Alan Haughie, Senior Vice President and Chief Financial Officer for The ServiceMaster Company, presented a humorous explanation of the tricky business of being a CFO.
“I want to start by addressing what bothers me as a CFO,” said Haughie by way of introducing his keynote presentation at the 2016 Chief Financial Officer Leadership Forum held on April 21 in Atlanta. “For example, what’s going on in other CFOs’ minds, what do they worry about, are those experiences common and shared? It doesn’t work to ask them what it’s really like to be a CFO. They’re not going to tell you. But I will.”
“It doesn’t work to ask CFOs what it’s really like to be a CFO. They’re not going to tell you. But I will.”
Haughie then asked the question, “What’s a CFO for?" He said a wise man once told him that a CFO has three purposes:
• To deal with complex things. “There’s no routine to being a CFO.”
• To deal with new things.
• To deal with difficult things. “This is different than complex things,” Haughie pointed out. "A political problem between yourself and another C-suite member is difficult but it’s not usually complex. We have to deal with the most difficult issues because we’re credited with having a greater understanding of what’s going on with the company than do other C-suite executives. We’re knowledge holders.”
The complex issues require the most thinking time, whereas the difficult and new issues are more behavioral, said Haughie.
The next question from Haughie was, “What’s a good CFO?” His answer: “A good CFO is one who embraces the above three challenges. The art form for dealing with complex issues is distilling them into actionable items. The CFO takes complex issues and turns them into simple language that your operating partners can do something with. They look to the CFO to do that.
“Dealing with the new means being open to new ideas and trying to think in an original way,” explained Haughie. "We need to get over our aversion to embracing ideas that weren’t ours."
The most difficult of the difficult issues a CFO has to deal with, in Haughie’s opinion, are ethics and integrity. “There was a time—30 or 40 years ago—when the CFO was expected to think of new ways of overcoming the rules. We now know what happens when we break those rules. It’s our job not to do this, and I think there needs to be much more discussion around ethics, because we all face those challenges.”
Continuing his play-on-words questioning, Haughie asked, “What good is a CFO? Generally we hear this when the business is going belly up. We don’t want to ever hear this question!”
“The most difficult of the difficult issues a CFO has to deal with are ethics and integrity. I think there needs to be much more discussion around ethics, because we all face those challenges.”
“What’s a CFO good for? About two-and-a-half years,” was Haughie’s humorous reply. That’s the average tenure.
“The most important role of the CFO is financial storytelling,” said Haughie. “Talking to the C-suite and pushing them into action derives from the art of communication. Going back to the three things I mentioned previously, it’s difficult to get the level of detail and the language right when we’re communicating.” As an example, Haughie pointed out that his self-defined “pompous” manner and the fact that he has an English accent are immediately off-putting to some people. “Some people think I’m talking down to them, no matter what I say. So we have to be aware of all aspects of how we communicate—getting the language right, and the tone. We have to look for those glazed expressions when we’re talking to people.”
“We have to be aware of all aspects of how we communicate—getting the language right, and the tone. We have to look for those glazed expressions when we’re talking to people.”
Foreshadowing is part of CFO storytelling, noted Haughie. “If you think something might happen but you can’t be sure, you have to find a way of communicating it.” The trick is not being alarmist but being forthcoming about real possibilities.
On Haughie’s last slide were three words: “CFO for good.” This is a play on words that refers to the point about ethics, he explained. “If you’re a CFO who’s ‘for’ good, you’ll be a CFO for good.”
ABOUT ALAN HAUGHIE:
Alan Haughie joined ServiceMaster in September 2013 as senior vice president of finance and chief financial officer.
Haughie came to ServiceMaster with tremendous international experience, having served since 2010 as senior vice president and chief financial officer of Federal-Mogul Corporation, a diversified $6.7 billion global supplier of aftermarket products for automotive, light commercial, heavy-duty, and off-highway vehicles as well as power generation, aerospace, marine, rail, and industrial equipment. He concurrently served as CFO for the company’s power train division, its largest business segment.
Haughie’s 20-year career with Federal-Mogul included multiple international roles including more than five years as vice president, controller, and chief accounting officer for the company’s global operations as well as various financial planning, analysis, and management positions in the company’s European aftermarket business, based in Manchester, U.K.
He joined Federal-Mogul in 1994 after working in a number of audit roles with Ernst & Young L.L.P. in the United Kingdom.
Haughie is a chartered accountant and earned his bachelor’s degree in mathematics at the University of Manchester.