstrating a willingness to get involved even if you don't have all the expertise that's required. It's a changing world and I think accountants are a smart group of people who can contribute beyond the numbers if they're willing.Mitch: (06:57)You know, we at IMA, we have a leadership academy and we put out all these leadership development courses and we focus a lot on these softer skills. We just did one that focused on listening and listening skills, because it truly is so invaluable to just take a step back and make sure you're paying attention, you're listening and really absorbing the message that's being shared. So I can truly appreciate that and we've seen that become more and more important with our listeners here, obviously, but, with the organization as a whole in our members. With these skills, these skills that you identified as being most important, I guess my next question for you is when are they really most necessary or required? You referenced a lot about being a business partner, demonstrating these skills, at what career stage do you typically recognize somebody or maybe whether they do or they don't possess these softer skills?Laura: (07:51)Well in reality, these skills are really necessary from day one of your career. Most people in entry-level accounting roles have the necessary technical skills to do their job as required, or at least they have the requisite education beneath them on which they can build. And in addition, accountants will do continuing education classes or sit for an exam that gives them some credentials that are important down the line. And that is all fine and good and definitely necessary, but the fact of the matter is most accountants don't possess these softer skills right out of the gate and that's unfortunate. As I said earlier, good interpersonal skills are important for accoun...

Contact Carmen Rene: https://www.linkedin.com/in/carmen-rene-a063546/FULL EPISODE TRANSCRIPTMitch: (00:00) Welcome back to Count Me In, IMA's podcast about all things affecting the accounting and finance world. This is your host Mitch Roshong, and I'm here to introduce you to our guest speaker of episode 127, Carmen Rene. Carmen is the Vice President of Finance and Corporate Controller at Salt Health. She is a passionate leader who focuses on and emphasizes team management, multidisciplinary work groups, and coaching through obstacles. In this episode, Carmen talks about what it takes to be a leader and build teams around trust. Keep listening as we head over to their conversation now. Adam: (00:46) Simon Sinek said, “a team is not a group of people who work together. A team is a group of people who trust each other”. What does that quote mean to you and how you interact with your team? Carmen: (00:57) Sure. This is one of my, certainly one of my favorite philosophers, if you will, on leadership, but certainly one of my favorite quotes by Simon Sinek, because of what it really says to me is just because you are surrounded by a group of people and just because you work with a group of people, you don't necessarily have a shared vision and a common goal and a shared interest in being successful. And so without all of those things, I don't really think that you have a team that is focused on the same thing. And my belief is that, that objective or that dynamic comes when you trust each other. If you have a group of people who you know have your best interests and a common objective in mind, then I believe you have a team and you have an opportunity of being successful. Adam: (01:53) So what I'm hearing with that, what you just said is having that common objective, having that common mind, you know, how do you get to that common mind? That seems easier said than done. Carmen: (02:05) It's always easier said than done, right? I mean, I think that's a big part of what leadership is about all day long is a constant reminder and communication and check in about what we're looking to accomplish. It's often referred to as the why. What are we looking to get out of what we're accomplishing? What are we looking to accomplish? What are we trying to get and why? And if everybody understands the why, which I believe is a common interest, but, you know, oftentimes I work in accounting, right? It's very easy for people to go, we have to close the books, or because we have month end reporting, or we have investors, we believe we work for a company that we believe in, we're working towards an objective that we believe in, we have a team of people that we care about and we want them to be successful. So our why, is not the journal entry, our why is not finishing the books, the why isn't even for the most part the day to day. The why is where are we going and how do we know when we get there? And then we all understand that what I'm doing today is a step in that journey so that we can achieve, or, you know, land at the destination at some point. I think that's that common interest. And in many cases in business, we don't know what it is, right. If the common interest is I need a job because I need to pay my bills. That's not a common interest, that's Carmen's interest. But if the common interest is to leave mankind better than it was when we got here, because we work for a company that's working on a health solution or a cancer cure, or we're looking to have renewable power so that we can save the planet, right? Then all of a sudden we have a why that means something bigger than the journal entry. But my role in that big why is this team will be successful to ensure that this company has the financing that it needs in order to continue the projects down the path to achieve the objective. And if everybody on your team and keep in mind a team is very often multi-disciplinary, right? It's not just the, in our case, the team of accountants, the team of FP&A analysts, a team of treasury management, right? It's our executive team. It's our supply chain team. It's our friends on the manufacturing side of the house. It's our, everybody who manages the shipping and receiving departments, right. If we all understand the role that we play in that greater objective, then we show up to work, ready to give people the benefit of the doubt, ready to trust that we're all here at the end of the day to accomplish the same thing. Then I think you have a team, not just a group of people that you hang out with all day long. Adam: (05:17) You mean that makes a lot of sense. And you don't always work in with people who are doing the same thing you're doing. Many times there's people from multi-disciplinary groups who come together within a group and it seems like the things that you were just describing would work very well for that group, that multi-disciplinary group would have to understand the why in order to work well together. What are some steps you've taken to make sure that these types of groups are successful? Carmen: (05:47) You know, I think that the most important thing that you can do is be curious. And what I mean by that is, for example, I just put into place, purchasing policy. Kind of boring, right? But as part of that process, I spent some time with the, Ph.D. scientists who worked in laboratory, and we were having a conversation about how they use pipettes. I’m sorry pipettes and pipette tips in the laboratory. Now, as I mentioned, I'm an accountant, right? I never used a pipette tip in my life, but as members of the supply chain, I've ordered them before. So I was sitting with them for a day, observing them in the laboratory about how they use pipettes and how the process in an experiment is impacted or how the results are impacted by the process and how clean they can keep the sample. So literally every time they would move to a step to a next step, they would change the pipette tip. Now that seemed a little excessive to me for a minute. But then later in that day, or sometime later that week, I was reviewing results of something that had come out of the laboratory, product that we had to scrap, right, we had to throw it away. And I asked the question, well, why are we throwing this stuff away? What happened? They said, well we had some contamination in the processing. And it connected me back to that exercise of watching them prepare samples and changing the pipette tips. So all of a sudden I understand a whole lot better why we need pipette tips, why we need so many of them and where contamination can occur. And I brought that back to the purchasing policy around how do I set up a policy that enables them to have a blanket purchase order, right. A standing order for pipette tips, because they use them all day long, every day, all month. Right? So, because I understand, I have a much better understanding of the why, and this is a very small example, but I have a much better understanding of the why and how these products are used, so I can understand how I need to design a process that accommodates, not just me who happens to hate blanket purchase orders, but I can accommodate my scientists who wants to know that there's just going to be a constant stream of product being delivered to their laboratory so that their experiments aren't in any way altered or impacted. I hope that makes sense as a how you can bring multi-disciplinary teams could together to just have a simple conversation. So why their day to day is impacted by my day to day. Adam: (08:51) It's a simple conversation of being able to turn off your perspective and point of view for a moment and look at things through somebody else's shoes for a moment, and then suddenly your w...

Contact Bob Kolodgy: https://www.linkedin.com/in/bob-kolodgy-a5849214/About Bob Kolodgy: https://www.bcbs.com/about-us/leadership/robert-kolodgyBob's Interview for Forbes CFO Network with IMA's Jeff Thomson: https://www.forbes.com/sites/jeffthomson/2020/02/07/the-finance-leader-in-health-care-an-interview-with-the-cfo-of-blue-cross-blue-shield-association/?sh=418e829169acBCBS: https://www.bcbs.com/FULL EPISODE TRANSCRIPTAdam: (00:00) Welcome to episode 126 of Count Me In. Thanks for coming back and listening to IMA's podcast. I'm your host, Adam Larson and today's expert guest is Bob Kolodgy. Bob is Executive Vice President and Chief Financial Officer for Blue Cross Blue Shield Association, a national Federation of 35 independent community-based and locally operated Blue Cross Blue Shield companies. In his role, he is responsible for the blue's federal employee program, oversees the national employee benefits administration, and has overall accountability for Blue Cross Blue Shield brand management, and the associations finance, licenser, enterprise information technology, and information security areas. During his conversation with my co-host Mitch, Bob discusses the role of the CFO in building organizations ready for the future. Keep listening to hear his perspective on innovation, data, and value. Mitch: (01:02) So for our conversation today, we really want to emphasize the role of the CFO and making sure that they are capable of building organizations ready for the future. Now, innovation certainly is a term we use often in accounting and finance as organizations seek to create and increase value. So to start off, I would really like to know what innovation means to you. Bob: (01:31) Yeah, thanks Mitch and thanks for the opportunity to address IMA today, it's a great group and I love to be part of your events, so thank you for that. You know, with respect to innovation and accounting, let's put it in perspective and I've always said this at the beginning of innovation conversations with finance people. It's like, well, we don't want you all to be all that innovative, I mean, your accountants after all. And you need to be careful, right? So there's all kinds of, accounting principles and things like that. And we don't want you to be creative with that now, maybe be creative about how you do what you do, right? And so how can you as an accountant, or a finance person in an organization, actually innovate in a way that creates value. And so, when we try to take that apart, I look at value as the sum of three things, cost or efficiency, quality, and service. And so anyone can apply those principles to what they do I think, and add value. And so for me, innovation, particularly in accounting and finance in those disciplines really is focused more on those things and keeping them in balance, right? So innovation can accelerate any one of those things and as long as it does that without detracting from the other two, it's adding value. So for me, it's kind of that simple. And, when you look at what we've been in for the last, 14 or 15 months with the pandemic, it really sort of dots the eye on the need for innovation, right? We had to pivot in so many ways that we never would have expected so quickly and, you know, true innovations have come out of that in many forms and now its a matter of advancing those and in some cases bringing them to scale. There were certain things that came out of the pandemic that were really innovative and they're going to stick whether we expected that to happen or not. The time after the pandemic will be, not like anything we expected or planned on our prior trajectory. Mitch: (03:37) Yeah, I completely agree, among these different conversations that I have, I've certainly seen many organizations who have explained that they will be adapting some of these ongoing principles moving forward and making it part of their business, because of how they had to pivot and adapt in the last year plus. My next question, continuing on this topic, as far as innovation goes and the different components that you spoke about, what is specifically the CFO's role when it comes to initiating this change, enabling innovation and driving the anticipated results, evaluating those results, where does the CFO really make an impact? Bob: (04:16) Yeah, I think innovation and enabling new thinking and so forth is really an area where the modern CFO can differentiate themselves from the more traditional financially focused leader, and if it's done well, the CFO can become the corporation's architect for business value. I saw an article recently from Accenture on this, and I found it very, very interesting and poignant. CFOs are uniquely positioned if they apply certain levers that they have access to, to be able to create this differentiation and be the architect of business value. And just to list off the levers quickly, visibility of the whole enterprise, the CFO typically because they deal with all parts of the company has a view into what is going on in all those parts and the ability to see where synergies exist across those verticals, the ability to do analytics and have access to data across the enterprise is really critical. CFOs, not only have access to financial data, but now more and more operational and market data and, a variety of things that they can bring together to bring insights that are actionable to the organization. Understanding enterprise risk is a critical role that the CFO or critical conversation, or are part of the conversation the CFO can bring, because they can measure risk and they know that you may be able to take risks in one area of the company and balance that off with some protection and hedge and the other areas of the company. The CFO can and should have a strong relationship with all the C-level executives in the company, right? So there should be good working relationships there and the CFO's ability to mentor and discuss things with his or her peers in a way that brings to life this greater business value. And finally the financial authorities, I mean the CFO obviously has a financial authority within the organization and can reinforce the economic basis for investment decisions, right? So the CFO can bring voice to somebody else's idea, in a way that that person may or may not be able to do. And so, these things can really be exploited by better collaboration with C-level peers, by leading in with unique insights, whether it's based on data, unique analytics, perspective on risk, or what have you, and then taking ownership for ensuring that value is extracted from all of the new technology and data platforms. These things are proliferating coming up all over the place. And I think it's the CFO's responsibility to make sure there's a value equation attached to each of those, or if not, make sure everybody else understands that and make sure that expectations are aligned along those vectors and CFO needs to be able to cultivate a good commercial awareness and stay ahead of the curve of the industry, right? So whether it's regulatory change, federal policy changes, the business environment, changing the competitive landscape, changing or just trends and particularly important, I think is understanding what the potential disruptors are. You know, I'm in healthcare, there are disruptors all around our industry, whether you're talking about health plans, providers, pharmaceut...