The operations mandate: Chris Lafond, CFO of Intralinks

• A look at the financial and operational leadership at Intralinks.

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Hello, this is Rich Antonek, CFO of Veritex Legal Solutions, and you're listening to the CFO Thought Leader Podcast.

This is Episode 203.

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In this episode, Chris Lafon joins us once again.

Now, Chris participated in the podcast last fall.

We asked him to take a deeper dive with us on a webinar recently, and we've repackaged that for you, our podcast listening audience.

Chris is the former CFO of Gartner, the large IT research firm that many of us might know.

to operations and finance.

So we invited them back.

You'll hear that interview right after this, these words from ours.

decision-making.

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We're speaking to CFO Chris LaFont about the operations mandate that exists for finance executives today.

They want to move ahead in their field.

They need to get that operational experience.

Chris, what are the, let's say, the internal and external forces that are driving this?

That's a good question.

I mean, I think there's a couple of things.

I mean, I certainly think that there's an external force around corporate governance.

, I think that boards are certainly looking for both CEOs and CFOs to be very close to the business, right?

No board wants the CFO to come in and simply report numbers.

You know, those days are, I think, pretty long gone.

And I think if you look at corporate governance today, you see much fewer chairman and CEO combined roles.

You see fewer COOs in companies.

And I think that's because from an external force point of view, boards are expecting, the CEO and the CFO both to be very knowledgeable on the business.

So I think externally that's one factor.

I think internally, I would say that every CEO is looking today for a partner that can provide both the financial perspective and an operational perspective.

I think when you look at role profiles, when you talk to people that we're recruiting, they're looking for more than the traditional reporting.

CFO.

And I think it's difficult today to find those two views in a way that's valuable and independent.

And that's why they're looking for that kind of partner.

That's why CEOs are looking for that kind of partner.

And I believe finance leaders can have that unique view if they take advantage of it.

And to be effective, I think finance must constantly engage across the entire business with every single organization.

, you know, traditional finance's, you know, traditional experience of having a deep understanding of the business model and economics is really powerful because then you can make some of the tradeoffs that need to be made in the business.

So I think a CFO that can bring the economics to life within a business and has that deep understanding is what's leading the CFO to assume more of these operational responsibilities, and it's a driver of those things for sure.

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What's being achieved?

I think it's a couple things.

I think, number one, it's the ability to make sure that the company can prioritize, can focus, and have the right governance on every dollar of spending in the company.

Every company, no matter how well it's doing or whether it's struggling, has limited funds.

Then there needs to be an allocation and a governance process.

, whether that's on the IT budget, whether that's on adding salespeople, spending marketing dollars, making investments to improve an operation or a process within the company, all of those things need to be prioritized.

And if you don't understand the detailed operations of the business, being able to effectively lead that process, which I think the business needs led effectively, is a challenge.

So I think that's one big benefit.

what's working and to stop funding what doesn't.

Every company wants to put more money into things that are working and less money into things that don't.

So having that understanding, I think, allows you to do that entire prioritization and governance process better.

Number two, I think it allows you to very quickly identify where the risks are in the business.

So if you really understand the operations of the company, you can quickly see where something's going to go off the rails and where it's going to have a big impact on the successful execution of the strategy.

is external communication.

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Every CFO, every executive should be meeting with clients, should be talking with your business partners, and the CFO in particular should be talking to investors.

The valuation of the business can absolutely be driven by a CFO who truly understands the business, can articulate the story, can talk to investors in a way that helps them understand that you really have your hands on this business in a way that makes them comfortable, and I think that leads to valuation.

So I think all of those things can really have a big impact on the benefits of doing this.

So what are finance executives likely to face as obstacles after they decided to take this path?

I think, you know, for the traditional finance person, it's getting out of your comfort zone, right?

It's getting away from staring at numbers.

It's getting away from the day-to-day financial execution of the business.

And it's showing that you have a broad and deep knowledge, that you understand the introduction , that you understand clients, processes, products, sales, and marketing.

That takes a lot of time and effort.

And by the way, you don't lose all of those other responsibilities.

It's still a CFO's job to make sure that the books and records are accurate.

It's their job to make sure that you get billing out accurately and you get collections done and that the invoices are paid and payroll is done.

So you have to do all those things while also being the person that's actually going across the entire business.

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I think it can advance our unique perspective that we bring to the table if you really show that you understand the business coupled with that economics.

So I think it just helps the whole business connect the dots in a way that maybe others don't because they're not sitting across all these different things as they're looking to make these priority decisions as CFOs have to every day.

You know, and everyone says easier said than done, but I wanted to, and this is something we often do in the podcast, we get to learn how your own journey, your own finance career journey, how it was revealed to you, how you could achieve greater visibility into operations.

How did it happen for you along the way, Chris?

It's a great question.

I mean, one of the things that I did early on in my finance career is really think about what are the things I needed to understand and learn about our business so I could be successful in a way that would allow me to partner with the business.

to allow them to be more successful, right?

So it was not just about me.

It was about how can I help the business achieve their goals, right?

It's not, you can't be given a seat at the table, right?

You have to earn a seat at the table, whatever table you want to be at.

And so for me, I knew, for example, one thing I wanted to do was really understand the clients, understand how did a client think about buying our products and services?

How did they think about our products?

How does our sales force work and talk about , our value proposition and drive a client to purchase.

So what I did when I was the corporate controller is I started spending time with our inside sales organization.

And I went to the person that was running it at the time and said, you know, I'd really love to sit in on client calls that you're doing.

Since it was an inside sales force, they were telephone calls.

And I could simply put on headphones, keep them on mute, just listen to how the whole process worked.

And at first, people looked at me like nobody's ever really wanted to do that before from finance.

I said, well, I think I need to understand this.

I think I can be much more helpful.

And I do think that this direct visibility gave me a tremendous amount of knowledge about our clients, a lot of knowledge about how our business worked.

And when I ultimately became CFO and started talking to our sales force, whether it's about prioritizing their budgets or thinking about what investments they wanted to make, I could do that credibly.

And they knew that I was in front of clients.

They knew that I understood how they operated.

And I think it made a big difference in terms of of my ability to be helpful and for them to listen and hear what I was saying.

So I think that was a different approach that they saw from other finance leaders in the business prior to me taking that step.

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So are we likely to see organizations change org charts and lines of command?

Are they likely to change in response to this enhanced role that CFOs are now playing in operations?

No, I think it's a good question.

I don't think it has to change.

I mean, could CFOs take on more roles over time, more operating functions?

You know, I think so.

I think that's certainly something that could happen, particularly as the COO role continues.

to appear less and less on org charts, but I don't think it has to.

I think that it's more about leadership.

It's more about partnering with the business.

It's more about people looking at the CFO saying, this person can really help me be successful.

This person can bring a perspective to the table that I might not understand of the interdependencies across the whole organization or the prioritization of other projects and how what I'm trying to do might fit into that.

that the CFO, you have to drive that kind of collaboration.

And I think when people see it, they see the benefit of that.

So it really is about credibility.

And understanding the business better than anybody is exactly the kind of credibility that when you sit in a room with whatever functional area and whatever level of management you're talking to, whatever group or function, whether you get pulled into a team meeting in some part of the business, .

For that group to say, wow, he or she really understands what we're doing, understands how we connect, and our success leads to the success of the overall objectives of the company, that, I think, allows you to take on these roles regardless of the organizational structure that exists in the company.

That was Chris Lafon, CFO of Intralinks, taking a deep dive with us on the topic we call the operationalization for finance.

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