GrowCFO Show

Kevin Appleby is joined by GrowCFO mentor, Susana Serrano-Davey, to discuss storytelling and how it is useful in the CFO role. Where does storytelling come into the CFO role? No matter what job you are in, you can think about becoming a good storyteller. Not only do you want to get your point across but you also want to make an impact and getting people on board. You can use the recipe that storytellers use and apply it to our own communications. It is a presentation technique which uses stories that are memorable. You also want to give a vivid description in order to evoke emotions and insights from others. Using scenarios that people can relate to will make them pay more attention. What makes a good story?  Susana gives us a mnemonic that shows the key features of good storytelling. This is HUSSLE: Hero – This is where you have to set up context. The context is what makes the audience care. You can also help this by creating a rapport between the hero and the audience. You can make them feel there is similarity between them and the hero so they will care more about what happens to the hero. Uphill struggle – This will start to build momentum and create drama. You should now present the problem. When presenting something and there is a problem within it you want to see the problem from the audience’s perspective so they can connect emotionally. This can link to a marketing technique used which agitates the problem before you give the solution. Show – It is always important to put on a good show. Use words that are impactful along with body language and tone of voice. It is not just what you say but how you say it. In your story you want to have a wow factor. Susana suggests using colour or images, something that stands out. You also want to be aware of any unintended consequences of what you might show people as the same thing can mean different things to different people. Solution – It’s essential to present or propose a solution. This brings the tone. Although there is a problem, it can’t be all doom and gloom but bring it towards a happy ending. When you think about the people you enjoy working with they usually are the people who will come to you with a solution and problem not just a problem. In a story this is where you include how the situation was solved. Learning – The most powerful thing from the story is what can be learned. Fixing a problem on it’s own is pointless, you want to see the problem as growth for the future and preventing problems in the future. What can you implement to help you in the future? You need to be able to come clean about things that have been broken in the past, the important thing is what you are doing to prevent it from happening in the future. Extraordinary – This is about making your presentation memorable. It is important to do this so your audience will go away remembering the key points. It will also help you remember what you are talking about. You don’t want people to forget your key messages and you can do this by using mnemonics, your imagination and imagery. Storytelling is to make the message memorable as if you only show them numbers they will not remember as much. It will also help to get buy-in from people which, in the CFO role, you are constantly looking for. What stories to tell?  Personal stories can be useful by giving examples or metaphors. The examples may appear not relevant as it may not be identical to your current problem but it may be similar giving you more insights. At work we often shy away from sharing our personal information. Showing snippets of who you are as a person can be an asset as it shows you as yourself not just your professional side. You want people around you to have the confidence that you can solve the issues. You can help this by showing your track record but including your problems in this too. The most powerful capabilities builders are the examples of very challenging situations and failures which will allow you to deliver it successfully next time. If we have experienced similar situations it can help with the debate around what we do with a problem. Storytelling about doing something similar and then showing the results of it can be a useful way of adding to the debate. You are not disagreeing which can be emotive, but the story illustrates why you think it wouldn’t work and why it didn’t work in that situation. You can extend your analysis of a current problem by relating it to a previous story. Find out more about GrowCFO If you enjoyed this podcast you can subscribe to the GrowCFO Show with your favourite podcast app. The GrowCFO show is listed in the Apple podcast directory, Google podcasts and many others. Why not subscribe there today? That way you never miss an episode. GrowCFO is a great place to extend your professional network. You can join GrowCFO as a free member today and take part in our regular networking events and webinars.  Premium members also have access to our extensive training centre. Here you can enrol in our flagship Future CFO or Finance Leader programmes.  You can find out more and join today at growcfo.net

There’s a big gap between the skills and competencies you need as CFO to those you have as Head of Finance. The GrowCFO competency framework provides a great way of assessing your readiness for the top job. We use the framework as part of the Future CFO Programme. It usually highlights a lot of potential development areas for our students. One of the challenges for you as a prospective CFOs is prioritising your personal development plan to address the most important competencies. Module 3 of the FutureCFO Programme is all about that prioritisation so that you can effectively fast track your personal development plan. In this podcast Kevin Appleby and Dan Wells give a preview of Module 3 of GrowCFO’s Future CFO Programme and show how you can successfully accelerate your development to get to your dream CFO job. The GrowCFO Competency Framework In Modules 1 and 2 of the Future CFO Programme, you complete the GrowCFO competency framework and identify your biggest issues. These give you powerful insight into your current skills and challenges; how these rank against your peer group; and where your opportunities for future development lie. The competency framework is split down into 45 different things. Most people on the Future CFO Programme find that they score well in relatively few of the 45. The potential gap between where you are now and where you think you need to be becomes somewhat daunting. Don’t worry. You don’t need to have expertise in all 45 to become a good CFO. The purpose of module 3 is to take that assessment, and develop a sensible development plan. This allows you to fast track the particular skills you need to make that initial step up to the CFO role. The techniques you learn in this module will also take you beyond stepping up. It will provide you with a way of planning your own development for many years to come. Everybody’s Personal Development Plan is different The first thing to remember is everybody is different. You have your own unique set of strengths, skills and experience. You will build on these and that will make you a unique CFO. The remit of the CFO can be wide – there is no standard job description. What the CFO does varies from company to company. The role of the CFO in a startup or high growth organisation might also be very different from that in an established corporate.  The CFO will be the number 1 in the finance function. What the number 1 does is often determined by what your number 2, direct reports and wider team can do to support you. The CFO is the co-pilot to the CEO. The role of the CFO is often determined by the support that the CEO feels they need, both to complement the CEO’s skills and to bring something extra to the business.  In short, there is no one size fits all. So, in determining your development plan you need to decide what sort of CFO you want to become and prioritise what is important to you. Module 3 allows you to address this systematically. What do you do in module 3? There’s a 5 step process and we suggest you use the next 10 days to work through it to build your own personalised development plan. Step 1 – Current state assessment. Where are you now? Step 2 – Set a Vision. Where do you want to get to? Step 3 – What do you need to do next? Set your priorities for the next 90 days. Step 4 – Make space to take action. Identify where you add the most value. Step 5 – Build a plan. A plan on a page with clear milestones for each of the next 12 weeks. Find out more about GrowCFO If you enjoyed this podcast you can subscribe to the GrowCFO Show with your favourite podcast app. The GrowCFO show is listed in the Apple podcast directory, Google podcasts and many others. Why not subscribe there today? That way you never miss an episode. GrowCFO is a great place to extend your professional network. You can join GrowCFO as a free member today and take part in our regular networking events and webinars.  Premium members also have access to our extensive training centre. Here you can enrol in our flagship Future CFO or Finance Leader programmes.  You can find out more and join today at growcfo.net

Kevin Appleby is joined by GrowCFO’s Founder and CEO Dan Wells to discuss the launch of GrowCFO’s Finance leader support Forum. Finance leader support Forums overview GrowCFO’s community support Forums help finance leaders to share knowledge, seek advice and solve common issues. They allow free or Premium members to quickly benefit from the combined knowledge and experience of your finance leader community. Many finance leaders are spending too much time delivering recurring finance tasks that add little value to your business. These Forums contain valuable insights regarding how you can automate, outsource, delegate or ditch such tasks. As a result, you will have more time available to make a bigger impact in your role. As you get more involved in strategy, you will face challenges that you have never experienced before. In most instances, your community will have already conquered such challenges and can easily share the solutions with you. This will save you huge amounts of time and allow you to quickly identify the best solutions. How many finance leader support Forums are there? There are two finance leader support Forums. Of these, the main Forum is called Finance Leaders Community and is designed for all GrowCFO members. This is where the majority of the community discussions take place and is the ideal place for you to discuss your specific challenges with the community. There is also a Forum for the Future CFO Programme. This is designed to help you with your biggest challenges towards securing your first CFO role. Within this Forum, we also post regular updates for our Future CFO Programme activities to ensure that our participants don’t miss anything exciting! We previously had various other Forums featuring The Situation Room, Women’s Finance Leaders and Startup/Scaleup Finance Leaders. However, we found it more effective to have one main community Forum and there is a tagging system to help you quickly navigate to the most appropriate discussions. Who should join the finance leader support Forums? Our finance leader support Forums are available to all free and Premium members. We recommend that everybody in the community joins the Forums as they will save you lots of time and help you get to a better answer. In fact, it is hard to think of a reason why you would not want to join in the Forums…! Where you can access the finance leader support Forums? Any GrowCFO community member can access our finance leader support Forums within the GrowCFO website. Simply log in and click on Forums within your left-hand menu bar. We also strongly recommend that you download your free GrowCFO mobile app by typing GrowCFO into your App Store. We have integrated GrowCFO’s entire platform into your App, which provides a fantastic user experience and is very popular! How to get started Your starting point is to click on your Finance Leader Community Forum and introduce yourself to the community. Tell them a few basic details about your job title, company, location and aspiration. You will be pleasantly surprised how friendly and welcoming people are! Next, scroll through the various discussions and benefit from the insights offered by other community members. Think about your biggest challenges and click on New discussion to seek advice from your peer group. Monitoring the Forum activity You will receive tailored notifications when other members reply to your discussions. This provides you with an opportunity to enter into conversations across a number of members within a particular topic. Don’t be surprised if other members also offer to support you in more detail through private messages or phone call – we are friendly and helpful bunch…! We recommend that you scan through the latest Forum activity every few days and show your willingness to help others by contributing to their conversations. It is surprisingly quick and easy to stay informed by using GrowCFO’s mobile App. Find out more about GrowCFO If you enjoyed this podcast you can subscribe to the GrowCFO Show with your favourite podcast app. The GrowCFO show is listed in the Apple podcast directory, Google podcasts and many others. Why not subscribe there today? That way you never miss an episode. GrowCFO is a great place to extend your professional network. You can join GrowCFO as a free member today and take part in our regular networking events and webinars.  Premium members also have access to our extensive training centre. Here you can enrol in our flagship Future CFO or Finance Leader programmes.  You can find out more and join today at growcfo.net

Kevin Appleby is joined by Ian Kaye, CFO and executive coach, to discuss how to present with confidence and how to improve confidence. What is your background and how did you learn to present with confidence?  Firstly, Ian trained as an accountant at one of the big 4 and worked in industry for 5 years. This led him to be based in Hamburg, returning after 2 years to do a full time MBA. Directly after his MBA, Ian moved to GE as a consultant. Ian’s roles have usually been business as usual finance roles and in smaller businesses as finance director or as leading quite large bits of change. He has also been largely interested in personal development elements. This included him expanding his interest of neuro linguistic programming during 2014-2017 by attending many courses and becoming a doubly qualified trainer. He explains how the benefits of this create a toolset for you to understand yourself and the environment and people around you. Also, you can understand drivers of how we show up in the world. This personal development in this area has lead to Ian being an expert at how to present with confidence. How can you get over the fear of presenting? While Ian admits he is not a therapist, he recognises that exposure therapy can be very effective at tackling any fear. Exposure therapy theorises that the more you expose yourself to your fear, the more you will be comfortable with it. This will mean your fear will become less intimidating. If it is part of your monthly set up to give a presentation, you will be getting practice. It may not improve after the first 2 or 3 times, but Ian says, progressively this will reduce the fear of presenting. What do you think gives people the fear of presenting? This fear can come from many places. Ian gives an example of someone being made fun of when they made a presentation at school. This will make them associate standing up and speaking in public with an unpleasant feeling. There is somewhere in the unconscious dialogue that tells you you are not interesting or good enough. This roots from the incident at school. While you may not remember why you have those feelings, you still feel them. Ian says a big part of moving forward is understanding where the fear came from. This will enable you to reframe what meaning you have associated with presenting. You also have to pay attention to the skill side. This will include what formats you use for presenting, how do you build your confidence to hold your presenter status and how do you engage the audience. One side of being able to present with confidence is the skill you have. The other side is feeling comfortable trying to present or removing the fear. What should you start doing to build confidence?  There are many approaches. Ian suggests listening to your internal dialogue. You have to see what phrases you are saying to yourself when you are presenting. You should then be going down a timeline and identifying the root and where this started. This is when you try to question, challenge and reframe what it is. This will give you the resources to feel better about presenting. This will further lead to the ability to present with confidence. There will not be an immediate, huge difference but you can increase confidence quite quickly after a few coaching sessions. It would also be useful to work on different presentation formats. Ian also reiterates how important practice and knowing your subject is. This can lead you to being able to present confidently. He also suggests thinking about what is the worst that could happen. For example, if you are worried about being asked a question you don’t know the answer to. Ian explains how very rarely does anyone expect every person to have every answer at their fingertips. What do you do when you make a mistake? It is human to make mistakes. You should be assertive to correcting your mistake. Ian does, however, recognise that it does take another level of comfort to be ok with making mistakes. To get this level of comfort you have to present with confidence. This comes back to understanding where your internal dialogue has come from. Then further analysing how relevant it is today and reframing it. Your comfortability can also be helped by putting the presentation in a format you are comfortable with. This format also has to be natural for the audience and take them on a journey. You want this journey to end at the follow up action point being addressed of what you want them to do after the presentation. The 3 points of a presentation Kevin and Ian agree a good way to set a presentation into 3 points. These points should be similar to: what do we want them to know how do we want them to feel what do we want them to do These points mean you only have to remember a few key words. These will be prompts to you remembering what you wanted to say for that point. It is thought that people only remember 3 things from the presentation so you have to make sure these are your key points. In presentations, you want to share and provide solutions but it is sometimes too much. Less is more and it is usually better to keep your presentations clear and concise. This will avoid the people you are presenting to becoming bored. Find out more about GrowCFO If you enjoyed this podcast you can subscribe to the GrowCFO Show with your favourite podcast app. The GrowCFO show is listed in the Apple podcast directory, Google podcasts and many others. Why not subscribe there today? That way you never miss an episode. GrowCFO is a great place to extend your professional network. You can join GrowCFO as a free member today and take part in our regular networking events and webinars.  Premium members also have access to our extensive training centre. Here you can enrol in our flagship Future CFO or Finance Leader programmes.  You can find out more and join today at growcfo.net

Kevin Appleby is joined by Andrew Tapson, experienced portfolio CFO, to talk about becoming a CFO to fast growth startups. How did you start being a CFO for various companies? As a teenager Andrew was surrounded by peers who were massively influenced by others and the group above. This is shown as 5 went on to be engineers and 5 to accountants! He at first wanted to be an accountant but then realised he wanted to get into business as he saw it as the place to be. Andrew went to the big six (as it was then) for interviews. This lead to six offers. He decided to go with Arthur Andersen. This was because the people were interesting and they paid a bit more. The Big Bang then took place in London which led to Andrew working for a subsidiary of Bank of America. This set the tone for the next 30 years. It was all about finding a problem, finding a pragmatic solution and then executing it. Andrew then became a finance director in Paris and then moved on to work for AT&T Capital. He continued to move to various places including Dutch bank ING. He then ended up as a CFO in 2011 and went on to be CEO. How do you pick up the skills you don’t learn in exams?  You don’t go on courses in how to shut down companies. Andrew says it comes back to heads-up management. It doesn’t matter where you are in an organisation, walk around with your head up, talk to people and be intensely curious. Andrew is not keen on job titles. It didn’t matter what his job title was, he just did what needed to be done. He used to call his job title the minister without portfolio. Changing the description of a finance director to CFO puts it on the same level as CTO, CMO etc. This will mean you are looking across the business helping other people and your team as you are in it together. Andrew saw in larger organisations that the CFO became the focal point as much as the CEO. Despite them having different skill sets, Andrew prefers when the CFO and CEO are walking side by side. This means if the CEO is seeing an issue, they have their trust lieutenant next to them. This will get them that different perspective and get better results. There needs to be a partnership there. Why are you called to fast scale startups?  Start up businesses sometimes have a 5 people with all C titles. Andrew aims to make them all a team. At ING there was a scaled down board with four people together who trusted each other. Andrew describes a venn diagram where connections between people are in the middle. At this board in there were a lot of connections and complimentary skills. Usually Andrew is found by fast scale startups when their Venn diagram isn’t working, or there’s a three-legged stool with one leg. Without balance there is bound to be mayhem. Andrew knows he is someone who understands team and partnership and has done a lot. He also knows how dangerous he is with all this knowledge but he is also good at knowing when to call another expert in. He emphasises that you need to know what you are not expert in so you can talk to someone who is more expert. What are the differences of being a CFO at corporate and portfolio level? Kevin and Andrew agree on a general rule that a CFO needs to have 3 things that they know about everything and also someone who knows the detail. CFO-ing in corporate land compared to portfolio CFO-ing is having that network behind you. In corporate life, Andrew didn’t really have that. Now his network is a lot more. This means he has people he would call on because they know something more in depth than he does. Within this network there is a strong degree of mutuality. This level of trust comes from shared values. The key value with this is the trust. You hear about people going to help a founder and then stealing their idea. That is not what it is about for Andrew. It is more about helping younger people on their journey step by step. Andrew’s role here is to show them the way, add to their skill set and value set. Do you come across many similar problems faced by fast growth startups?  When you go in as an experience CFO, you’ve seen before the problems the CEO is facing and this can bring stability. Andrew will bring them assurance they are on the right path and can tell them they are going through similar problems to other people in their sector. It does not matter what the product or sector is, the problems are similar. It is about the mindset. Andrew sees things in a particular was to help them. There is not a standard financial model. For each business it will be similar but different. Adaptation is key. You don’t have to invent the whole wheel every time, but a part of it. Andrew says that if you take a generic framework and put it through a twist it’ll work every time. What did you decide to do next? Andrew had a big corporate job come to an end and had one of those seminal moments where he thought whether he should stay or do something different. He decided to do something different and moved from London to South Devon. He wanted to go back into work and he found there was nothing very corporate there, but there were a lot of small businesses. Andrew spoke to someone who was a portfolio CFO and decided to do the same. He started by going networking and going to events, finding small businesses and it has worked. The transition to fast growth startups came during the pandemic. With zoom this lead to Andrew having clients in London, Cornwall, Bristol etc. He realised his mindset as well as his skill set was absolutely transferable from closing down £3 billion companies to starting up less than £1 million companies. What is one skill you think is important in being successful? All the businesses Andrew has ever worked with are not run by robots, but people. It is about finding time to teach yourself one skill you can put on the table. The best one, Andrew says is being a really good listener. Most good leaders are good listeners. Andrew advises people at early stage to become good at listening. It turns so many things into a different perspective. You can see things differently when you really listen. When Andrew was walking on the floor at ING he let people talk. He would ask how they’re doing and what’s bugging them. It is too easy as a leader to be in broadcast mode. Find out more about GrowCFO If you enjoyed this podcast you can subscribe to the GrowCFO Show with your favourite podcast app. The GrowCFO show is listed in the Apple podcast directory, Google podcasts and many others. Why not subscribe there today? That way you never miss an episode. GrowCFO is a great place to extend your professional network. You can join GrowCFO as a free member today and take part in our regular networking events and webinars.  Premium members also have access to our extensive training centre. Here you can enrol in our flagship Future CFO or Finance Leader programmes.  You can find out more and join today at growcfo.net

Kevin Appleby is joined by Paul Marchant to discuss his fast track to CFO at the Rail Safety & Standards Board. Where did the fast track to CFO start? Paul qualified at a small firm in Birmingham and then proceeded to move into politics for a few years. The political world gave him certain skills that are still useful in his current role. He then transferred back to finance 7 years ago. Paul’s role when moving back into finance was an management accountant role at the RSSB. Management accounting, Paul says, is a good step in. This is because you are dealing with decision making for the rest of the business and providing information for decisions that need to be made. It’s an opportunity to not only give data but also show you can provide insight and thinking. How much of a politician does a CFO need to be?  Paul says a CFO massively needs to be a politician. Similarly to politics, as a CFO you have to deal with different stakeholders and you need to evangelise your position. The biggest similarity Paul identifies, is the messaging. You need to take complicated concepts and communicate them in a way that people can understand and get on board with. As CFO you know all the numbers but you need to put them into key messages that are compelling. One of Paul’s first tasks he was given after he made his fast track to CFO was to reform the pension scheme. Translating the complexities of a pension scheme to people on the ground is difficult. 2 or 3 clear messages would be most helpful. Within your communication you also have to be empathetic and understanding of the fact you are dealing with people’s lives. What happened from day one that got you that fast track to CFO?  When you join a new role it will take 6/12/18 months to get your head around the new business and how it operates. Paul explains that he was possibly put on a talent list. 18 months into his role at RSSB, Paul was asked to become a senior management accountant. This was with a view for him to take on the role of head of finance 8 months later. This is when Paul really felt imposter syndrome. RSSB brought in an interim head of finance with a view of developing Paul into this role. When you reached the head of finance role did you experience imposter syndrome? For Paul, he experienced imposter syndrome when moving from management accountant to senior management accountant. This was due to him not having managed line before and suddenly he was in charge of his peers. Your peers can struggle to see you in a new role and this can make you question yourself. When Paul reached the stage of head of finance on his fast track to CFO he saw the big task that was in front of him. This means he didn’t have enough time to think about imposter syndrome. The best way, Paul says, to overcome imposter syndrome is to chuck yourself in and expose yourself to everything. To mitigate it, the urgency around the need for action Paul faced meant he would have to sink or swim. How did you take onboard skills on how to manage a team?  This is the first challenge you face that you did not pass exams in. Managing people is vital to having a successful team. The people side of things was Paul’s biggest driver of imposter syndrome. Paul had a decent mentoring platform. These were mentors in and out of the business who he could discuss strategy with as he makes more difficult decisions. Paul mentions this being the first time he felt lonely in a role as you have previously been on the same level as others. He also mentions reading around as being very helpful for him. These books can help you understand different characters and how to manage them. Lastly, Paul’s previous experience in politics means he can spot an agenda being formed early on. You’re exposed to certain political environments where spotting warning signals early is very important. The move from head of finance to the board in your fast track to CFO Paul had his first board meeting as a young head of finance. He had to tell 13 board members the financial message of the business. Previous to the board meeting, he did not know the members of the board. This left him at a disadvantage as he did not know what angles they would be coming at the meeting from. Warming up the board is important. It is useful to have certain board members understand your position before you go into the room so it’s not a cold delivery. As your confidence begins to build and you begin to the know the board members more in depth, board meetings start being easier. When Paul first went to the board he went as head of finance. This made him feel almost a bottom amongst equals. There was no CFO position at the business previously. He had to prove he had what it takes to be the CFO. This gave Paul experience and shaped what the CFO role needed to look like going forward. What was your relationship with the CEO like? The CEO and Paul had a very strong relationship. There is luck involved with who your leader is and how they look after you. Paul’s CEO was excellent and made him realise he could do it so gave him that confidence. He also didn’t cover him too much so he still had a voice. The impact a good leader, like Paul’s CEO, can make shows how important the mentoring side of the business is. Paul and his CEO joined their roles at the same time. They both had something to prove and both had a reputation to build. The nature of the issues they had to solve meant they were both bound by the same pains and give each other resilience. This laid the foundations of Paul working very closely with him over the next years. As you put together a business team, you need a shared set of values. This was shared between Paul and his CEO. Their similar aims also made them work closer. You need to share with the board where you want to take the business. It is also vital to do work outside the board room to really understand each board member. You need to know what each board member strives for so you can see if they share similar values. Some board members had early disagreements with Paul on strategy. However, you can overcome this by building trust and a value base with the board over years. For most of the time all of the board were rowing in the same boat. What are 3 bits of advice you would give yourself looking back to the start of your fast track to CFO? Paul says he 3 key bits of advice he would give to himself at the start of his journey would be: Don’t panic or question yourself so much. You are going to make mistakes and that’s inevitable. Set out your strategy pretty early. It will build your credibility and will show you who will not be on board with your ideas. Make sure you are a counterbalance to other people in your senior management team or board. You want to offer something different (a USP). Don’t only look at this years finances, look years ahead as not every CFO does this. Find out more about GrowCFO If you enjoyed this podcast you can subscribe to the GrowCFO Show with your favourite podcast app. The GrowCFO show is listed in the Apple podcast directory, Google podcasts and many others. Why not subscribe there today? That way you never miss an episode. GrowCFO is a great place to extend your professional network. You can join GrowCFO as a free member today and take part in our regular networking events and webinars.  Premium members also have access to our extensive training centre. Here you can enrol in our flagship Future CFO or Finance Leader programmes.  You can find out more and join today at growcfo.net

Kevin Appleby is joined by consultant, David Tuck, to explore how to set a transfer price. He also looks at transfer pricing advice and how effective it is. There has been a shift in transfer pricing David tells you there is a mystique of complexity around transfer pricing. It does not need to be that way if you have modest international aspirations. Is transfer pricing all about tax? Or public image of company? David explains how there has been a real shift. Proactive tax planning to aggressively reduce tax liability is less prevalent now. The BEPS rules play a big role in this. There has been a successful campaign in the media to show that it is part of you corporate social responsibility to pay the right amount of tax. Make sure you get it right and don’t fall foul of rules and regulations and potential complexity out there.  Transfer pricing is much more about accidental consequence mitigation now. Making sure you don’t make mistakes or interpret the rules wrong. It is also no longer adversarial; “how can we beat the tax authority?”. The public outcry over Google, Amazon, Starbucks etc has been a part of this change. It’s about navigating the rules. Expanding internationally because it’s in our commercial interest to do so, not to save tax. As David says, the tax tail no longer wags the business dog! Accidental consequence mitigation With transfer pricing, often start up finance leaders have heard it and they google it. They think they don’t need to do anything as there’s a UK SME exemption. This means from a UK perspective, there are no worries. They don’t, however, realise that if you have international operation the same exemptions may not apply. There is no exemption in the USA for instance. As a result, that startup could be exposed when it comes to transfer pricing. This means you could build up costs and losses which exposes the startup to inquiries in the USA by the IRS. This bites when you’re going through funding round or an exit. There can an be serious consequences. Operating in other countries may mean you need to see if you need a transfer policy. A US operation may expose start up to 6 years of going back in terms of enquiry instead of 3. The IRS can enquire into you when you are going through an exit. Any opportunity for a price shave will be looked for and they will see transfer price risk exposure. It can drop the value by 10%. What transfer pricing help do SME’s need? The way David comes at is that there is a false dichotomy at present when it comes to transfer pricing. Either you do nothing or ,what a lot of finance leaders do, cobble a policy together themselves. Alternatively, they go to a professional services firm. There’s a middle ground here. The principle of reasonableness underlies the transfer pricing rules. David believes there is a gap for an OECD-aligned solution. If you’re a startup the most important thing is to have a sensible transfer pricing policy, sensible mark-up, some documentation that looks the part, then some legal agreements to back-up this is a genuine commercial relationship. David sees a gap for an OECD-aligned solution that could get you 95% of the way there. It is ballpark accurate, and it’s more than reasonable. That’s what finance leaders in startups want, to have done something sensible without paying eye-watering sums for finance pricing advice. Further down the line, you might go and pay for some specialist transfer pricing advice on top of that general policy to give you additional peace of mind. You don’t want to do this at an early stage, especially when your business operations are still fluid.  Transfer pricing is not overly complicated There is nuance to transfer pricing. There are five transfer pricing methodologies. The three first considered are transactional indicators. You look at that sale of that good or service and requires knowledge of a business’s gross margin that you will realistically not ever be able to publicly find. So, in less than 5% of cases can you use these methodologies. Then you come to profit-based methods. In 95%+ of cases they use this same method of transactional net margin. David believes to get the ballpark there and land on the right methodology, what is a reasonable margin or markup, some documentation to support that, and some legal agreements can all be delivered for a dramatically lower price than is usual today.  Kevin wonders if there are any advantages in moving money in particular countries? David wouldn’t push an agenda of proactive tax management as direction of travel is against your ability to do that. Public opinion is also against this. Putting the ethics to one side, from a pragmatic perspective of the brand and how this would affect it, David says he would not invest energy into this area. He indicates to focusing on paying the right amount of tax and that you are not paying too much but strongly suggests against having tax as the driver of business decisions. You might save money short term but any money you save from tax is outweighed by cost of professional advice and dealing with enquiries. The net beneficiary is the professional service firms offering specialist tax planning advice. Now it’s about paying right tax in a complex world, rather than trying to game the tax rates and see it as a target to reduce. There is so much scope to help startups and scaleups within their limited budgets. Big challenges for CFOs when expanding David explains how it is really tough situation to be in. Often you’re the de facto managing director of international operations before you have a country general manager. You may not be aware of the rules and regulations you need to be following. David shows you why it is better to use local advisers brought up on local rules and regulations. But how do you find the right advisers? Is this permanent? Branch or subsidiary? When you don’t know it, it’s splitting the atom in terms of complexity. David is going to be addressing these issues as well as transfer pricing. It is a real opportunity to serve finance leaders of growing businesses, who are going international, much better than they’re being served today. He wants to make that process so much more straightforward in terms of all the pain points. He wants the demystifying of expert knowledge.  3 key advice points for CFOs who are looking to expand internationally Be ahead of where you are creating the IP in your business. You can’t be too early on this! Make sure you know what your situation is on transfer pricing, know what your exposure is.  Connect with David on LinkedIn – always happy to take the time to chat and share my perspectives. David’s LinkedIn profile is: linkedin.com/in/tuckdavid . Find out more about GrowCFO If you enjoyed this podcast you can subscribe to the GrowCFO Show with your favourite podcast app. The GrowCFO show is listed in the Apple podcast directory, Google podcasts and many others. Why not subscribe there today? That way you never miss an episode. GrowCFO is a great place to extend your professional network. You can join GrowCFO as a free member today and take part in our regular networking events and webinars.  Premium members also have access to our extensive training centre. Here you can enrol in our flagship Future CFO or Finance Leader programmes.  You can find out more and join today at growcfo.net

Kevin Appleby is joined d GrowCFO mentor, Susana Serrano-Davey, to discuss how to give feedback properly. How do you start preparing a manager to give feedback properly? Susana explains to you that feedback is a craft that we acquire over time and experience. You will go through a learning curve to reach the point of giving feedback properly. To prepare a manager for giving appropriate feedback some companies have training in place, however, Susana says that this is a good step but can’t be the only one you take. If you are a new manager or an experienced manager who’s feedback isn’t landing with their team, Susana tells you to find someone who can be a feedback mentor for you. You should find someone who gives or handles feedback correctly and then share your challenges with them. How do you give feedback properly in a difficult conversation? You should react quickly if you see there being an issue with someone’s performance. It will give the person the heads up and a chance to develop before the conversation becomes more difficult. The choice of language you use is critical when giving feedback. Susana suggests using more neutral words and also to not personalise the feedback. This will help you give the feedback properly and make it less aggressive. Preparation for the feedback you are going to give is important. You need to think beforehand about what points you are going to make as you are more likely to handle the situation in a balanced way. The environment where you give your feedback can also impact the way it is received. Susana describes to us how she gives feedback to her team in a more informal setting so it can be more of a conversation and less aggressive. How can the culture of the organisation impact feedback? Some organisations can be very hierarchical. There are also some managers who think feedback is telling the person how they are doing with their tasks and what they need to do better. Others have a more holistic approach. This is where they will focus, not just on the job at hand, but also personal development. They will look more at the person rather than the role. Elsewhere we can see a culture where it’s scary to ask your boss to help you achieve the improvements they have set you. In feedback, you need to not only tell the person what they need to improve on but also what they need to do to achieve it. How should you receive feedback? When receiving feedback you should put all your shortfalls on the table. This will lead you to asking for specific help on these tasks. Managers can provide you with guidance, support and even possibly finding additional resources. If someone gives you feedback in a broad way, ask for the specifics of what you are being told. This means you can be more focused on the things that really need additional attention. Susana also expands on being willing to listen when receiving feedback. Take note of what they are telling you. Also, take time to digest what you’re being told so you don’t automatically go into defense mode. Lastly, you always should accept the feedback. Even if it is harsh you have to look for the gem in the feedback that you need to improve from, and possibly previously didn’t see. 360 degree feedback Susana likes this feedback and shows you how it can give you a more balanced view. The more directions you look into the more balanced your view will be. Listening to one opinion will leave you with a biased view on what to improve on. Even people far away from you in your role can give you insightful feedback. Some can find it hard to give their boss development points. However, it is very good practise at giving feedback properly, in a way that doesn’t create discomfort. All feedback is important including your clients. These can be anyone you have delivered a product to or interacted with. The people you interact with will vary so this means your feedback approach has to also. You can’t put a straight jacket on feedback and it doesn’t always need to be done the way people say it does. Susana tells you to make your feedback method appropriate to who you are giving it to and where you are at. Collective feedback Receiving and discussing feedback as a group is great team building but is also an effective team management activity. However, Susana says it does not replace 1-to-1 feedback. Individual feedback can be more intimate. It gives the manager a chance to demonstrate care for the team member if they come prepared for giving the feedback. They can give you specifics on how you could improve but will give them a chance, also, to see how you are feeling and give them feedback. 3 tips on giving feedback Susana’s 3 tips when giving feedback are: Make sure it is balanced. Give positive and development points. Prepare Be sensitive with how you deliver it 3 tips on receiving feedback When receiving feedback, Susana’s 3 tips are: Listen Look for the gem, no matter how painful the feedback is Take the opportunity to ask for whatever it is you need to improve Find out more about GrowCFO If you enjoyed this podcast you can subscribe to the GrowCFO Show with your favourite podcast app. The GrowCFO show is listed in the Apple podcast directory, Google podcasts and many others. Why not subscribe there today? That way you never miss an episode. GrowCFO is a great place to extend your professional network. You can join GrowCFO as a free member today and take part in our regular networking events and webinars.  Premium members also have access to our extensive training centre. Here you can enrol in our flagship Future CFO or Finance Leader programmes.  You can find out more and join today at growcfo.net

Kevin Appleby is joined by Tony Shafar to discuss dealing with difficult conversations and how you can make them less difficult. Why do people avoid difficult conversations? Someone may not be forthcoming to have a difficult conversation with someone if they feel they will get a negative reaction from them. Tony explains that this is usually driven by them not having done the task the way they thought it should be done. Tony expands into how you can make someone more open to have these conversations. The main factor he talks about is if you want honesty you need to give it. The mindset you need to have for difficult conversations To make a difficult conversation more comfortable you need to be willing to understand from their perspective. Tony shows how this should include understanding what is stopping them from doing the task the way you want it done. When wanting people to be more open and vulnerable you need to reflect them yourself. Sharing with your team times you have previously struggled will show them it is normal. They will, therefore, feel more comfortable sharing their problems with you. Tony and Kevin agree that it is unrealistic to be good at everything. Showing this vulnerability will make people feel more open to giving suggestions and will invite a conversation to get other perspectives. Tony explains that you should have the mindset that you have an idea of how it should be done but have an open mind to other ways of doing it. The culture you create for difficult conversations You should have a culture that everyone feels comfortable giving their opinion and that they feel as though it is valid. Tony gave a few ways you can create this open culture. Utilise the junior members of your team. Hearing senior members talk about their ideas may leave junior members less sure in their ideas. To counteract this, letting the junior members talk first will let you hear their fresh ideas as they have less of an idea of what is right and wrong. In conversations there may be regular people who are always vocal. Possibly have discussions within discussions to give the less vocal people a chance. You could also highlight the counter-productive behaviour that the vocal people have with them. The finance leader’s difficult conversations Managing costs and budgets is a difficult conversation finance professionals need to have. However, Tony shows us how these can be made harder when you have to have a difficult conversation repeated and are still not seeing any action. Tony then helps you by giving ways of making these conversations less difficult. One is allowing them to be part of the solution. Instead of telling them what the solution is going to be, go to them with the problem and ask for their solution to add a new perspective. It would also make them feel more involved in what the final decisions will be. The difficult conversation of change People will usually look at change by seeing what they will get out of it. This is why, Tony says, you come to them with the question of which solution would work best for you while explaining the problems they need to overcome. This involvement makes change less forced and that they are partly responsible for the decision that was made. This makes them more likely to make it want to work. Find out more about GrowCFO If you enjoyed this podcast you can subscribe to the GrowCFO Show with your favourite podcast app. The GrowCFO show is listed in the Apple podcast directory, Google podcasts and many others. Why not subscribe there today? That way you never miss an episode. GrowCFO is a great place to extend your professional network. You can join GrowCFO as a free member today and take part in our regular networking events and webinars.  Premium members also have access to our extensive training centre. Here you can enrol in our flagship Future CFO or Finance Leader programmes.  You can find out more and join today at growcfo.net

Kevin Appleby is joined by David Appel from Sage Intacct to discuss reporting for a SaaS business. 5 Stages of SaaS business growth David Appel discusses with Kevin the 5 stages a SaaS business will go through, also what they need to accompany them: At this stage the simple goal is to create product market fit. The next stage is for you to prove you can sell your product and hire reps. Here, David explains, the focus needs to be on billing and cash flow. The metrics are around customer acquisition and sales efficiency. This is when you want to prove your net renewal model. This means you can hold and upsell the customers that you have. David indicates this is why more mature finance leaders are hired here. There needs to be a large focus on tracking performance obligations and contract obligations, tying every upsell back to them. As this continues, the finance function becomes more complicated. Make it predictable and scalable. This is when you will start to hire a more skilled finance team. This is the big outcome. It will be a strategic exit or IPO where the company will go global. Due to the higher stakes, there is a lot of additional pressure and scrutiny. With a SaaS business, recurring income makes meeting shareholder expectation easier. What’s the typical time-scale between more basic (receipts in shoe box) to thinking about the big outcome? David explores how SaaS businesses are getting faster and faster at this transition. However, investors always want it to go faster. For the top 10% who get there, it can be 6-7 years. Others can take 15, and up to 20 years. This can be down to the markets moving and customer sentiments changing. David suggests you have to be lucky to have everything fall your way. There is a lot of change as a lot of different things happen to finance. How often do folk scaling realise systems aren’t good enough? Classic process optimisation means you can break it down. There is such a cultural component to this. Is everyone clear on the simple mission of the company? And what role each has to achieve that? That’s critical to truly being able to scale.  Kevin adds importantly to what David says by pointing out: you have to think like a business of the size you want to reach. The systems you put in now will fit your company when you get where you want to be.  What metrics are key from CFO’s point of view? Each one is different at a different stage. David indicates towards using your resources around you like mentors and advisors as no one can do it all themselves. Someone will have been where you are and worked their way through it. David discusses 3 metrics: Velocity. This is the pace your going at. You could calculate it by using your revenue growth or your net dollar retention. There are many ways of calculating this but investors want transparency. Profitability. You need to look at what your customer acquisition cost is. An understanding of the lifetime value of a customer is vital. Capital efficiency. You want to know how much money you are bringing in against how much it is costing you. What is your net new ARR (Annual Recurring Revenue) divided by your net burn? What Sage does David works for the successful company Sage, majoring in the Intacct Product. He briefly tells us the benefits of using them which include: Helping you through the stages you will go through and helps you close. Not only do they help you close, it will be a quick close, possibly as quick as 5 days. Find out more about GrowCFO If you enjoyed this podcast you can subscribe to the GrowCFO Show with your favourite podcast app. The GrowCFO show is listed in the Apple podcast directory, Google podcasts and many others. Why not subscribe there today? That way you never miss an episode. GrowCFO is a great place to extend your professional network. You can join GrowCFO as a free member today and take part in our regular networking events and webinars.  Premium members also have access to our extensive training centre. Here you can enrol in our flagship Future CFO or Finance Leader programmes.  You can find out more and join today at growcfo.net