Steve Abely, CFO of Abound Solar, a privately held solar-module manufacturer, is the very model of a strategic CFO. Is he about to pay a price for his recent success?
Abound Solar secured a $400 million loan guarantee from the U.S. Department of Energy last December and raised $110 million in equity to expand a Colorado manufacturing facility and build a plant in Indiana that is expected to create 1,200 jobs. Securing the government loan alone was an arduous process, in which Abely submitted a 600-page application, followed by several rounds of financial analysis and sign-off on a 40-page term sheet. A name-drop by President Obama, who publicly touted the loan as part of the government's stimulus program, didn't hurt either.
But even as Abely devoted most of his time to those complex fund-raising efforts (a seemingly affordable luxury, since the company's finances and operations have thus far been fairly simple), "there were still times when there were too many things to do and not enough hands on deck," Abely says. Having spent two years securing the funding, he now must face the fact that running the finance department "will get more complicated, and I will need to expand staff as we grow the business."
By their nature, major strategic changes — such as physical expansion, initial public offerings, or acquisitions — divert finance chiefs from their routine responsibilities. These projects are critical in the long run, but in the short term they take up a lot of space on the CFO's calendar — space that is already at a premium. "An acquisition is the glamorous, sexy thing on your plate demanding your time, but the basic work of the company still has to continue," says Paul Burmeister, a partner at executive-services firm Tatum.
That puts CFOs in a very tough spot: they are frequently responsible for ensuring that the major milestones of strategic projects are met, but they must also make certain that day-to-day finances run smoothly. It's little wonder they feel torn between the finance department's immediate requirements and the demands of initiatives that won't be finished for months or even years. "You have to force yourself to be very disciplined and effective in how you divide your time between tasks," Burmeister says.
Multitasking Madness
Even with the best of intentions, it can be hard to keep the finance department moving forward at top speed on multiple initiatives. FleetCor Technologies finance chief Eric Dey learned that the hard way.
Last April, Dey filed his company's first S-1 in preparation for an initial public offering. Soon after, the payment-card provider tabled those plans as it waited for the market to improve. Six amended S-1s later, the IPO was finally completed in December 2010, at $23 per share.
A process that Dey initially thought would last only four months took twice as long. The starting and stopping of the IPO also diverted resources from other initiatives designed to grow the company, like searches for potential acquisition targets and partnerships, which went slower than Dey would have liked. "We got sidetracked from a business-development perspective," he acknowledges.
Check In, Check Off
There are several tactics that can help keep both special projects and routine finance tasks on track simultaneously. Above all, the CFO should set the tone for finance employees who are plugging away on both kinds of work, letting them know that all of their contributions are valued and important. "I'm not directing them on a day-to-day basis, but they need to know I care deeply about the project," says Samuel Strickland, CFO of Booz Allen Hamilton. Strickland oversaw the spin-off of the consultancy's government business three years ago and managed its IPO, which was completed in November.
Abely of Abound Solar says various to-do lists keep his attention focused on his immediate tasks and prevent him from becoming overwhelmed by larger, looming goals. He consults a personal checklist nearly every day, and he keeps regular tabs on quarterly and annual plans for the company as well. Abely also has weekly status meetings with three key finance employees, including the controller. "You've got to set expectations for when things can get done and find out the critical items on the path to getting something completed," he says.
Regular check-ins can serve both as morale boosters and as a form of peer pressure for employees working on a daunting project. In the case of Booz Allen's IPO, the 23 key people involved in the project met twice a week and later twice a month. "Nobody wanted to go into the meetings not having accomplished what they said they were going to accomplish," says Strickland.
One caveat: finance chiefs should think carefully before planning too many meetings. Status sessions can be helpful, to be sure, but they also take up valuable time that could be spent tackling important tasks. "People have a horrible habit of having meetings to have meetings," says Leigh Stevens, senior product architect at consulting and training firm Franklin Covey. For effective group updates, Stevens suggests meeting at a regular, consistent time, and that each agenda item be assigned a limited discussion time.
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