In today's volatile market, a financier's actions should be guided not by theoretical knowledge but, above all, by common sense.
This was the message of Yuriy Syvytsky, a board member of the IT consortium Intecracy Group, at the International Management Institute (MIM-Kyiv) during the conference "The Impact of Business Education on a Manager's Career Growth" on 29 March 2012. MIM-Kyiv invited Yuriy Syvytsky to the meeting with financiers as an expert and business owner so that he could share the practical aspects of a CFO's work in a large company.
"We live in an era of change, when no one can boast of accurate forecasts and there is no certainty at all — we can only fantasize about what will happen in a year or five years. Accordingly, there is no practical sense in delving into a huge number of calculations, as financiers often do," says Yuriy Syvytsky. "It is much more important to monitor the current situation and constantly adjust the company's course. Moreover, financiers can put forward initiatives to restructure the business in a way that removes the factor of uncertainty from its development."
As an example, Yuriy Syvytsky cited the experience of a large Western corporation where the CFO proposed taking all of its shares off the market for 5 years. Whether this decision is right is not yet known. But the corporation's competitors have started using the same strategy.
At the same time, key decisions in a company should be made collectively, not by the financier at his own discretion. For example, if a business is at the startup stage and the financier starts interfering with spending, he will ruin it. Still, in any case, the CFO must understand which indicators he has at his disposal.
"For me, a CFO is a person who has a feel for the organization and makes proposals, but does not try to take over anyone else's functions. If he starts telling the company what to do at his own discretion, he will ruin it. It is like a surgeon. A surgeon must know exactly where to cut, but every action must be guided by common sense. If a surgeon starts cutting without tests, and that often happens, problems begin. Every decision by the financier should be made collectively. Because the financier does not know the receipts plan or the sales plan, he cannot make decisions on his own. An organization rests on a group of people who talk to each other, and one of them is the financier," Yuriy Syvytsky believes. "There must always be common sense in everything. No unnecessary figures. Everything should be simple. Red zones, risk zones, backup mechanisms. You always have to give the numbers to the decision-maker on time. Several times we lost a lot of money simply because the financier did not provide information on time, and was instead absorbed in some other calculations that we did not actually need."
Yuriy Syvytsky also dwelt on the personal qualities of a CFO. According to him, what is valued in a financier is accuracy, punctuality, the ability to listen to others and the ability to work with risks: "This is a very highly educated person, with a broad outlook and a completely open mind."
However, one of the key issues is how the finance function is organized and how it interacts with the company's departments. Yuriy Syvytsky believes everything should be as simple as possible. "There is no need to stuff anyone with reports. We should have many scenarios, many 'what ifs.' But it is very important to listen to people's opinions and respond to them quickly. We plan for 5 years, but that is more of a fantasy. In reality, there is annual, quarterly and monthly planning. We need to understand these issues," says Syvytsky.
According to him, the CFO must understand the indicators. The business development strategy is then adjusted on the basis of this information, but it is the owners who define it. The financier, for his part, must say exactly what resources are available and assess the company against the given criteria. Assessment, adjustment and organization are his main tasks. Yuriy Syvytsky particularly stressed that the psychology of relationships matters more than staffing tables and formulas: "The higher your level of understanding of the business, the more important psychology becomes."
About Yuriy Syvytsky
Yuriy Syvytsky is a board member of the IT consortium Intecracy Group. An engineer by training, he received an MBA (Master of Business Administration) from MIM-Kyiv in 1994. He has been in business since 1991. He is one of the founders of Softline-IT, one of the largest IT operators in Ukraine, and of the international consortium Intecracy Group, which comprises 6 IT companies in Ukraine, 2 in the USA and 3 in Kazakhstan, Azerbaijan and Georgia.