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

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


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


FULL EPISODE TRANSCRIPTAdam (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 ...