Ep. 133: Hilla Sferruzza - The CFO's Four Lines of Sight

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Contact Hilla Sferruzza: https://www.linkedin.com/in/hilla-sferruzza-cpa-mba-b3170b8/

Meritage Homes: https://www.meritagehomes.com/

FULL EPISODE TRANSCRIPT
Adam (00:05):

Hey, everyone. Welcome back to Count Me In. IMA's podcast about all things affecting the accounting and finance world. Adam Larson here with you again, and I'm pleased to introduce today's featured guest speaker Hilla Sferruzza. Hilla is the CFO of Meritage Homes and spoke with my co-host Mitch about the role of today's CFOs. In their conversation, she explains why future ready executives must have a holistic view of the business and possess four lines of sight. Keep listening to hear more about finance, strategy, technology, and more.

Mitch (00:42):

So in today's episode, we are talking about the role of the CFO becoming more central, more complex. Let's start broadly, and then we'll kind of work our way into some more specifics. So first, what is it about today's business world and the way organizations are run that requires the CFO to have a more holistic view and a better understanding of the business.

Hilla (01:05):

So, thanks for having me on Mitch. In today's world everything is moving at an accelerated pace. So change digitalization, everything is causing technology to just move really fast. So the risk of taking a wrong turn can be really expensive. So I think the CFOs have to take a step back and kind of look at the entire landscape of a company and really understand all of the interconnectivity of what we're doing as a company, as an organization, and make sure that decisions that are being made really impact the organization appropriately. So whether we're looking at it through the financial lens or risk assessment lens, a technology lens, an investor stakeholder lens, you know, more recently ESG and DI lens. It's really important that we understand the implications of everything that's happening. We're much less siloed than we used to be. I think we were kind of along this path anyway, and then maybe the pandemic and working from home accelerated that where decisions are being made real time very, very quickly. I would say in the public sector, where I am the CFO, it's maybe even more accelerated and CFO is having to answer live, you know, kind of on the go conversations, whether it's from investors or from analysts, you really have to have that broad knowledge of what's happening in the market, as well as all your competitors. So you kind of are a co-leader of all this data and you have to bring it back internally and make sure the guidance that you're providing the rest of the executive team and the initiatives and strategy that you're driving as a CFO really encompass the entire company's organization and operations, not just, you know, what are we looking for on the bottom line? What's the EPS going to be, of this decision, the consequences of this decision.

Mitch (03:00):

Now, with this deeper understanding, this broader understanding as well that you just mentioned of the business, how are you better able to lead the strategic planning, the risk mitigation processes for the organization? We have a lot of these individual conversations about, you know, the role of the CFO, but what is it about the CFO of the finance team that really allows them to work cross-functionally and ultimately make these important strategic business decisions?

Hilla (03:26):

So I love to say that the finance team is agnostic, right? Our only goal is the success of the company as a whole. Every other functional area, maybe has a little bit of a different spin. Maybe it's conscious, maybe it's subconscious, but they're all driving to a different objective. Maybe if you're in sales, you're focused on a different metric and if you're in operations or in purchasing or in marketing, everyone's got a little bit of a different spin on what they think is most important to make the company successful. I think finance is agnostic, right? So we can maybe take a step back, see the entire picture, not get lost in the forest or the trees and then give counsel that is best for the organization. So I can share an example. So I work for a home builder. We always have a little bit of a push and pull on timing and on dollars. We break our teams between the folks that do what we call horizontal work, which is land and vertical work, which is the actual construction of the building. There's always a little bit of a tug of war between those two departments. The finance team can take a step back and say, well what's actually most beneficial for the organization is to take this approach. Sometimes it breaks or it's one department, other times it breaks towards another department, but maybe, you know, I keep on saying agnostic, maybe a different word is also arbiter, right? We're kind of the one that maybe can help negotiate between all the different departments and through dollars and cents explain why certain decisions are the best decisions for the organization as a whole, even though there may be not an ideal state from one department versus another.

Mitch (05:06):

I think that's a great way to put it, the arbiter at the end that you mentioned, it really is, you know, just the understanding that we're talking about here from both sides of the equation and making sure that things balance, you know, when it comes to accounting, making sure that everything makes sense and works out. The way you explained it right there, the push and pull really helps clarify things, so thank you for that story and that analogy. I think, another interesting part of your role as we talk about these different decisions and different teams working together, obviously you have oversight over the finance team as CFO, strategy, operations, all the regular things that the CFO has a responsibility for, but you I understand also have oversight over IT. So what are some of the advantages of having IT under your umbrella when it comes to these cross-functional teams, cross-functional conversations and things like that?

Hilla (06:00):

So, obviously I'm a CFO. My first love was always numbers, but I will say that my current passion maybe almost bordering on obsession is the IT function. So I kind of inherited the IT function as I think a lot of CFOs do because the underlying system of record, the accounting system is kind of my general umbrella. And IT is a role that I guess it could sit with the CEO, the COO, or the CFO in a regular organization, but they're a little bit of a, you know, they kind of get tossed around. Nobody really wants to own it. It's a little bit intimidating to have a function roll up to you that's maybe not your core level of expertise. So when the IT team became part of my CFO team, I was nervous and excited. It's been a long time since I kind of didn't know something from soup to nuts, but I really dove in and the more I dove into the IT function, the more I realized that IT was going through a metamorphosis, right. They had kind of been the back office, keep the lights on part of the organization. Nobody even knew where they sat and call them if your password didn't work. And then they've really morphed into a key contributor and everything operations. Sure we still help you with your password, right. But the real core of what we do is operational efficiency, operational excellence, and, giving us that edge, that next differentiator. So for me as a CFO, this is the lens into the business. This is the lens into ops, all of the projects, all of the requests, whether it's a wholesale change ...