Intro:
How should businesses properly utilize a CFO?
Today’s guest is Ronit Maor, the Chief Financial Officer at the insurance and banking software provider Earnix. With nearly two decades of CFO experience, she is the perfect person to talk to about the intricacies of the CFO position, and how it has changed over the years.
On this episode of Future of Tech, Ronit explains how in successful businesses, the role of the CFO stretches far beyond mere budget management and into other essential strategic aspects within the company.
She also gives new CEOs some valuable advice about hiring a CFO and building a strong partnership with that person. Enjoy this episode.
Main Takeaways:
- It’s Not All Numbers: Ronit suggests that new CEOs not consider their Chief Financial Officer to be just a “glorified controller.” She insists that a CFO needs to be deeply involved in decision-making processes at a company rather than someone who only handles a budget.
- Women in Leadership: In an effort to work toward greater representation for women in leadership roles, Ronit is a mentor at Woman2Woman, an Israeli organization that helps young aspiring women professionals reach their goals. Ronit suggests that more equitable representation will be positive for businesses.
- How SaaS Has Changed the CFO Position: Ronit offers a CFO’s perspective on how working at a company that provides SaaS compares to the more traditional enterprise software-driven businesses or even hardware companies. She claims that because SaaS requires companies to have ARR (Annual Recurring Revenue), CFOs have to consider their customers differently: “The sale never ends. You have to, all the time, know your customer, take care of it, [and] learn what the customer needs are. It’s a different way of work compared to… the old way that you’ve sold it once and that’s it.”
Key Quotes:
[12:09] “Business is not very different in different companies, even if the technology is very different. So, one of the advantages CFO do have is the ability to move between industries and different types of markets even if the technologies are completely different, when the technology people have less flexibility than us.”
[23:44] “So the more formal things that I’m doing is I'm a mentor in a organization called Woman2Woman, which is an organization established by people that got out of [the] 8200 army unit. And it's a mentoring for women… I think we have a group of like 50 mentors — senior people in the industries actually. It's not only one industry… You’ll find they’re senior women from all around the country. The organization is choosing each year 50 mentees — young women that want to get into this program [and] that want to become leaders in the industry.”
[28:58] “If I need to choose one thing that will increase chances for success — nothing can guarantee success, of course — is having the right people… hiring people that are smarter and more knowledgeable in their specific professions. It's not always easy, but this is what people… what CEOs need to do.”
[35:26] “We mentioned ARR, which is the recurring revenues, which is the core thing that you have in SaaS. The fact that you have recurring revenues changes a lot the way you go after the markets, the customers, and you maintain them afterwards. The whole concept is that it's not a one time thing [where] you got the customer once and that's it, you're done. You have to maintain them.”
[44:13] “The difference between public and private for a CFO… putting aside the pressure of being a CFO of a public company… but from the business side, when the company's public, the balance in the view and the decision-making between the short term and the long term is different from when you are a private company. When you are a private company, you can afford yourself… making… the right decision for the longer term, with less considerations of how the quarter will end. While when you are a public company you, as much as you will say that you are doing everything you can for the long term of the company, at the end of the day, you have the conference call with the investors and you report how the quarter ended, and the stock goes up or down, and your employees see [that] the stock goes up or down, and… it's very hard to ignore it. So you have to take into consideration also the short term considerations, which are not always the right balance for the business.”
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