- Author: Tom Smith
- Posted: July 25, 2023
Learnings from an Interim CFO Gig > Geoff Buchanan, Interim CFO | Austal Ltd
When faced with the sudden void in financial leadership, organisations are increasingly turning to interim CFOs to address complex financial challenges and ensure a seamless BAU. The rise of the interim CFO has gained significant traction in recent years, offering a lifeline to organisations seeking a unique blend of expertise, adaptability, and strategic insight during periods of uncertainty.
But how do you become an interim CFO? Do you require a different mindset, and what are the key differences or common misconceptions? CFO Magazine A/NZ Editor, Richard McBride had the opportunity to speak with Geoff Buchannan, who completed an interim CFO role at ASX 300 Austal Ltd, to share his experiences.
RM – Geoff, thanks for joining us today – As an experienced CEO & CFO, what led you to becoming an interim CFO? Was this always part of the wider career plan?
GB – No, it wasn’t always part of the wider career plan but certainly something that I was open to. Whilst the main driver for wanting to become an interim CFO was probably a sense of curiosity, I also intuitively I believed that I could add value by virtue of my experience, and experiences, across multiple industries, functions and geographies. And whilst also having been a consultant, it became evident very early on that the role of an interim executive is very different to that of a consultant, as the focus of interim management is without doubt on driving immediate and tangible results.
RM – Can you share some background on the size and scale of the organisation you joined as Interim CFO?
GB – Austal Limited is an ASX 300 global shipbuilding company, constructing both Defence and Commercial vessels in Australia, USA, Philippines, and Vietnam; with turnover of over $1.5bn and 5,000 staff globally. The Group supplies Defence vessels of various sizes and capabilities to the Commonwealth of Australia, Border Force and the Royal Australian Navy, as well as to the US Navy and US Coastguard in the United States. In Philippines and Vietnam, we have constructed some of the world’s largest ferries. In addition, the Group has sustainment facilities in Australia, USA and other centres around the globe for the servicing and sustainment of these and other vessels.
A highly dynamic business, which in the past couple of years has significantly diversified and grown the number and variety of shipbuilding programs, whilst delivering on more mature shipbuilding programs. The recently commissioned Austal-constructed USS Canberra (LCS 30) in Sydney was the first US Naval vessel to be commissioned outside the United States, testimony to the high regard in which Austal is held within the US Navy.
RM – Unlike a traditional CFO appointment, which can often be a lengthy process, how quickly was the turnaround and how did you ‘hit the ground running’?
The turnaround time for the appointment was incredibly quick. I received a call from one of the Partners at Watermark Search International’s Interim Management practice out of the blue to assess my interest in taking on a 6-month assignment as Interim CFO with only two conditions if I was successful: i) relocate to Perth from Sydney for the duration of the assignment and ii) start asap. And this was during the height of Covid when Western Australia had shut their borders to the rest of the world!
That same week I was interviewed by the CEO, and later that week by the outgoing CFO, with some Perth based candidates interviewed early the following week. Within a few days I was advised that I was the preferred candidate if I could get my G2G pass approved and get to Perth within a week. I got my G2G pass and Covid certificate and was on a plane heading West the following Monday – the whole process from approach by Watermark to commencement at Austal had only taken 2 weeks!
I then had to undertake a handover from the outgoing CFO remotely from my hotel room in quarantine for 2 weeks, and only got to meet the CEO, CFO and leadership team face-to-face once released from quarantine, with the outgoing CFO finishing up 4 days later. However, I was grateful for the short but comprehensive handover, as I know that many interim managers don’t enjoy this luxury.
I ‘hit the ground running’ by engaging early and often will the CEO and all members of the leadership team, as well as with my Finance team. Listening is key in the first few weeks, and from that listening identifying what needs actioning – and how. As an Interim CFO, there is an expectation of delivery of results early on, so the ability to demonstrate results is key. In this assignment my immediate task was to deliver the half year results and ASX reports. So there were very clear deliverables and timelines. However, I was constantly thinking of ways to lift the quality and timeliness of delivery of results, whilst not limiting myself to reporting issues but also thinking of other ways to deliver value. I shared my observations and recommendations for improving systems, processes and lifting the quality of the Finance team’s contribution – with clear actions set out in a 30, 60, and 90-day timeline.
Ultimately the assignment has extended to almost 2 years where I have led the delivery financial reporting of 2 half year and 2 year end reporting cycles.
RM – What specific challenges or unique circumstances do you often encounter as an interim CFO and how did you adjust to the role?
GB – I would characterise some of the challenges broadly as follows, although I believe that each brings opportunities:
- CEO and Board expectation: as interim CFO’s are often hired to fill an immediate vacancy and/or to manage through a period of uncertainty, transformation or growth, by definition there is probably more often an expectation of accelerated delivery of results than would be expected of a CFO in a BAU role. Demonstrating an ability to deliver to this expectation is key;
- Ability to influence: given its interim nature, the role may be viewed by some as not being as substantive as the permanent role, so it is important to ensure that you have equivalent delegated authority as the permanent role would have. I was very fortunate is assuming the same level of delegated authority as my predecessor in the permanent role;
- Unfamiliar territory: the interim CFO role requires stepping in at short notice to a business, industry and/or geography – as well as a set of circumstances and stakeholders – with which you are not immediately familiar. This requires an ability to quickly observe and learn, and to be flexible in your approach to the new role;
- Continuity: uncertainty of duration of tenure and what comes next should not distract you from treating the role as if it were permanent and giving maximum effort through to the end of the assignment.
RM – What strategies do you employ to quickly gain trust and establish effective working relationships with the executive team, Board and other key stakeholders?
GB – I believe that engaging effectively and meaningfully as part of the executive team and with the Board and other stakeholders from Day 1 is key. This involves ensuring that you spend as much time with them as early and as often as practicable, and as is required to deliver the required results.
I also believe that a unique feature of many interim CFOs is their diversity of experience and the different perspective that they can bring to solving problems and proposing solutions, something that is valued by the CEO, executive team and Board.
It is also critical to ensure that you have, and are seen to have, the equivalent delegated authority to make the necessary decisions that would be required of the permanent role, and that all stakeholders – both internal and external – recognise that.
And last but not least, fully engaging with and providing effective leadership and mentoring of the Finance team is key. They need to see you as the substantive CFO from Day 1 rather than second-guessing how long you will be there for!
RM – Do you lead, manage and build your finance team any differently as an interim CFO?
GB – No. I have led, managed and built the team in the same way as I would have had I been in the permanent role. This has included refining the Finance organisational structure to better suit the needs of the business, putting retention plans in place and taking actions to reduce attrition – including a strong focus on learning and development.
It is also critical to ensure that each member of the team is recognised for their success, or where improvements are needed that this is communicated early and effectively both informally through day-to-day interaction and more formally through annual and semi-annual performance review processes.
RM – How do you prioritise your efforts and decide which areas to focus on first when stepping into an interim CFO role?
GB – I see it as a bit of a blank canvas. Like all roles, listen a lot at the beginning and then list what you think are the key challenges and how you might address them, as well as some ‘low hanging fruit’ (there always is some!). Demonstrating delivery of results is key to any interim management role, so once these challenges and solutions are identified tackle them with energy and urgency to deliver the results. Be able to demonstrate the value of these successes – ideally in the first 30 days and regularly thereafter!
RM – What are some common misconceptions with being an ‘interim CFO’?
GB – I think the most common misconception is probably the belief that as you’re only there for a period of time to solve a problem, or to keep the seat warm for the next person, that you cannot really influence outcomes in the same way as if you were the permanent CFO. I have found the opposite to be true. More specifically, I recall discussing with one of the Board directors a particular challenge that I was trying to resolve, and said to the director that I believed that my ability to influence the issue was diminished by virtue of my interim role. The director responded by saying that to the contrary, my interim position probably gave me greater flexibility to offer solutions to the problem – a very sound observation!
RM – Can you provide examples of situations where you had to make difficult financial decisions or implement significant changes as an interim CFO? How did you navigate those challenges?
GB – Given the nature of Austal’s operations as a major global contractor, a key challenge has been the determination and application of some key accounting judgements. Having the support of a strong technical accounting team and external auditors who understand the business is critical, as is ensuring full documentation of the assumptions that underpin the accounting estimates, and full disclosure. Identifying these areas and engaging with all stakeholders early is a crucial in navigating through these challenges.
RM – As an interim CFO, how do you manage the transition period when your tenure comes to an end and a permanent CFO is appointed?
GB – I was fortunate in having had several extensions to my contract and then an extended handover to the permanent CFO, so a good period of time to consider what I might do next. But in addition, the extended handover is allowing me to deliver an orderly handover to the new permanent CFO whilst jointly leading the completion of the full year Annual Report and ASX announcements. This is giving me the time to explore other options when my contract ends. I would welcome the opportunity for a similar interim CFO assignment.
RM – Could you share any success stories or notable achievements from your previous interim CFO engagements that demonstrate the value you brought to the organisation?
GB – Yes, I am proud of some of the achievements that my team and I delivered during my 2 year tenure. These include uplifting the quality and timeliness of annual and half year reporting with strong audit outcomes, elevating the quality and retention of the Finance team, the introduction of a new Treasury Management System, and the Finance team’s leadership in the successful implementation of a new enterprise-wide ERP system.
RM – What are some of the essential qualities or skills you believe an interim CFO should possess to be successful in their role?
GB – There are many essential qualities and skills that I believe differentiate the interim CFO role from either the permanent role or consulting roles, but I would classify the following as having been key for me:
Curiosity: there is both an expectation, and a necessity, to be highly curious in the interim CFO role, given that companies hiring interim CFOs are often doing so in response to an immediate need to fix something. Interim CFOs need to quickly understand the problem and be able to offer a solution;
Tenacity: for the same reasons as above, the interim CFO has to be tenacious in his/her recognition of problems, and in finding potential solutions;
Commercial awareness: unlike the role of a consultant, whilst the interim CFO is expected to also provide advice and recommendations, there is an expectation of delivering solutions and adding value – quickly. So, experience and a track record in delivering tangible commercial value is a key skill that every interim CFO needs to possess;
Stakeholder engagement: it is critical for interim CFOs to engage early and effectively with all stakeholders, to listen and to demonstrate an ability to grasp concepts and the impact of problems and offer – and deliver – solutions.
RM – What are you looking for in your next role?
GB – I am looking for a role that challenges me in a similar way to that of my current interim CFO role, and in an organisation which is on a transformation and growth journey: where I can both learn from a related or new industry whilst offering perspectives from different experiences. I have been fortunate to have worked across functions, industries and geographies in my career, including professional services, banking and finance, heavy industry and Not-for-Profits – and believe that I can apply the learnings and experiences from these roles to a number of different organisations.
RM – Any top tips or advice to fellow Finance leaders who may be considering pursuing an interim CFO role?
GB – It’s always easy to become ‘lazy’ with your networking when you are busy in a role, but given the uncertainty of tenure of interim roles its even more critical to retain your existing, and grow new, networks. I definitely recommend retaining close contact with your Interim Management placement firm, in my case Watermark, as you are an ambassador for their brand and good feedback from the client will inevitably place you in a better position to secure your next interim role!
Given the diversity of experience that Interim CFO roles offer, this can present excellent opportunities to expand your network beyond your traditional industry, function or geography – so leverage the opportunity. It provides the opportunity to upskill through on-the-job learning but may also present opportunities for in-house training and development.
In terms of personal brand, this expanded exposure to new networks, contacts and experiences can positively position your personal brand for your future role/s when leaving your current assignment.
RM – Geoff, sincere thanks for your time and some fantastic insights – All the best and look forward to following your journey!