CFO - How to sustain excellence in your company, by NYC Advisors, LLC

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CFO Best Practices for CFO Best Practices for Sustained ExcellenceSustained Excellence

Strategic Turnaround and Business Advisory Services Strategic Turnaround and Business Advisory Services

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Achieving Sustained ExcellenceAchieving Sustained Excellence Common sense approach Keep cost down Customer service Risk management Financial discipline – know what to invest in…and

what not to invest in… Continuous improvement Benchmarking

• Never look just inside your company• Look inside your industry• Look outside your industry

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Achieving Sustained ExcellenceAchieving Sustained Excellence Leadership

• Communicate your strategy inside and outside• Set goals and objectives• Lead company culture – drive it throughout all

levels of the organization Employees’ involvement and empowerment

• Ask employees how things can improve; what works and what doesn’t work

• Set up breakfast/lunch meetings with small groups of employees from different departments

• Align compensation plans to goals and objectives

• Employee development – train, educate, invest in their skill set

Business TransformationBusiness Transformation Always look forward

• where do you want the company to go How to get there

• Set a multi-year plan• Look at each business and review:

Business model Skill sets needed by employees

Communication BEFORE, DURING & AFTER is important

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Business TransformationBusiness Transformation

Plan for multiple scenarios so that the organization is better prepared to deal with changes, such as:• Economic trends• Consumer trends• Regulatory environment

Stress Test your company• Identify company’s weak points in good

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Business TransformationBusiness Transformation What Happens if…What Happens if…

Lower Revenues • Lower sales overall• Customers are leaving (customer concentration)• New customers are hard to come by

Lower Gross Margins Expenses are growing faster than expected R&D – lack of new products Cash is tight

• A/R - Slower collections• A/P – pay within terms?

Financing• Bank lines are tighter• Higher interest rates

Human Resources• Do you have a strong management team?• Who can replace you in case of vacation, emergency?

Business TransformationBusiness Transformation Establish trigger points for when to

implement the contingency plan Trigger points can be monitored by

establishing benchmarks (dashboard) Example:

• Sysco established these monitoring procedures:

“Black Swan” planning session each Friday the 13th

Executive committee weekly meetings

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Business TransformationBusiness Transformation Remember:

• Change is important but must be done correctly

• Strategy review is part of a regular business review and is not just an exercise in numbers

Keep challenging the status quo

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The Strategic CFOThe Strategic CFO

It’s more than just accounting and finance

A CFO ought to bring:• Objectivity• Common sense• Large role in developing strategy• Ability to look forward (accounting is

“looking backward”)

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The Strategic CFOThe Strategic CFO Immerse yourself in the business:

• Operations, IT, HR• Sales and Marketing• R&D

Must understand:• Technology• Products• Customers• Employees• Competition

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The Strategic CFOThe Strategic CFO Result:

• Ability to provide additional value to business units/departments

Structure your department to allow for scaling

Have the right infrastructure Have a solid team Don’t micromanage – delegate!

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The Strategic CFOThe Strategic CFO

Manage growth Manage risk Reduce cost Increase efficiency by:

• Simplify• Standardize• Centralize• Automate

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The Strategic CFOThe Strategic CFO

Ask questions such as:• Why are we doing this?• Why aren’t we doing this?

Challenge the process Never accept “because we’ve always

done it this way”

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CFO-CEO RelationshipCFO-CEO Relationship There must be chemistry Clarity around role of CFO (can also function

as COO, IT, etc.) Trust CFO should be an advisor:

• Have a point of view• Contribute to the conversation• Develop strategy

A strategic CFO is an extension of the CEO

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How to Ensure Success?How to Ensure Success? Set up internal Systems & Controls:

• Internal control is defined as a process affected by an organization's structure, work and authority flows, people and management information systems, designed to help the organization accomplish specific goals or objectives

• Checks & Balances• Prevention and detection of fraud• Assets and resources protection (human, tangible &

intangible)• Consistency and accuracy of procedures and

reports• Policies & Procedures Manual (accounting, HR, Ops)

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Internal Systems & ControlsInternal Systems & Controls Systems (technology)

• Accounting (audit trail)• Sales and Marketing• Manufacturing• ERP

Systems (procedures)• Accounting policies and procedures manual

Accounting team – separation of functions Review process of financial and other reports

• Operations Manual• Human Resources Manual• Disaster Recovery (internal - technology; external

– utilities, fire, weather)

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Internal Systems and ControlsInternal Systems and Controls

Quarterly & Monthly Reviews• Budget vs. Actuals (P&L, B/S, Cash-

flow)• Budget and forecast• Key Performance Indicators “KPI”

(sales, ops, financials, R&D, projects)

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Best PracticeBest Practice Create/Update Strategic Business Plan

• Mission, Goals and Objectives• Sales and Marketing• Key Business Drivers• Risks

Annual Budget Process• Based on last year• Bottom Up• Zero Budget• Who participates • Budget includes financials, marketing and sales plans,

projects, manufacturing capacity, inventory levels, other• Risk assessment (including insurance policies)

Daily Dashboard• KPI

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The Ideal DashboardThe Ideal Dashboard A well designed dashboard usually

consists of:• Important information that can help the

user quickly analyze if his business is moving towards its goal

• Highlights exceptions • Operational data primarily in the form of

metrics and key performance indicators• Unique to each company based on key

business drivers

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Yoav M. Cohen – Managing Partner NYC Advisors LLCYoav M. Cohen – Managing Partner NYC Advisors LLC

Yoav brings over 25 years of experience providing successful financial and operating leadership. He is an innovative negotiator and dealmaker, with proven ability to uncover and implement unique and workable solutions for challenging business situations. Yoav has experience in Mergers & Acquisitions, Strategic Planning, Finance & Operations, Restructuring, Business Development, Team Building, and Business Analysis & Management.

Yoav co-founded NYC Advisors, LLC in 2003. Since then, he has served as CEO of a plastic lumber company; as CFO & COO of a publicly held medical device company; interim COO of a pet toys distributor; interim CFO of a linen manufacturer; and as a consultant, mentor and business advisor to numerous other companies.

Prior to co-founding NYC Advisors, Yoav was the CEO of Casa Mayo LLC, a direct marketing organization he co-founded. Before that, he was the COO of a technology incubator, where he led 10 investments and private placements from evaluation to closing, advised CEOs of portfolio companies on financial and operational issues, and served as the Chairman of the Board of a publicly held software company, leading a successful turnaround.

Prior to that, Yoav was the CFO of several publicly held companies, and he spent over 8 years as a controller at Citibank and Bankers Trust.

Yoav is a partner and a board member at Stark Business Solutions, Inc., and a mentor and Advisory Committee member at Baruch College Executive on Campus Program.

Yoav holds a BBA and MBA in Finance from Baruch College In New York

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THANK YOU!

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