In today's business environment, a CFO's role is one that is always evolving, broadening to fit the times, according to Bob Arace, CFO of Newington-based Arburg Inc., a German manufacturer of injection molding machines.
It's quite a difference from a generation ago, he said, when it may have been more accurate to have described the CFO as merely the top financial person in the company, the one who watched costs, watched the bottom line. Those are necessary skills, of course, but imply a role far more limited in scope.
Having first become a CFO in the late 1980s with Netstal-Maschinen AG, a Swiss competitor of Arburg, Arace's responsibilities for the past dozen years at Arburg have expanded to meet the company's increasing obligations.
Arburg is a global corporation with a presence in 24 countries, trading partners in 50, and a worldwide customer base that includes the automotive, communications, medical technology, consumer electronics industries and others.
"Back around the late 1980s,'' Arace said, "the title was probably still viewed as a way to reward a good controller as a good accountant. That person now is viewed as a business partner by the president and vice presidents in most companies.''
"I'm involved in much more than the traditional finance functions. I'm involved in human resources. I'm involved in strategy for the company. I have responsibility for our computer systems, insurance, banking and legal. I'm involved in the sales process and, in fact, occasionally go out on sales calls. It's a lot. Today, a CFO needs to be a well-rounded business person and a very engaged partner to the management team."
Arace attributes his having worked as a financial analyst earlier in his career as instrumental in focusing his goals and career path.
"As a financial analyst, you're into budgeting and forecasting. You're spread around the company spending time with sales people, marketing people, engineers and other functions in the company and you're really trying to understand what it is they are doing, why they're doing it and how it helps the company."
Forecasting and planning in today's business and economic climate, Arace said, has become particularly complex and he makes it clear that forecasting is very much a team effort.
"We've got great people on board and we happen to know our business pretty well here," he said. "It's definitely a collaborative process and we spend a great deal of time trying to get a good feel for what the next 12 months will look like. Flexibility in this process is key so you can adjust your thinking as the actual results start to materialize."
The economic recession of the past two years was difficult for Arburg, Arace said. Business began slowing in the fourth quarter of 2008 and lasted into the third quarter of 2009, essentially an entire year. It began rebounding in the fourth quarter of 2009, he added, and, so far, 2010 has been an exceptional year.
"It was a tough time to get through, but we were confident business would eventually come back. One thing I am particularly proud of, " he said, "was that we — the president and the management team — got together and decided, knowing that we had an extremely talented employee base we did not want to lose, that we were not going to lay anyone off. We'd hold out as long as we possibly could, knowing our competitors would be laying off — which they did. Then, when the market came back, we'd be ready to hit the ground running with our highly qualified people calling on our customers, while our competitors would be scrambling to rebuild. And you know what? That's exactly what happened."
John Ward, Arburg's national sales manager, described Arace's value as his ability to implement and manage all of his corporate responsibilities to an exemplary standard.
"Of equal importance," Ward said, "has been his role in facilitating and creating the right finance packages and incentives which have helped our company meet the current needs of our customers and enabled us to our grow market share in a very competitive industry."
Arace has reached a point in his career where he generally has younger people reporting to him, he said. Among the greatest thrills he receives now as a CFO is teaching those younger executives coming up and watching them develop their skills, whether they stay with Arburg or eventually move on to other organizations. But there's something more, he said.
"Probably the thing I take greatest pride in at Arburg is that we, as officers, recognize we have a responsibility to the people we employ. They have families and livelihoods and they're able to make a good living here. We take that very seriously. I feel good about that."
Name: Bob Arace
Company: Arburg Inc.
Company headquarters: Lossberg, Germany
Local office: Newington
Education/credentials: B.S., finance, Bryant University; MBA, Babson College