Business Lessons from 3 of the highest-paid CFOs
The world of a Chief Financial Officer (CFO) is quintessentially quantifiable, but the cold, hard, beautiful numbers tell only part of the story. Beyond the C-suite title, CFOs have stories and philosophies more closely tied to passion than position. Here are some business lessons learned from three successful people who have earned both their money and their stripes.
Don’t Fear Change
You’re a team player, and regardless of whether you’re the go-to slugger or a clutch shortstop, you feel connected — and even indebted — to the rest of the team. But just ask Babe Ruth: Even good players get traded.
In fact, some of the best players ask for a trade. CFO David Denton left CVS for Lowe’s at what many would consider a bad time. Even though the CVS stock prices had been steadily dropping since July 2015, it had started to climb the 5 months prior to Denton leaving. Undeterred, Denton didn’t look back and neither did Lowe’s and their stock has risen 13.3% since he changed rosters.
Think Outside the Box
There are countless resources from which you can draw inspiration, but don’t forget to do your own thing. Just ask Google CFO Ruth Porat. Porat’s work as a VP and CFO at Morgan Stanley is highlighted by saving Amazon. In the early stages in 2000, as the needle was approaching the dot-com bubble, Amazon went to Porat for help.
Amazon needed to adjust their capital structure in case suppliers got nervous and demanded to be paid sooner for their products or services. Porat suggested tapping European investors for the cash. Seeing the looming needle, Porat and the team sweetened the deal: The price of the capital was high (6.9%), and the $672 million in bond included flexible conversion terms. However, Porat’s leap outside the box worked, as Amazon’s market value is currently flirting with $1 trillion.
Diversify Your Experience
Even though a CFO is a prime player at any organization, committing to the company to the point of isolation can be costly. A CFO's job is to solve money problems. Author Stephen King is famous for his belief that good writers are good readers. CFOs have to be good “readers” of other companies.
Kenneth Goldman, CFO of Yahoo, does his reading by serving on the boards of directors, not only of Yahoo Japan but also of other firms seemingly outside the bounds of his industry. Finding the time to serve on multiple boards may seem like a challenge, but the investment will pay off. Serving on a board gives you an up-close look at the financial strategies of a different business and in a fresh context. Like a writer who reads, you expose yourself to novel and unique creative possibilities.
David Denton, Ruth Porat and Kenneth Goldman teach a powerful lesson: They’re CFO examples who can be counted on and never counted out, it takes more than the ability to create a strong, balanced portfolio. The strength and balance that matter the most for personal development come from within, from making bold choices, and from creating a diverse and evolving plan for yourself and your company.
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