What can a CFO do to be a stabilizing organizational force even if the economy and the world seem to be in chaos? Much depends on keeping financial goals manifest for the C-suite and the entire company.
How has James Rochette, CFO of Anaqua, a software company focused on intellectual property management, approached this challenge in his 25-plus years in finance? He spoke with our Katie-Kuehner Hebert about how finance can lead and support an organization during periods of rapid growth and global expansion.
High interest rates, economic volatility and heightened political risk have characterized the past year in finance. What is your advice for finance leaders during uncertain times?
Navigating the frequent disruptions and uncertainty in the economy and positioning the business for sustained success in 2024 and beyond all comes down to resiliency and stability. One asset of a company that typically flies under the radar but is essential to providing stability is intellectual property [IP]. In my time at several organizations, I’ve seen the value of IP remain resilient through economic downturns, such as in 2008 and 2020.
In times of uncertainty, companies often scale back their budgets as their customers pull back spending. To retain a competitive advantage with little new investment, many businesses fall back on innovation and momentum around patent and trademark filings. Properly managing a company’s IP portfolio will keep the core of the business running despite stripped-down budgets. While more immediate priorities can overshadow IP management, it’s worth prioritizing in any 2024 financial plans.
Based on first-quarter planning and budgeting conversations, what are the notable areas CFOs should monitor for the rest of this year?
Generative AI is at the top of many minds, but more generally, the digitalization of finance will be a crucial topic in 2024. The goal of digitalization is to collect as much data as possible while streamlining manual tasks that drain time and resources. Integrating automation into the finance department to handle more administrative tasks allows workers to spend their valuable time on more strategic tasks, like analysis.
An excellent time to incorporate automation is during a period of company growth, such as a merger or global expansion. Automation can help a finance team improve productivity and keep up with the additional volume of input from growth without needing to increase headcount.
I’m also closely monitoring foreign exchange and interest rates and acting early to mitigate those external factors. Global companies like Anaqua are very exposed to variance caused by rates, so CFOs must anticipate these and balance out these variables.
You have experience operating in the European market. What advice would you offer CFOs working with the rest of the C-suite to build a global enterprise?
For many companies, global expansion is a natural growth phase, but it can bring unique challenges for the finance team. I started my career in Europe, lived in Asia for some time, and now I work in the U.S. There are cultural and financial differences CFOs should be aware of in different parts of the world; it’s essential to prepare and research before expanding into new markets to ensure the finances comply with local accounting regulations.
Even with all the planning in the world, however, CFOs need to remain adaptable. Just as crucial as developing financial strategies and leading the dedicated finance team is being a leader and supporter of the organization’s other departments, especially during periods of company change.
Can you elaborate on how the finance time can lead and support the rest of the organization?
Finance drives the bottom line. Part of that is developing strategic goals and workflows to ensure business runs efficiently. The CFO must effectively communicate what each department needs to be successful. Expanding into a new market can indicate it’s time to level-set with other leaders. That requires relaying the company’s financial goals and outlining each department’s part in achieving those goals.
Adopting a service mindset and positioning finance as a strategic partner will serve a CFO well during trying times. Doing so improves the chances that financial goals and initiatives will be respected and adequately integrated across departments.
Another aspect to stay on top of during global expansion is ensuring intellectual property remains protected. To obtain patent protection in another country, a company often needs a foreign filing license from the office that initially granted the patent. Getting ahead of these licenses and filing patent applications in new areas of expansion is essential to selling products and enforcing patent rights worldwide, protecting what could be the company’s primary revenue stream.
