Secret CFO

Hi ?? I’m The Secret CFO.? I just crossed 10k followers on here, so it’s a good time to re-introduce myself. Here’s my story?? I’m a career corporate CFO (10 figure + revenue biz). I’ve been in the finance profession (starting in the Big 4) for over 2 decades. With almost half of that time as CFO, in big multinational businesses. Through a combination of luck and hard work I got up the ladder quickly. I had a few mentors along the way, but I mostly worked it out myself. The path to CFO felt a bit like a mystery. Even after I’d walked it. Being one of the lucky ones, I feel a responsibility to make it simpler and clearer for others to climb the ladder. In August 2022 I started sharing my thoughts on Twitter about how you might do that. I assumed no-one would read it. I was wrong. Very wrong. It blew up. I grew to over 100k followers in less than 12 months. My goal is to get real life insights to as many current and future CFOs as possible. And where better than LinkedIn? Most content written on the CFO role is sh*t. Based on textbook theory, written by people who have never done the job. Often by those with something to sell (Big 4, technology companies, etc). I promise to be different to that. I bring my decade of experience in the top finance job, and a willingness to share. Writing is a hobby for me, and this is my way of sharing it. I have specialized in complex situations; turnarounds, refinances, exits, M&A, transformations, etc. I’ve been lucky to work with super-entrepreneurs, outstanding public company CEOs, and experienced boards. Not to mention all of the accounting and finance pros I’ve worked with and for along the way. I enjoy documenting my ever changing views on what I’ve learnt. And by remaining anonymous, I can be more interesting and helpful to more people. You can expect content on: - simple summaries of finance concepts - insight into the CFO mindsight - skills leading large teams - broader business skills relevant for CFO - how to make great finance career decisions - hot takes on hot finance topics. - silly jokes and memes Make sure you follow my page, so you never miss a beat. Please say “hi” below and introduce yourself????

Wow ... a lot of people joined my email list after reading this yesterday. Welcome all, there's room for everyone! If you are one of those, introduce yourself in the comments below

“You don’t have to wait to be a CFO to behave like one.” Sounds small, but those words nearly 20 years ago changed my career forever… It transformed how I thought about what I needed to do to climb the ladder. The problem? How the hell is a CFO supposed to behave? Feet up on the desk and read the Wall St Journal, right? Right?? Not so much. I had to work it out for myself. So I started watching the leaders around me carefully, looking for little clues in what made them different. I started to keep notes: - How to identify talent - How to organize a finance team - Best way to present a budget - Managing cashflow - Handling banks - Board management - CEO/CFO relationship - M&A - Raising finance - Etc, etc I could list hundreds. If I heard a turn of phrase I liked, I would write it down.? Or a piece of body language. And then I started to put it into practice. I got it wrong at first. But the more reps I put in, the more?I nailed what worked for me and what didn't. I soon realized, that the valuable stuff, was actually pretty unconventional. The stuff that mattered - that forged great CFOs - wasn't obvious. And no-one was talking about it... Nearly 20 years later, and I have thousands of notes across dozens of journals. There is no price I would sell them for. As I became a CFO myself, I put it into practice. Ditching the stuff that didn’t work, and doubling down on what did. Always refining. What I have now is a playbook tested on many as CFO of businesses with $bn+ P&Ls. I just needed a way of documenting it. That’s where CFO Secrets comes in. Each week I document a part of my tried and tested CFO playbook in a ten minute read. It's now close to 150,000 words in total across all parts of the CFO patch. I’m more proud of it than anything else I’ve done in my career to date. And there is so much more to come ... You can read it all for free by joining my newsletter; CFO Secrets. Just sign up here —> https://www.cfosecrets.io/

Fascinating to follow this. Sounds like someone lost control of the accruals for delivery expenses and then tried to cover their tracks. But the questions go far beyond the one individual… Why did it take 3 years to find? Where are the review controls? This is accounting 101. The other important question here is why though? What is the motivation of the individual? Why would an accountant risk their career like that. Why do they care so much? When accountants willfully misreport (which is what is alleged here), there are normally 3 reasons: 1. Manipulating for bonuses. This is what people normally think is the reason, but rarely is the case. Too 2. They messed up and realized too late. Rather than fess up they cover their tracks and make it worse. 3. They don’t want to deliver the bad news to the business. Normally a product of a weak culture and poor attitude to control. In my experience the most common reason is 3…

Aborted M&A is expensive. But poorly executed M&A could be even more costly (your job). There is no book that will prepare you for 3 AM arguments with lawyers about the treatment of a specific part of the inventory reserve in the net working capital definition. The only way to get the experience is to be part of a live deal. And you WILL need the experience to be a great CFO. Whenever the chance arises, be part of M&A early in your career. In whatever capacity you can. You'll learn a ton being around it and there are lots of ways you can be useful in the heat of a deal.

I'd be lying if I said I wasn't a bit envious of Peloton's CFO...she's got a fun job. Over the past 4 weeks, I've used Peloton as a case study for interrogating financial statements. We've covered the good, the bad, and the ugly. Boy is there a lot of ugly. But the turnaround is well underway, and with a refinancing done + a new CEO, they finally have some breathing room. I've been through a turnaround with similar features before. At first it's like playing 3D chess under fire, but it's so satisfying as the road straightens up in front of you. Yesterday, in the final part of this series, I dug deep into the Peloton refinancing to see how they addressed $1.7bn of near term debt on a business that is 'mid-turnaround.' If you missed it you can find it here ---> https://lnkd.in/eQv_xC8Z

Peloton is has one of the most unusual loan covenants I've seen. A minimum liquidity covenant tested WEEKLY. This week we dive into the recent Peloton refinancing (May of this year). Just how would they deal with those convertible notes? And what drove the timing of the refi. All will be revealed in this week's edition of CFO Secrets (Part iv of our series on interrogating financial statements) Sign up here to make sure you don't miss a thing --> https://www.cfosecrets.io/

I see you, fellow CFOs…

Time to take an audience Q&A... AW from NYC asked: "I'm currently the Director of FP&A for a $250M independent subsidiary of a publicly held company. Our Controller is leaving in a few weeks, and I've been asked to step in as interim Controller to bridge the gap until a replacement is identified. I don't personally find the Controller role particularly exciting from a subject matter perspective but understand how critical the position is and view this as a unique opportunity to fill out some more horizontal experience on my T-shaped skill graph. Any tips for someone with little technical accounting experience to excel, provide value, and gain the most from being in this unique position as I work towards a long-term goal of CFO?" Here's my answer ... do you have any advice for AW?

"Turnarounds are a young man's game." - Former Peloton CEO Barry McCarthy They certainly take an energy, and relentlessness that is hard to sustain - whatever your age. I built my career as a turnaround CFO. It is not for the faint of heart. Think long and hard about diving into a turnaround. They are always more difficult than you expect. And I mean MUCH more difficult. If you want to read more about what it takes to turnaround a business check this out --> https://lnkd.in/eep8kdzB