Industry Immersion Exposes Students to Life as a CFO
From startups to public companies, finance is never boring
Most would agree that CEOs lead companies. But really, every CEO has an equally powerful partner: their trusty chief finance officer.
The CFO holds many core functions and often reports directly to the board and investors.
The CFO for Technology Industry Immersion at the UC Davis Graduate School of Management was a rare opportunity to listen to and engage with CFOs from different walks of life, all working in technology. It was an eye-opening experience.
One of the first things we learned from the course is that the CFO life is never boring. Similarly, each class was jam-packed with activity. Sessions were split into three parts: the first hour for guest speakers to present, followed by an hour-long group case study and wrapping up with student presentations and feedback from speakers.
“Like a live studio production, where she is the director and the students are both the audience and actors.”
Immersion coordinator and Professor Ayako Yasuda likened the class to a live studio production, where she is the director and the students are both the audience and actors.
The quick-moving format was challenging to keep up with, but offered a variety of hands-on learning opportunities. Each session exposed students to various challenges faced by CFOs and finance executives. The guest speakers often started by describing life as a CFO and how they got to their positions, followed by specific cases from their career that helped illustrate key concepts.
What’s it like being a CFO?
The role of CFO can be hard to define, but one of the first things many speakers made clear was that being CFO is not just about accounting.
Chris Chillingworth, partner at CFOs2GO, describes accounting as a “rearview mirror”, whereas CFOs maintain a forward-looking perspective. CFOs are strategic decision makers who need to understand their business and trends in the market.
CFOs must also be experts in many domains. Margaret McCarthy, CFO at WideOrbit, called this the “polyglot skillset.” The range of responsibilities of CFOs include investor relations, legal, tax, insurance, HR, systems and more. Of course, CFOs aren’t born experts in all these areas; they learn them throughout the course of their careers.
You can’t talk about life as a CFO without mentioning the risks. CFOs personally sign for corporate audits, mergers and acquisitions (M&A) and other events, and are exposed to lawsuits that may arise. This makes them very aware of risks. CFOs describe themselves as being the “adult in the room,” and must assess the risk profiles of different initiatives.
What challenges does a CFO face?
CFOs must manage through all stages of a company’s growth. Our class heard from startup CFOs, like Kyle Wakamiya from Origin Materials, and public company CFOs, like Mike Kourey, who was at Aruba prior to its acquisition by Hewlett Packard. A major part of this is making sure companies have enough cash to stay solvent. If not, CFOs must manage budgets and secure new funding.
M&A is another major area for CFOs. David Cole, vice president of finance at Intuit, has personally worked on over 100 M&A deals throughout his career. He says M&A is a fact of life that nearly every employee will likely experience over the course of her career. CFOs not only need to make sure they get a fair price, but also plan the integration of companies in order to maximize the potential value of deals.
CFOs also manage just about everything in between. Companies can face a crisis of growth, their stock price tanking, a rapid adoption of new technologies and competition from outside firms. CFOs must manage their companies through all the ups and downs. It’s like having a front row seat on a rollercoaster.
The Immersion course gave me a new perspective on what it means to be CFO. It’s much more entrepreneurial than I’d imagined, and covers way more than just finance and accounting. Mike Kourey describes the road to CFO as a “circuitous journey.”
And for those who aspire to become a CFO, Margaret McCarthy advises students to seek out diverse positions and situations throughout their careers. Because we all now know that CFO life is never boring.