CFOs are as equally responsible as their c-suite peers for leading strategy and representing their organisation at an external and internal level, Juniper Network’s CFO claims.
Global executive vice-president and CFO, Robyn Denholm, is the networking vendor’s finance leader but also deftly balances this with business transformation responsibilities.
“The CFO is a bridging role between the different areas of the business, whether it’s engineering or marketing, sales or service and support. It is a role that spans the entirety of an organisation’s operations,” she claimed.
As well as overseeing finance functions, internal auditing and industrial relations, Denholm looks after Juniper’s operational charter including IT and business transformation, and heads up manufacturing operations and global real estate.
“Technology can be used quite strategically, both from the perspective of running the business more effectively and efficiently, but also in terms of creating revenue opportunities,” Denholm said in response to why finance and technology have come together under her jurisdiction.
“When we talk to our customers, whether it’s our service providers or enterprise clients, the big themes that come up are getting more efficiency and effectiveness from a capital spending perspective. That is a blend of what the technology can do as well as the finances of the company.
“Our CIO is also very engaged from a business perspective, internally running company operations but also working with customers to deliver the advantages of our technologies in their own networks. We work hand-in-hand with IT.
“Our customers, like us, are looking for how to drive new revenue opportunities and our products do that within their world.”
Innovation and the CFO
Juniper is a technology company that positions itself around innovation, and Denholm takes her contribution to that very seriously. Her focus is on making sure the organisation has a tight financial strategy to support its substantial R&D investment of US$1bn per annum. She also ensures these funds go to the right products at the right time.
“We want to get maximum value from those dollars on an ongoing basis,” she said. “Our strategy is to look at the market opportunities, what areas of innovation are required from our customers’ perspective and our competency in those, and then how we prioritise that investment.”
Juniper was established 16 years ago and now records revenue of US$4.4bn. The majority of growth has been organic, and fuelled by its ability to offer new and disruptive technology products. The company’s initial success came through developing a new way of network routing.
Denholm outlined the current corporate strategy as ‘3-2-7’ – growing three high-performing networking businesses in routing, switching and security; addressing two customer sectors, service providers and enterprises; and focusing on seven key domains of networking.
“It’s that type of investment we make on an annual basis and our smart engineers that give us a unique culture focused on building the best products for our customers,” Denholm said.
Juniper and the networking industry have experienced dramatic change in recent years, led by wider technology innovations and the social phenomenon. “Things like Facebook and social media wouldn’t exist if you didn’t have a network that was pervasive across the world,” Denholm pointed out. “Even though what we do at Juniper is primarily in the ‘plumbing’ area around how the network works, it is interesting to see what the applications are in society today.”
Even within the plumbing, profound changes are occurring including the move to Software Defined Networks (SDN), a process that could transform how networks and data centres operate in the near future. Against this, Denholm stressed the importance of three goals: Building the best products, taking market share in the key markets Juniper operates in, and creating remarkable customer experiences.
“My job is to do that in a way that creates long-term shareholder value and does that consistently over the long term,” she said.
Being a leader
One of the ongoing challenges CFOs face globally is to be recognised as strategic business contributors. According to the latest <i>The CFO as Catalyst for Change</i> report produced by Longitude Research and co-sponsored by Oracle and Accenture, more than two-thirds of CFOs believe their strategic influence has increased over recent years, yet only one-third play a leading role in strategy formulation today.
“There may be CFOs out there that can be effective without being engaged in the strategy of the company, but I’m not smart enough to know how to do that,” Denholm told CFO World. “The way I have engaged throughout my career is to understand where the industry we operate in is going, what the market opportunities are, where the addressable market is, how to capture those opportunities, and what the core competencies of the company are.
“Being part of that process as CFO enables us to then encapsulate those opportunities in order to create the long-term shareholder value we strive to achieve.”
Denholm did admit, however, that increased focus in recent years around compliance and regulatory frameworks such as Sarbanes-Oxley, could potentially have led CFOs away from taking more active business leadership roles, embracing risk, and even being considered CEO material.
“They are very important things, but if that’s the only thing other CFOs do out there, I don’t know how they create long-term value for the company or for the shareholders,” she said. “I look at this role as a wheel – you have to have round edges on each of those areas to be effective. The compliance function for example has to be right, and looking after those aspects of the company means you need strong operational skills as a CFO, but you have to have that strategic interest to drive growth as well.”
Denholm advised other CFOs to adopt situational leadership skills and to constantly re-evaluate when it is appropriate to take risk, and when not to. For example, CFOs will sometimes need to be cautious and spend more time talking about forecasts and what is going well, versus what is not. This triggers different sets of conversations at the operational and executive level.
“One of the ways I look at it is from a Juniper perspective is we’re in technology, which is inherently a risky industry to be in,” Denholm explained. “You get it right sometimes, and sometimes you don’t from the point of view of embedding new products. I view that as the primary risk the company takes day in, day out, therefore I counterbalance that with a relatively conservative financial set of strategies.”
Partnering with other executives is critical as a CFO, and Denholm works closely both with her CEO and the rest of the executive team.
“CFOs play an important role in the strategy; they also play an important role in fiduciary duty to the shareholders to make sure there is a balance of risk. You can have both in the same person. The stereotype of CFOs wearing green eyeshades and being relatively quiet or not forthcoming with ideas around how to grow the business isn’t necessarily typical.”
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.