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Why is CFO the coolest job? Because you get to be part of making things better. Ann MacTaggart, CPA CA CMC, helps us see the cool side of accounting.
Join Derek Hudson as he explores Essential Dynamics, a framework for approaching the challenges facing people and organizations. Consider your Quest!
And I'm Reed McColm welcoming you back to another episode of Essential Dynamics. Mister Derek Hudson. Derek, are you there?
Derek:Reed, I'm here. I'm excited. Let's get this going because this is a big episode. A big episode for
Reed:I can see that because we have a special guest in the in the house, we're very very glad that she is here. Derek, would you please introduce her and then let's talk.
Derek:Sure. So I'm happy to introduce my colleague, Anne McTaggart, CPA, CA, CMC. Anne and I have done a bunch of work together over the years, and she's recently tuned in to Essential Dynamics. I'm really interested to hear what another accountant thinks of what we're doing. And, also wanna talk about how we apply essential dynamics to the most interesting job in the world, chief financial officer.
Derek:So first of all, as we begin, maybe, Anne, you could tell us just a little bit about your background and how you got ended up working with me on stuff.
Ann:Okay. Thanks, Derek. I my background, obviously, CPA, CA, CMC. I met you back in the day at our articling firm, Pricewaterhouse, now PwC, and, you were working on your mentorship and leadership skills there because you were a little ahead of me in the in the firm. I think, you left the firm after I did, but I got, self selected out, from the auditing world and decided that I wanted to go out and see the other side of the audit desk and worked in a number of different places in industry and have kind of touched base back with you over the years and currently working with you on the unconstrained CFO, and with some common clients that we have.
Ann:And I will also accredit you with my current consulting practice, which has now been, if you can believe it, a decade as of next month. You were the guy that helped me get my very first clients and start my journey as a consultant and a, what I like to call a professional helper, and those clients have been mostly helping in the CFO role. So doing that fractional CFO work and using my experience in industry before that as a CFO or a controller or a finance professional in other companies. Now helping smaller companies that can't have a full fledged CFO in their in their four walls today.
Derek:So why is CFO, like, the coolest job you could possibly have? And and we're we're here with a radio personality and an actor and screenwriter. How do we convince them that we CFO is the coolest job that you could have?
Ann:Well, it's kind of like it's it is the coolest job because you get to see everything. Even though you're not the number one in the organization, you you could be as well, but you get to see all the parts of the organization and only be responsible for a little part of it. So your ability to see areas where you can add value are best when you can see the whole landscape.
Derek:Super. I agree. I agree. And I've had that experience, and we'll we'll talk about that a little bit in the context of essential dynamics.
Reed:I I just wanna jump in here and say that until this episode, my personal opinion was that the greatest job that anybody could have was assistant crack whore. But I am very glad to have been corrected on that. I will now proceed in my life with the ambition to become a CFO. Go ahead.
Derek:Okay. Thanks, Reep. So I I just realized we dumped an alphabet soup out there on people, and our listeners come from a broad swath of society. So CPA is a chartered professional accountant. CA is the best kind of chartered professional accountant, which is a chartered accountant.
Derek:And then certified bias. No. And then certified management consultant means that we're professionals that don't have to do just number stuff. We're also management consultants. And the CFO is a chief financial officer, and we all know that, money makes the world go round.
Derek:And so if you're the in charge of the money in an organization, as Anne says, you get to see everything end to end. So, Anne, I'm interested in your reaction, and I don't need compliments here. I don't often get them. But I'm interested in your reaction to what you've seen with Essential Dynamics where, you know, for 20 episodes or more, we really haven't talked very much about financial stuff. And, I feel like I should go back to my roots.
Derek:That's one of the reasons we wanna talk today. So, you know, what questions do you have or what observations do you have about the things that we've talked about on this podcast so far?
Ann:I don't know what I have about the questions until it flies into my mind, but I do have some observations. And I know that, you know, in earlier versions, talked about how you got to developing this framework, and that's what I'm gonna call it, or a lens, or it's kinda like sunglasses for looking through a lens at your business or your business problem or even areas in your life. I know that you well read, researched, and pulled together your thoughts and did a lot of thinking about how all of these pieces fit together. I love the fact that in my experience as a CFO or even as just an accountant, or consultant going in and being that professional helper, what you learn to do over your years of experience in any career, not just in finance, all business problems need to be looked at from various angles. And that whole people path and purpose sort of summarizes those three angles you can look at.
Ann:So where is my root cause of this particular symptom that I'm seeing? And the purpose x and purpose y talks to you about the why is the root cause what it is. But the people, path, and purpose is the approach. So that's how I read that framework.
Derek:So they think that us we accountants only think about the numbers. But the way I think about it is is there's a story and then there's the numbers, and the numbers have to match the story. And so the idea of a quest, if you think about it, you know, big picture, the quest is a story. So let me let me let me test you a little bit, and you it's fair if you ask me the same question. In the projects you've worked on in your career, have there been any situations where the the work that you did ended up sort of pushing against or challenging the purpose of an organization or confirming what the quest actually was?
Ann:I think I can't I don't have a a way to articulate the yes answer, but I would I would put that back to you to kind of tell me more, and then I might be able to come up with something a little more concrete.
Derek:She's good, isn't she, Reid? Yeah. She's good. So one of the projects that I've I've been working on, I mean, actually, let me just go back a little bit. In early in the pandemic, I talked to a bunch of business owners, and I was you know, my consulting practice had just started.
Derek:I wasn't very hopeful that I would get new clients, you know, and get get paid when everyone was shutting everything down and didn't know what was gonna happen. I was really scared. But I talked to a bunch of business owners, and one of the things I identified was that the business owner got into their business for a particular reason and viewed it a certain way, but the business itself was, be had become a separate entity to the owner. Because the business had customers, employees, suppliers. There was a system.
Derek:Sometimes the owner was, you know, shoulders deep into the system. Sometimes they're a bit more removed. But even though the owner owned a % of the business, because it was this complex interaction of, of a bunch of people, with money flowing back and forth between companies, the owner couldn't just it wasn't just the owner anymore. And, so some of the owners were then thinking, you know, what do I want as we face this pandemic? But they also had this other problem, which is what do these people need?
Derek:What does this system need? You know? And maybe the thought first went to their employees or maybe it went to their customers, but there was a clear distinction between the owner's interests and the interests of the organization even if the owner owned a %. And it was that thinking that got me, I think that was the thing that broke broke or that made, obvious for the first time purpose x and purpose y. So purpose x, you know, for the owner initially started the company to make money.
Derek:Had an idea, had an investment opportunity, a product, or whatever, and they started the company to make money because they needed to make money to provide for their needs and their family. But then this this organization grows up, and it's all all of a sudden exists to supply this, you know, valuable product to its customers. And then there's employees and families that rely on the employees and stuff like that. So, anyway, that's that's some of my early thoughts on, you know, purpose x, purpose y, the purpose of an organization. And that has really big implications even for how you would do financial analysis.
Derek:So how's that back at you?
Ann:That's pretty deep, Derek. Thanks. I think that where I can sort of jump into that is when you talk about how the business becomes an entity of its own with its own needs and wants and self propulsion system. And the owner so working with owners and working with coaching owners on how they keep track of this octopus that has has grown so many legs is is part of what we do, you know, in in business coaching. So I think that that would be my applicable experience where you're trying to help the owner let go to the right things, but still be able to have their purpose and and carry on with their quest of what they want from that organization versus letting them let go and share in, supporting the purpose of the organization and the employees that are in it that are driving maybe in a slightly different direction, sometimes in an opposing direction, and sometimes sort of side by side.
Derek:So so one of the things that that makes me think of is a word that I really like that I've been studying a little bit in the last few weeks, and that is stewardship. And if if accounting is anything, it's the mechanism by which, you know, a stewardship, relationship can be established and monitored. So if you think about the, sort of historical concept of a steward is the property owner or the king or whatever can't be on top of everything. So he appoints a steward as his agent, and then the agent has responsibility to act as if they were the owner, but they're not the owner. And we might get the the one literary example that that I'm thinking of is the steward of Gondor in Lord of the Rings, and I and I know you don't pay attention to that stuff.
Derek:So, Reid, you might Reid might have a comment on that one.
Ann:Well, I think so.
Reed:I I would think of Higgins on the on Robin's property in Magnum, PI. She is the well, she now, but she is the steward. Robin, is never seen on the series, actually owns the place. Thank you very much. I'm here all.
Reed:Good.
Derek:Yeah. Read read good. Thanks for bringing that up. So modern, like, financial systems separate owner ownership from management. So, you know, our RSP investments are in mutual funds that are in companies.
Derek:There's not one owner of all these massive companies. They need, all kinds of capital to do their work, and so there's, you know, hundreds or even millions of owners of a company. The owner isn't present to be able to take care of their interests. And so that's how you get boards of directors and the board appoints a CEO. And it's the financial information that's used to hold to the steward to account.
Reed:Yep. I have a question, Derek. And and our stake stakeholders in a company that's open and has stakeholders, are they the owners?
Ann:I think I'm going to say yes, both and. So a stakeholder can be anybody. A stakeholder is somebody that has interest and has a need that you're serving in your company. So a stakeholder can be an owner. A stakeholder can be a customer because they are getting served by the company.
Ann:A stakeholder can be a vendor or a supplier to a company because they also have an interest in your success because then they're going to get paid for their service that they provided to you. So I think I think it's all of the above. Even in a public company, you know, those stakeholders are your shareholders, and your stakeholders are a part of your board as well. So it's anybody that has an interest and your employees actually as well.
Derek:So so, Anne, we were talking about how the CFO gets to see everything.
Ann:Mhmm.
Derek:But one of the responsibilities of CFO then is to help the company be accountable to all of its stakeholders. Another stakeholder is the government.
Ann:Yes.
Derek:And they wanna get their slice for taxes. Another stakeholder might be a a funder if they're giving out grants or, you know, funding a research program or something like that. Now, Reid, I just looked up this quotation because I know I tried to go Lord of the Rings and you went Magnum PI. But I wrote this down. It's in the book.
Derek:Gandalf said, for I also am a steward. Did you not know? Gandalf was this wizard that lived for three thousand years and was supposed to, like, take care of the peoples. I think that's that idea of stewardship is a really cool way to look at anyone's responsibilities. But I think as as CPAs were attuned to this idea of stakeholders, I think it's something that we have to kinda offer the world.
Derek:Go ahead, Anne.
Ann:I would I would also add to that, Derek. We're not only steward, and it kinda goes back to where we started. Well, why being a CFO is, like, the best job in the world. You might be a steward and, you know, generally, people look at CPAs or CFOs as stewards. They're counting beans.
Ann:They are accounting for stuff. But that's the compliance side of the work that they do. The greatest part of the job, in my opinion, is the part where you're part of the moral compass of the company, you're part of the directional GPS as you will, if that's a a good analogy. And you get to be part of impacting that company's purpose or path in delivering on on that stakeholder value.
Derek:So so the steward the wise steward doesn't just not waste his master's resources. He he magnifies them. He invests them well and makes them better. Yeah. And and for us, that's the funnest funnest part is making stuff better.
Ann:Yep.
Derek:So, Anne, maybe before we wrap up, why don't you talk a little bit about what we're doing to try and help CFOs be better better stewards and better CFOs?
Ann:Okay. I would love to talk to you about that. The unconstrained CFO forum is a forum that we've set up. We've been in market testing for a little while, talking to CPAs in their career somewhere that are aspiring or already in that CFO role, and they are able to come together and talk about common problems around being in industry, being the sole finance leader in their organization, and needing support, not needing support, but getting value from support of their peers in solving business problems that they face. Because not all folks that work in industry that are not finance professionals, they don't really understand some of the, I don't know, rules of the game or some of the things that challenge CFOs to do the right thing or toe the line, yet do that by supporting the business to move forward.
Ann:So being part of a networking group and working through some of the common business problems of being the lone CFO or the lone financial helper allows them to solve problems, take those problems back to their organizations with some solutions, and implement and move their career and their company forward.
Derek:We're super excited about it. So you can find more information on that at unconstrainedcf0.com. And so if you're a CFO or aspiring CFO, there's some great stuff there, and, we'd love to talk to you. If you're a young person, one of our recent episodes was to the class of 2021, and you want a really interesting career where you're using your mind all the time to make things better, Anne and I would, love to talk to you as well, because there might be a cool career for you in accounting even though that doesn't sound like a sentence that should make any sense at all. Reid, I think I think we did it.
Derek:What do you think? Or is are our
Reed:CFOs interesting? I think it's very interesting. I'm looking forward to becoming a CFO for the rest of my life. I have until this point been the CFO of my own finances and have horrifically failed. But I am looking forward to success from here on out.
Reed:Ann McTaggart, thank you for joining us. Thank you so much. We do appreciate it. And Derek, where can people find you?
Derek:Read it's easy to find me online. It's derekhudson.ca and Derek is d e r e k.
Reed:Thank you. That's why you're not responding to my emails. Well, thank you very much for joining another episode of Essential Dynamics. Anne McTaggart was our special guest. Brynn Griffiths is our studio engineer.
Reed:Derek Hudson is our guru. And I'm Reed McCollum saying, until next time, consider your quest.