What can CFOs do to keep their organizations stable even when the economy and the world appear to be in turmoil? Much depends on continuing to articulate financial goals for executives and the company as a whole.
How has James Rochette, Chief Financial Officer of Anaqua, a software company focused on intellectual property management, approached this challenge in his more than 25 years of experience in the financial industry? He spoke with Katie Kuehner Ebert about how finance can guide and support organizations during times of rapid growth and global expansion.
High interest rates, economic instability and heightened political risk have characterized the past year for the financial industry. What is your advice to financial leaders during uncertain times?
At the end of the day, resiliency and stability are needed to navigate the frequent economic disruptions and uncertainties and position your business for sustained success in 2024 and beyond. One of the assets of a company that is usually inconspicuous, but essential to providing stability, is intellectual property. [IP]. I've worked for several organizations and have seen intellectual property values remain resilient even during economic downturns like 2008 and 2020.
In times of uncertainty, businesses often shrink their budgets as customers cut back on spending. To maintain a competitive advantage with little new investment, many companies rely on innovation and momentum in patent and trademark filings. Properly managing a company's IP portfolio can help keep the core of the business going even when budgets are cut. Immediate priorities may overshadow IP management, but it's worth prioritizing in your 2024 financial planning.
Based on Q1's planning and budget conversations, what are some notable areas for CFOs to monitor for the rest of the year?
Generative AI is the first thing that comes to mind for many, but more generally, the digitalization of finance will be a key theme in 2024. The goal of digitization is to collect as much data as possible while streamlining time- and resource-consuming manual tasks. By integrating automation into the finance department to handle more administrative tasks, employees can free up valuable time for more strategic tasks such as analysis.
The best time to introduce automation is during a company's growth phase, such as a merger or global expansion. Automation allows finance teams to increase productivity and accommodate additional inputs due to growth without increasing headcount.
I also closely monitor foreign exchange and interest rates and act early to mitigate these external factors. Because global companies like Anaqua are highly exposed to interest rate fluctuations, CFOs must anticipate and balance these fluctuations.
You have business experience in the European market. What advice would you give to a CFO working with other executives to build a global company?
While global expansion is a natural growth stage for many companies, it can present unique challenges for finance teams. I started my career in Europe, lived in Asia for a while, and now work in the US. There are cultural and financial differences in different parts of the world that CFOs should be aware of. Before expanding into a new market, preparation and research is essential to ensure your finances comply with local accounting regulations.
But despite all the plans in the world, CFOs need to remain adaptable. As important as developing a financial strategy and leading a dedicated finance team is being a leader and supporter of other parts of the organization, especially during times of company change.
Can you tell us more about how financial time can guide and support other parts of the organization?
Finances affect profits. As part of this, we develop strategic goals and workflows to run your business efficiently. CFOs must effectively communicate what each department needs to succeed. Expanding into new markets may signal that it's time to establish yourself on par with other leaders. This requires communicating the company's financial goals and outlining each department's role in achieving those goals.
Adopting a service mindset and positioning finance as a strategic partner will help CFOs during difficult times. Doing so increases the likelihood that financial goals and initiatives will be respected and properly integrated across departments.
Another aspect to stay on top of during your global expansion is ensuring your intellectual property is protected. Obtaining patent protection in a foreign country often requires a foreign filing license from the office that originally granted the patent. Preempting these licenses and filing patent applications in new and expanding areas is essential to selling products around the world, enforcing patent rights, and protecting what could be a major source of revenue for your company.
