Chris Johnson got his first indication that the newly-created position of CFO at fast growing South Australian electronics manufacturer REDARC, would require more than just technical and financial skills during the interview process.
Only one of the five interviews focussed on the technical skills of Chris, who had previously worked at large corporations where his financial skills consumed most of his time. During the other interviews he was shown the company’s growth plans as well as meeting all his direct reports and the entire management team.
It was during the process that he was able to observe the communication skills of REDARC’s managing director who knew every employee by name and what they were doing, including training programs. Chris pointed to this talent as being a significant influence on his decision to want to join the company.
“Communication skills are massively important to the business,” he said.
In late 2013, Chris joined a business that was growing at plus 20 per cent a year but whose entrepreneurial founders recognised a need for greater information for planning, backed by strong internal controls and processes.
After a month spent checking the figures, essentially a corporate health check that confirmed this side of the business was going well, Chris spent the next six months reviewing where the money was being spent and where the business could get the best return.
Most of the company’s money is spent on engineering and innovation. A minimum of 15 per cent of sales revenue is invested in research and 25 per cent of employees work in R&D and innovation.
“This represented the first big opportunity for me,” Chris said. “The goal here was to ensure clear visibility of our investment going into innovation and commercialisation of new products, to help ensure we were getting bang for buck.”
Fine-tuning the processes that underpinned growth aspirations for REDARC enabled the company to lessen its dependence on organic growth. The better use of information for internal purposes allowed the board to identify opportunities for acquisition that could be successfully merged with the existing business. Within two years, the business acquired a going concern and the product range and IP of another organisation.
“Also being a privately-owned SME, with an entrepreneurial owner and management team, my role was to act as an extra filter by continually monitoring the risk/reward picture,” says Chris said.
For Chris the biggest challenge is working on his communication skills, which he is addressing through further training. Unlike his previous jobs, where he was surrounded by finance individuals like himself, the bulk of his time at REDARC is spent on commercial matters and strategy.
“You’ve got to be able to communicate with everybody in the place.”
He also has to be a jack of all trades, able to handle procurement or, as occurred with the recent company acquisition, deal with IT matters.
“You have to be able to take it in your stride because the potential to grow is so much quicker in this environment than in a large corporate.”