Sandeep Reddy, Chief Financial Officer at Guess?, Inc., outlined directives and key questions for CFOs to ask themselves to determine their impact as leaders.
At the outset of his keynote presentation at the 2017 Chief Financial Officer Leadership Forum held on May 9 in Los Angeles, Reddy said that when he started at Guess? four years ago, he thought he knew a lot. “We, as CFOs, can know all the concepts, but what to do with them is more important that knowing what they are.”
Here are the top five directives that Reddy believes CFOs need to address:
1. “Be a thought leader and partner to the CEO and executive team in strategy development based on a thorough and deep understanding of the business,” he emphasized. “If you don’t develop strategy with a thorough and deep understanding of the business, it’s not going to work. To effectively dialogue with the CEO and executive management team, you have to walk in their shoes.”
2. “Be a steward of value creation and make sure there’s consistency and integrity between investment decisions and the strategy that’s been defined,” said Reddy. “New capital deployment is a critical element, but maintenance capital is a big piece as well.” he said.
“New capital deployment is a critical element, but maintenance capital is a big piece as well.”
3. Develop and deliver KPIs (key performance indicators) that are true drivers of economic value. “This may seem obvious, but if you don’t have the right KPIs, you can get into real trouble. It’s necessary to identify which KPIs are the most critical drivers of economic value for your business,” said Reddy.
4. Relentlessly focus on the operation-driving accountability for KPI results. “Whoever is accountable for delivering a particular KPI is held accountable for the results of that KPI. If this isn’t done, it all stops right there. All the other work comes to naught if we don’t hold people in the organization accountable,” he warned.
5. Be aware of your impact as a leader. “This is the most important of the five. It’s through your leadership that you make the other four happen,” he stated.
Reddy provided this strategy for impactful leadership:
• Constantly look to catch signals of shifts in the environment and business landscape by…
• Asking lots of questions—and, hopefully, some of the right ones—to…
• Create a combination of all inputs to inform the evolution of the company’s strategies.
“You’ll receive weak signals of what’s coming before it arrives,” said Reddy. “The sooner you catch those weak signals, the better you’re able to respond to them. This is easier said than done. How do we do this? We ask a lot of questions—of ourselves, of others we talk to. You need to drive down to the last denominator until you get an answer you’re satisfied with. This will give you collective wisdom you can apply to developing strategy,” he said.
“Here are key questions for finance leaders to ask themselves to improve communication with those in their company who can provide essential information and wisdom:
• How many barriers do people have to cross to talk directly with you? “Be approachable, be available, and be open to feedback.”
• How much of your typical workweek is spent outside your office or headquarters? “Getting out of your office—visiting people in the field or your businesses in other parts of the world—gives you a perspective you can’t get in any other way. And you’ll get a lot more input.”
“Getting out of your office—visiting people in the field or your businesses in other parts of the world—gives you a perspective you can’t get in any other way.”
• When was the last time you were dead wrong about something at work? “We need to try our best to be right as often as we can, but we need to acknowledge that we’ll be wrong a lot.”
• How quickly did you uncover your last mistake? How quickly did you change course? “Especially when we have a decision we’re impassioned about and we’re presented with evidence to the contrary, our response is to defend our decision even more strongly.”
• How often do people ask you uncomfortable questions at work? “Make sure you’re always outside your comfort zone, because this forces you to be creative.”
“Make sure you’re always outside your comfort zone, because this forces you to be creative.”
• How many questions do you ask versus statements you make in typical conversations? “We, as CFOs, are expected to be leaders, so we’re invariably in broadcast mode and often aren’t in the habit of asking questions.”
• How often do you wait silently (three seconds or more) for someone to answer a question you asked? “This is my favorite,” said Reddy. “We often get impatient with people who take a few seconds to answer our questions.”
• How many times this week have you said “I don’t know” in response to a question? “This response opens up dialogue and the problem-solving process.”
• When was the last time your questions gave rise to a catalytic change in the company?
In summary, Reddy stated, “Your effectiveness as a CFO has more to do with your leadership skills than your technical skills. Never forget this simple fact as you plan your day, week, month, year—or career, for that matter.”
ABOUT SANDEEP REDDY:
Sandeep Reddy was appointed to the position of Chief Financial Officer of GUESS?, Inc. in July 2013. He previously served as the Company’s Vice President and European Chief Financial Officer, where he was responsible for all aspects of the Company’s European finance functions including financial planning, treasury, accounting and tax. From 1997 to 2010, Mr. Reddy served in a number of positions of increasing responsibility for Mattel, Inc., a leading global toy manufacturer, ultimately serving as Vice President of Finance and Supply Chain for Southern Europe (France, Spain, Portugal, Italy). Mr. Reddy has an MBA from Cornell University, a BA (Hons) in Economics from Delhi University, and is a Chartered Financial Analyst.