What Separates A Great CFO From A Good One?

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Max Schwendner, CFO of Alorica, goes beyond table stakes to the professional qualities that matter most.

What does it take to be a successful CFO? For one, intellectual curiosity—delving 

beyond the “what” and “how” to also understand the “why,” to better integrate the financials into the broader picture.

So says Max Schwendner, CFO of Irvine, California-based Alorica, a customer services BPO company. Schwendner spoke with StrategicCFO360 about the insights he’s learned on his non-traditional journey to the top finance seat: prior to joining Alorica, he spent more than a decade on Wall Street, primarily at J.P. Morgan. During that time, he held leadership roles in the investment bank and private equity divisions of the company serving as portfolio manager, vice president in corporate finance/M&A; chief of staff to the CEO of investment banking; and various other positions.

Additionally, Schwendner has served in leadership positions on several portfolio company board of directors, was chairman of several limited partnership committees and co-founded a small film production company.

What are some proven strategies and techniques that financial professionals can leverage to best elevate themselves from customary financial management roles, such as portfolio and wealth managers, to the CFO level?

Throughout my career, I’ve been very fortunate to work with many top-tier, insightful executives and I’ve learned valuable lessons from each one of them. In particular, during my tenure at J.P. Morgan, I had several mentors who were incredibly intelligent, insightful and curious people and I’ve sought to emulate each of their best qualities in how I operate today.

One of the most important aspects I’ve learned through my career is the importance of maintaining a sense of intellectual curiosity—asking smart questions to understand not only the “what” and the “how,” but also the “why.” From my chair, the best leaders—financial or otherwise—are ones not limited by role and responsibility, but those who try to think broadly and integrate the financials into the broader picture. Oftentimes, there is a far greater story to uncover and tell than just pure dollars and cents.

Taking a non-traditional path to the CFO seat is rare, but if you have an aptitude for finance, you can create your own definition of the role. What I mean is that I’m not defined solely by my ability to put together financial statements. Rather, I view myself as a partner to the business, which involves taking a more consultative approach to managing a corporation’s financial health rather than just focusing on an individual financial metric. One parting thought: don’t be afraid to be yourself, show your personality! It dispels the stereotypes often associated with accounting and finance professionals.

In consideration of the importance and responsibilities of today’s modern CFO, what are the critical skills and capabilities one needs to be successful as a C-Suite financial management executive? How and why are these so essential to the position?

The hard skills are just table stakes—every finance professional has those. The soft skills are really what separates a great CFO from a good one. CFOs are expected to have the answers to difficult financial questions; that’s a given. The finesse and real skill lie in answering the “why,” which requires a deep understanding of the entire business so one can offer simple explanations with proper context. A CFO needs to be able to provide a view of the business at 100, 1,000 and 10,000 feet—and explaining things simply while not being pedantic.

What are the primary differences from being a CFO at a product-driven company from those of a services provider such as Alorica?

From a financial perspective, there are not too many differences between a product-driven company and a services provider. Dollars and cents are dollars and cents. Revenue is revenue, and expenses are expenses. However, a service-oriented business is more complex to manage in some sense because it’s driven by people, which means there’s variability. Solving for personal dynamics is challenging because it’s inherently personal.

With so many companies being service providers these days, what proactive stances should CFOs at these companies take to ensure the long-term financial vitality and sustainability of their respective organizations?

Every CFO’s job is to mind the store: spend money on the right things, not the wrong ones. I try to focus the company on a simple goal—save as much money as possible on non-strategic, simple things so that money can fund solid investments in things that will advance, propel and improve the business.

My philosophy is pragmatic and my approach is to understand the larger picture within which a decision is being made. So contextualizing what an investment, decision or action will drive is essential. It’s that knowledge and insight that informs these decisions because many of these moves are intended to enhance operating efficiency, employee productivity, the product/solutions portfolio—now and into the future.

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