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A show that brings you the latest market updates and insights to help you make smart investment decisions.
00:00:02.520 — 00:00:09.600 · Speaker 1
Hello and welcome to the ASB Investment Podcast. The show that keeps you up to date on the market and helps you make smart choices with your investments.
00:00:11.360 — 00:01:42.350 · Speaker 1
These are entirely our own views and that of our guests. It's not investment advice, but we know plenty of experts at ASB that will be happy to chat if you need. Well, welcome back to another edition of the ASB Investment Podcast. We're back with a fresh look at a repeat topic, the mood of the CFO report. We've had had the team on a couple of years ago, every year starting two years ago, but we're back focusing on 2026 as findings and what they tell us about how finance leaders or finance, as I say, are navigating cost pressures, technological change, talent challenges and an uncertain growth outlook, which seems like it's been sort of every year for the last few years.
It isn't just relevant to people in executive seats of our biggest companies or our most innovative companies, and who you'll meet shortly. There are learnings here for all of us, you know, as CFOs and those managing the finances of businesses around the country. They shape what happens where investment goes and we're hiring occurs.
So joining me once again or is and are Lee Marshall, managing partner at Hunter Campbell, who has overseen the report since its creation. Founded it, created it like the founder and Scott Maude, CFO of Holter, who brings a practical perspective from a fast growing. I think there's probably very few that are faster growing NZ tech business, operating the real economy.
Welcome back to you both. Thank you. Because you're both returning champions to the podcast leave. We start with you I guess, what have you. I mean, apart from another report, what have you been up to in house Hunter Campbell going. How's how's the recruitment business going?
00:01:42.390 — 00:02:42.860 · Speaker 2
Yeah, thanks for having us back, mate. It's great to be here. Um, so on the managing partner of Hunter Campbell. We're a specialist, um, search and recruitment business based here in Auckland. Um, anchored in the accounting and finance sector. But we've also got leading sales and marketing and supply chain and procurement divisions too.
And I've just entered my 20th year. Recruiting into the accounting space I have makes me feel very old. Um, but look what led us to start the mood of the CFO. Three years ago was was a desire to give CFOs a platform to have their voices heard. CFO was a pivotal figures in strategy and performance and consider macro and micro economic factors on a daily basis.
And from my perspective, there's no one better to give a 360 view on what's happening in the business world. So this year we've had 316 CFOs take part, which is a big step up from last year. Yeah, 236 last year. And we think that growing contribution really points to CFOs really wanting to have this platform and have this conversation exists.
So we're really proud. And we've also brought ASB on as a sponsor. So it's a big news.
00:02:42.860 — 00:02:43.460 · Speaker 1
So how about.
00:02:43.460 — 00:02:45.100 · Speaker 2
That. Yeah. Delighted to be here again.
00:02:45.260 — 00:03:02.890 · Speaker 1
We would have we would have entered that regardless of the partnership because it's I think it's a really, really critical topic. So Scott you're back and with a new, uh, I guess logo attached to you, you were trade me when you were here first and now you're with Holter. So why the change? And I guess. How's working at Hunter?
00:03:02.930 — 00:03:05.650 · Speaker 3
That's right. Yeah. So, um, Jordyn told her a year ago.
00:03:05.690 — 00:03:06.170 · Speaker 1
Yes.
00:03:06.210 — 00:03:45.490 · Speaker 3
And it's it's hugely exciting. It's a privilege to be part of Holter. Yeah. I feel, um, I'm very proud to be there. A business making real impact on New Zealand and, yeah, the real potential to go global. So it's awesome to be there. Um, yeah. I was at Trade Me prior to halter. So my teams are my background. I'm an accountant of nearly 25 years.
Um, it's been a CFO for the last ten years. So most of my focus has been in growth technology businesses. My first CFO gig was at a company called Explore Technologies, was there for a long time. We did software in payments. Yeah. Took that, took me overseas. I came back to New Zealand in 2023, joined Trade Me as I said, and then joined halter a year ago.
Um, so for those who don't know about halter.
00:03:45.530 — 00:03:45.730 · Speaker 1
Yeah.
00:03:45.730 — 00:04:13.410 · Speaker 3
Let's do it. Um, or in agriculture technology business, we put smart collars on cows and that technologically enables the farms. So the smart collars that are are GPS and satellite now satellite enabled, um, connect through to a smart application which allows farmers to do virtual fencing, um, remote animal management and pasture management and creates a lot of value for farmers.
Our mission is to drive a significant increase in productivity and sustainability in agriculture globally.
00:04:13.410 — 00:04:44.930 · Speaker 1
And I guess I have to declare I'm a I'm a very small, fortunately, a very small shareholder and halter through Icehouse Ventures. I just need to get that out before we start talking about the halter. So technically, I guess I you answer to me, I guess there's a shareholder, so we'll just we'll weave that through there.
But in all seriousness, I, you know, so you've been a you're a technology CFO, right? I guess is there. So and I heard, you know, halter had one of the best, uh, tents down at field days giving away blunt umbrellas. Maybe I saw on LinkedIn.
00:04:44.970 — 00:04:45.450 · Speaker 3
Yeah, that's.
00:04:45.450 — 00:04:45.970 · Speaker 1
Right.
00:04:46.010 — 00:04:49.330 · Speaker 3
I got umbrellas for our customers. Thank you for your support as an investor.
00:04:49.330 — 00:05:02.719 · Speaker 1
Okay. Thank you, thank you. Okay. And so, I guess, is it just before we get into kind of what the content of the report is saying is that is there I guess a quick question. Is there anything unique about being a tick technology based CFO versus
00:05:04.080 — 00:05:06.680 · Speaker 1
quote unquote everyday or regular?
00:05:06.840 — 00:05:31.920 · Speaker 3
Yeah. That's fair. I mean, I think as you start to focus on an industry, you do gain a certain amount of skill set around the technical side and the strategy side of what makes those businesses work really well. Um, in New Zealand, you don't often have the opportunity to specialise in an area. Um, you have to be a generalist because the economy's not big enough to cater to specialists.
But I've been fortunate to sort of follow a thread and serve me pretty well so far.
00:05:31.960 — 00:05:56.840 · Speaker 1
Yeah, I guess that's why you end up somewhere as exciting as holiday. Let's start with the big picture. I guess what you know, as generic as this question is, what stands out to you most in the 26 report? I was when, as I was preparing for this, I we used survive until 25. You'll probably hate these and then I'm not sure if we use.
But I came up with persist until 26. Is it wait for heaven in 27?
00:05:57.360 — 00:05:59.150 · Speaker 2
I think we need to put a stop to the.
00:05:59.190 — 00:06:05.310 · Speaker 1
Okay. Okay, I should stop it. Okay. All right. But but is it. Are we looking forward to the year here or is there green shoots now?
00:06:05.350 — 00:07:11.220 · Speaker 2
Well, look, there's the report was really interesting this year, and and I guess it's given us a story of really sort of two directions at once. Um, so businesses are performing better now than they have since any part of the of the past three years. So more than half of CFOs, 57% met or exceeded their revenue targets.
And the number of CFOs reporting decline has actually dropped back to 17%. So the strongest result we've seen in three years, which is fantastic. But at the same time, the view of the world outside has actually darkened really deeply. So the proportion of CFOs expecting the global economy to decline has doubled since last year, from 21% to 45%.
So for for me, what that tells us is that actually it's a good thing for the New Zealand businesses. Um, we're getting on with it. We're resilient, um, resilient to whatever's thrown at us because, you know, the the amount of change and the rate of change is, is, is very fast. So I think we're probably doing better than I expected and maybe more than what the mainstream media has sort of led us to believe.
00:07:11.500 — 00:07:38.940 · Speaker 1
But I guess that's like we often talk about, um, you know, everything's cool in my house, you know, and I'm feeling okay, but outside or the sky is falling and affecting consumer confidence. We're actually if every if the, if the average respondent is saying things are picking up I guess is that represented.
You know, I guess is that representative of how you're thinking about things about holder or Holder as a unique situation, or do you think those are sort of, you know, accurately reflect the landscape at the moment?
00:07:38.980 — 00:08:12.010 · Speaker 3
Yeah, I think it's important to extract yourself from your own house and take more broadly. I agree with that. I took, yeah, some positive vibes from this report. It was it was good to see people feeling like they've achieved or exceeded expectations. I think we'll cover that a bit today. Um, and I, I feel like my live read, looking at the report and being been down to field days actually last week is that we might have found the bottom and we might be starting to see a recovery.
Um, agriculture is obviously very strong field days. As a sample of that. But down there on Friday and Saturday, family day at field days, it was heaving.
00:08:12.050 — 00:08:13.010 · Speaker 1
And so I've heard.
00:08:13.050 — 00:08:53.410 · Speaker 3
I hope people were spending money. And that's got to be a good shot in the arm. I mean the recovery has got to start somewhere, right? Yeah. Uh, to your point around the contrast between how we're feeling at home and globally, I think that's fair as well. Like people, a lot of New Zealand depends on what happens internationally.
A lot of uncertainty out there over the last couple of years, but equally like some pretty positive signs with the capital being deployed. And there's, you know, an IPO last week and there'll be a few others on the horizon I think. So it's interesting to see all of those things come together and give us some hope, but probably a little bit of caution.
Some of the moving parts, I think if anything's going to scupper a recovery, recovery at home, it'll be something that comes from global pressure. Yeah, yeah.
00:08:53.450 — 00:08:55.210 · Speaker 1
So we had one I guess earlier in the year with.
00:08:55.250 — 00:09:23.120 · Speaker 2
Yeah, yeah. And I think for me, part of what I want this survey to do is actually to, to help, um, change the narrative a little bit because I think we do talk ourselves down a little bit here. And, and actually, the statistically 57% of businesses are meeting or exceeding revenue targets. That's a good chunk of the market.
And, um, and I think we can change the narrative to just have a slightly more positive spin on things. And overall, the survey did feel positive. And most of the findings, which is great.
00:09:23.360 — 00:09:34.480 · Speaker 1
I want to I want to ask you, Scott, what's changed the most for you kind of over the last ten months. But before you go to, I'll say your other home regularly, who's who's better at talking themselves down the poms or the Kiwis.
00:09:34.520 — 00:10:26.870 · Speaker 2
Yeah. So I've just I've just been in the UK, um, last month. We go over there every year to, to network with Kiwi expats actually. And I think what we found this year was, um, the UK economy is faring no better than what the New Zealand one is. I feel like the social and political unrest over there is starting to have an effect on people.
Um, whereas New Zealand we are. Yes, we're affected by sort of the geopolitical landscape outside of New Zealand, but actually it's still home. So we're seeing a lot of Kiwis wanting to come home now. Probably the most that we've seen since we started doing that trip back in 2019. And and that is actually fantastic for the prosperity of New Zealand businesses getting talented who are Kiwis who want to come home, who've got great experience overseas, just like Scott did back in the day.
And, and and that can only be good for us. But it's our job now to to to create the opportunities for them and find them really great roles with great businesses.
00:10:26.910 — 00:10:43.710 · Speaker 1
And I guess to that question, Scott, for you, obviously you've been with Holter for 12 months, but so that's a major change for you I guess personally. But what is what is it? Is there anything that's changed lots for you as a CFO over the last 12 months, apart from the different like operating context?
00:10:43.750 — 00:11:08.190 · Speaker 3
It sounds pretty cliche, but AI is having such an impact on all of business, but in particular, the way finance teams think about how they want to configure the team and operate the function. Um, I think it's, you know, it's part of every day now. I think we've we've been pretty deep in an experimentation phase.
I think we're starting to pivot to work out how to apply AI to be highly productive.
00:11:08.230 — 00:11:12.830 · Speaker 1
Just to you, that's broader than just the finance team. That's the business.
00:11:13.670 — 00:12:08.940 · Speaker 3
It's it's the business which includes the finance team. I'm thinking about this every day in terms of finance. Yes. As a business, every leader in our business is thinking about in terms of their function to both in terms of internal productivity and the way to create value for customers with AI. Yeah.
The space is just moving so quickly. It's quite unbelievable. When you look back at how you were thinking about this 12 months ago and how I think about it now. Yeah. And I'm excited about how I might think about it in 12 months from now. Um, so I think that's a big part of what's changed. Like really quick, I think the talent one, it's great to hear there's some talent wanting to come home from overseas because it's not necessarily changing.
I just feel like it's probably continuing to evolve in a more challenging way. is finding good talent. I don't think there's as many accountants coming into my trade. Right. And you know how people think about AI might influence that as well. But I think there's a lot of fun to be had in accounting and finance.
So come on in. Come home from the UK.
00:12:08.980 — 00:12:10.500 · Speaker 2
Absolutely. Yeah. Let's get them into halter.
00:12:10.540 — 00:12:38.780 · Speaker 1
So so I guess you li one of the clearest themes in the report that you, you found according to this was that, you know, leaders in finance are still focusing on the basics. But what Scott's just said is there's potentially also some things that are not the basics and are net new, I guess. Is it still the same things as always to keep focussed on, or is it chasing these new opportunities?
That's kind of driving the main focus, I guess. Defensive and basics or aggressive in your opportunities.
00:12:38.820 — 00:13:43.570 · Speaker 2
Yeah. Look, I think, I think it's it's not necessarily a defensive position that we find ourselves in. So the cost of doing business came through really strongly in the report. The cost of doing business is is a dominant theme this year, and everyone's feeling that the rising cost pressures are now cited by 3 or 4 CFOs, and that's up from 56% last year.
So it's a it's a big deal. And so protecting cash and defending margins is front of mind for every business and every CFO. But there's a little bit more in the survey there which says it's actually not just about that. Um, see, if we asked for the first time where CFOs are investing, that's where the AI thing comes in.
Um, so we asked, um, where they're putting the money and they are investing firstly in growth or improving revenue. Secondly, in technology and then in AI in that order. So, so what we've seen is that businesses, um, they're not hunkering down. And if businesses are looking to, to to come through these uncertain times, they do so by investing in their business and getting sharper and but really focus on where every dollar goes and, and technology and they are absolutely central to that.
00:13:43.610 — 00:14:01.960 · Speaker 1
And I guess, you know, to you, Scott, with as much as you can, you know, divulge or give away. How did how was Holter and its CFO balancing kind of that growth versus, I guess, uh, you know, discipline at the moment. Is there sort of a magic, you know, ratio or anything?
00:14:02.000 — 00:14:34.520 · Speaker 3
No, there's no magic. It's the same old ratios, right? Let's be clear. Like I think at the moment, um, where you're with this capital available and you've got opportunity, you need to do the right equations to work out how you lean in on that. I'd say in a Holter context, um, there's this interesting convergence in agriculture technology now where over the last five years, I think the hardware, the software, the connectivity is converging to layer foundation to create lots of value in agriculture.
And so from a holder perspective, I think there's an opportunity to lean in and invest and invest well.
00:14:34.640 — 00:14:47.720 · Speaker 1
And it's exciting. And I get you say that as the technology caught up with your ambition a little bit, or is the technology enabling you to rethink about things that you never even thought of?
00:14:47.720 — 00:14:59.430 · Speaker 3
I think there's a nice dance between the two. Like, yeah, technology extends your ambition, right. And it kind of some of that is meeting what you dreamed of, if you like. Yeah. Yeah. Um, like, for example, the satellite connectivity.
00:14:59.470 — 00:14:59.950 · Speaker 1
Yes.
00:14:59.990 — 00:16:05.140 · Speaker 3
By nature unlocks a lot of agriculture, where till now there has not been coverage. Yeah. Um, so it's those types of features coming through improvements in hardware. Agriculture is a hugely rugged environment. Yeah. You need really rugged hardware to survive there. And so those types of technologies are advancing.
So again, I'm talking from a kind of halter context, which is one. And that's how we think about it I'd say when we think about the wider economy, um, and the recovery we're seeing, some industries will be pacing ahead and leading that recovery. There'll be other parts of the economy and industries that would still be working out how their business will rise to investment needs.
And yes, I think that business is thinking about is AI an opportunity or a risk to my business is a pretty relevant consideration when you're thinking about leaning in. I'd say 12 months ago people were hugely worried about the SaaS software market, and I think it's more nuanced than that. I think the whole market got tarnished with a brush, but I think people are getting more educated and saying, well, some of this is at risk.
Are the parts.
00:16:05.180 — 00:16:05.780 · Speaker 1
Discerning?
00:16:05.820 — 00:16:17.180 · Speaker 3
Yep. Yeah. And so CFOs thinking about how can I leverage AI as an opportunity and what's moving forward here quickly as opposed to a risk is going to be pretty important working out where to invest.
00:16:17.380 — 00:16:25.580 · Speaker 1
So I get to take it back to the survey. Was there one killer kind of AI, you know, insight that you sort of keep coming back to as such?
00:16:25.740 — 00:16:47.860 · Speaker 2
Yeah. Look, one of the most interesting findings in the whole report really was, was in the AI story. So, um, the data is pretty clear on where AI is currently having an impact for CFOs and their finance teams. So outside of the obvious admin users, um, the top, the top applications where data analysis and performance insights, strategic planning support and then financial forecasting.
00:16:47.900 — 00:16:48.100 · Speaker 1
Makes.
00:16:48.100 — 00:17:06.180 · Speaker 2
Sense. So so we've seen that shift from previous report. And now it is actually having a big impact on finance teams being able to make faster and better decisions and actually being used to being used to support that. And 94% of CFOs actually see AI as a positive force. So they're embracing the AI journey, which is fantastic.
00:17:06.260 — 00:17:07.500 · Speaker 1
About risk and opportunities thing.
00:17:07.540 — 00:17:56.970 · Speaker 2
Yeah, absolutely. So but but I think, um, you know, last year we said we were on the verge of mainstream adoption. To your point, Scott. We we now see three and four businesses have adopted AI right across multiple functions, but 50% are still exploring where those significant changes are going to have an impact.
So for me, when you've got a period where you're going through sort of cost inflation and pressures on on what you're spending and you've got the, the carrot being dangled in front of you around what AI could do. I feel a fear, I guess, that people are making decisions on AI with cost pressures in, in sort of getting cores in the crosshairs.
So I want to make sure that businesses are understanding what the strategic opportunities are with the AI, rather than that being an accelerate because we think we can get some efficiencies. Yeah, we're not doing it correctly.
00:17:57.210 — 00:18:23.650 · Speaker 1
Yeah. Both sides of the ledger. Yeah. Scott, you know, if we look about I wouldn't say AI is causing volatility as such. But it's a big change as such. And the years also delivered. Last 12 months delivered some major volatility. And once there's no volatility in volatility anymore it's here consistently.
You know in practice I guess how have you managed as a CFO to navigate a middle East conflict. Everything get AI is going on. How do how do you do that.
00:18:23.690 — 00:18:26.850 · Speaker 3
Well it results in juggling a lot of balls.
00:18:26.890 — 00:18:27.330 · Speaker 1
Yeah.
00:18:27.410 — 00:19:31.880 · Speaker 3
Yeah. Um, and both of those things are real for me. Like, the AI thing is a big question and and I'll talk about that in the other one is we have quite a big supply chain at halter and well, we don't have anything going on in the Middle East. For example, a lot of our supply chain sourced out of Asia is affected by, um, what's going on in the Middle East.
Um, but yeah. So, like, you've just got to work through systematically understanding the opportunities and risks to easily phrase from before and and work out the best way to get to the outcome you want. The AI piece. Um, I think we're at the stage where we've done the experimentation, and now we're starting to experiment with scaling it.
And then I think, and I'm, I'm still in that phase of working out how you scale this to create the productivity outcomes that may lead to the ability to reduce cost in some areas, or spend more in other areas by focusing on things that have higher impact and value. So that's like my thinking on where the stage is at.
And I think in 12 months time, we might be getting close to feeling like we're creating real value with AI.
00:19:32.040 — 00:19:49.880 · Speaker 1
But that sounds like you've kind of, um, and it might be because you're in a, you know, from that tech background and you can think through those things and you're more learned in that area, but as opposed you've gone to live on. How do I utilise and use it to drive growth versus just the initial impact on my business?
So I guess that's not every CFO or
00:19:50.950 — 00:20:01.510 · Speaker 1
Smaller business. Business doesn't ever CFO, but they're all in one. They're probably a little bit behind that. Are there any words of wisdom you'd give them in terms of like if you just leant in and embraced it?
00:20:01.950 — 00:20:12.470 · Speaker 3
Yeah, I think I would encourage everyone to really roll out every CFO. Yes. To roll up their sleeves and get their hands dirty trying to build agents, for example, and seeing how they work.
00:20:12.470 — 00:20:20.990 · Speaker 1
So not just using Jim and I when I'm searching for what is my dog eating, which I did the other day, and what? Yeah. Actually building and using agents, going that far.
00:20:21.030 — 00:20:31.830 · Speaker 3
It's the best way to learn. Just do it and see how they perform. Then start imagining how you can perform that concept to, you know, scale a task to be productive. Yeah.
00:20:32.110 — 00:20:34.710 · Speaker 1
And be vulnerable and not know what you're doing and just try it.
00:20:34.750 — 00:21:21.180 · Speaker 3
Equally like I feel like maybe some of the stuff we're doing is on an edge of we are more willing to experiment, and maybe we're on leading that a little bit. Um, I'd say in general, I'm finding This is still quite hard when you try and scale it. It sometimes goes slower than you expect. It costs you more money than you expect, and some of the outcomes are not as consistent as you expect.
And so then you kind of get a bit bearish or not. Jesus. That's going to create the value I thought. Yeah. But I feel like I will break ice on learning about that. And then I will share how it's worked with me with other CFOs. And you know, it's not just about what I'm doing. I think that'll happen across the market.
You people will be able to learn from how other people are experimenting and catch up quite quickly.
00:21:21.220 — 00:21:31.460 · Speaker 1
I mean, that's just before, you know, that sounds like most technological paradigm shifts, but maybe we're now just because it's AI, we expect it to work from day one.
00:21:31.660 — 00:21:43.340 · Speaker 2
Yeah. Just to build on what Scott just said there, I think one of the things that came through in the survey is only only 1 in 5 are expecting structural changes to happen within their teams, so changing the size and structure of their teams.
00:21:43.380 — 00:21:45.020 · Speaker 1
Because AI, AI because.
00:21:45.020 — 00:21:45.140 · Speaker 2
Of.
00:21:45.380 — 00:21:46.540 · Speaker 1
Or just because of the current.
00:21:46.580 — 00:22:23.850 · Speaker 2
Because of AI, specifically because of AI. My encouragement to build on top of Scott's advice, which is fantastic, is to to not. To not change the size and scale of your teams too quickly. It's a little bit like when you've got a budget, you use it or you lose it. It's a bit of a sinking lead. If you start to change the structure of your teams now, before you've got a genuine AI strategy, you know it's going to work and it's sustainable, and you might change the rolls or your haircut might go down.
You'll lose that ability moving forward. For me, it's got to enable things to be going faster and better, not just to save money on headcount. So I think that structural change has got to be something CFOs are going to be cautious about.
00:22:23.890 — 00:22:42.810 · Speaker 1
And I guess, you know, the average person and probably a finance team will be running it 95%. You know, like I'm sure their workload score on staff services. I'm at I'm at peak. So you know they're not they're not there's not spare capacity already. And hopefully you just want to augment that capacity with extra tools.
Right.
00:22:42.850 — 00:22:54.200 · Speaker 3
It's almost the hardest. Sorry if I just jump in there. That's almost the hardest thing to get over, is your team will actually tell you they're at 120% capacity. Yeah, and they've got no time to experiment. So you need to create the space to experiment as well.
00:22:54.240 — 00:22:54.360 · Speaker 1
Yeah.
00:22:54.360 — 00:23:02.440 · Speaker 3
Great. Then you find if you don't commit to building something and it just becomes the edge of someone's day job. It never happens. Know. It's so inefficient.
00:23:02.480 — 00:23:05.880 · Speaker 1
And then it gets better and then it gets badged with AI. Doesn't work. Yeah, exactly.
00:23:05.920 — 00:23:41.760 · Speaker 2
But you are right, Nigel. We saw. I mean, I've been around for long enough to have been through the GFC back in 2008, 2009. Finance functions really strong down. We went through a period in New Zealand where a lot of the big, the big consulting firms were coming through and agile came in. And there is there are very few businesses in New Zealand that have capacity to do this work and this experimentation.
So that's my point around sort of the advice of CFOs is don't let your headcount and your cost pressures start to affect the decisions that you're making. If anything, you need to create that capacity, and you're not going to do that with less people.
00:23:41.800 — 00:24:06.760 · Speaker 1
Okay. So succession planning is another standard issue. I'm sure we've talked about this every year. I mean, I'm, you know, no one ever wants to think about replacing themselves, but I guess how. How do you. We've talked about AI and building that capability, but is there anything that's been surfaced up in the last couple of years quickly, you know, in terms of that you're doing differently now about building that capability in your team to one day replace you?
That, I guess, and whether or not technology's change that.
00:24:06.800 — 00:25:29.870 · Speaker 3
The term succession planning, um, like I've never actually experienced in my career, a scenario where you've got a successor sitting there. I think that's a luxury. And yeah, like you don't never have a capacity to invest in that. So I'm very focussed on building a team of people that collectively can do everything our team needs to do and allow me to focus on what's high impact in terms of building the team and thinking about how, you know, set up a team that's, you know, configured for the right way that finance should be in the future.
I've always thought about finance teams in three parts. You've got your finance and accounting core capability. Then you've got your business partnership, financial planning, get out there strategic partnership to the business and do really good capital allocation. Yeah, I think the third part is technology.
I am definitely starting to index and investing in technology resource in our finance team. And that's kind of the combination of how can systems that we use, plus the AI tools overlaying it, set this team up to scale and create an even bigger impact. Now there are parts of finance and accounting that by nature are very programmable.
They're like it's pattern recognition like. So AI will be able to do that. I don't think it's going to take any resource out of my team. I just think we'll get better at it better. And if you're able to add more value in other parts of the business, but it's that investment and the third part of my team technology capability.
Yeah. Which will unlock that opportunity.
00:25:29.910 — 00:25:37.510 · Speaker 1
And that's through the through the survey. Or is there a key, a consistent thematic or is that is Scott way ahead of his time? I just got.
00:25:37.750 — 00:26:59.810 · Speaker 2
Probably a little bit ahead of his time. But look, the succession, we came up with the headline last year that succession planning was a strategic blind spot for businesses. And I and I believe that to be quite a structural, deep rooted problem rather than just a passing one. So only 1 in 5 CFOs this year are confident that their business is ready for leadership transition.
And that's the same number that it was last year. Um, but if you sort of go back to AI again, if you overlay that with another stat that came out. So 60% of CFOs have believed that the shift and the junior roles in their team driven by AI, will hurt the quality of their future finance leaders. That compounds the issue of succession planning.
So actually, we're now worried that we won't have the actual talent and skill sets coming through because of the way finance functions are changing and evolving over time, specifically because of AI. So it's actually quite a big issue for me, and a lot of the CFOs really need to be thinking about the makeup of their team and the skill sets that are coming through.
Um, and, you know, at the lands side of things, we've got our future CFO and future future finance leaders programs that we that we drive and and that really needs to be a big focus for what you have in your team, what the skill sets are, and trying to foresee what the skill sets are going to be needed in the next 12 or 25 months.
00:26:59.850 — 00:27:19.570 · Speaker 1
So as you step back, I guess, you know, we haven't even got to a range of topics we're going to get to today. And I'll leave that for you to check out on the report. Um, but if you step back, what do you think the best CFOs, you know are doing particularly well right now? And you'd see, I guess it's not just in terms of how you've conducted the report, but your day to day work with with candidates and businesses.
00:27:19.610 — 00:28:32.920 · Speaker 2
Yeah. Look, we're really privileged to work with some of the New Zealand's best CFOs every day. Uh, if I take a step back, I think CFOs are doing three things really well right now. So firstly, they've made peace with the uncertainty. There's no there's not as much talk of of pre-COVID recovery anymore.
Um, we're not waiting for clear skies and a great environment to be doing things. So I think great CFOs now are making calls without perfect scenarios or information available. Secondly, I think they are both defending their businesses and their margins in a in a tough world because of of cost pressures.
But they're also investing at the same time. So trying to make sure that they've got discipline without losing a growth mindset. And then I think the third one and this came through in the survey and it surprised me a little bit. But CFO role satisfaction actually comes down to support as much as it does fiscal set.
So board support is the single biggest driver of CFO role satisfaction in the whole report. So if you've if you ask me you've kind of got the CFOs pairing, you know, kind of the real commercial discipline and the strong relationships with the board, the balance between making good decisions and and putting good controls in, which is good discipline.
They're the ones that, for me are the standout CFOs in the market at the moment.
00:28:32.960 — 00:28:58.350 · Speaker 1
I mean and looking I guess I look to you, Scott, it makes sense, right? Like if you're not, if you don't feel the support of your boss or whoever's the everyone's boss, everyone has a boss. And maybe you're only focussed on how do I get through or get this business through versus investing. That would be like a less fun environment, I guess.
But if you're looking, what is the next 12 months, I guess a head look like for you as a CFO to be a successful period?
00:28:58.350 — 00:29:42.550 · Speaker 3
Yeah. For me, one of the core things that I see is a measure of the success of my years is, is when we plan. Well, yeah, you touched on it before, um, when you plan and kind of predict your future, well, it puts you in a position to make better decisions way earlier. Yeah. And the benefit from that compounds. That's one of the hardest things to get right.
It's also the biggest, highest value and highest leverage part of a CFO. Remember to get right is planning ahead. So successful year for me. We'll be having good visibility into what the future looks like to make good decisions, and then building a team to scale with the growth of the business, high capacity, high capability, highly engaged and, you know, fired up about the mission that we're on.
But I get those two things together. I think I'll help set up my team to support the business, to keep growing.
00:29:42.590 — 00:29:53.180 · Speaker 1
And I guess then you as well, if you're if you can if you were getting as close to predicting the future as possible. You earn the trust of those above you, right as well. And that makes your life easier than when you go and ask next time for something.
00:29:53.540 — 00:30:25.740 · Speaker 3
Yeah. And that point around support like it's true, you're often the person who's bringing the bringing the view on the future, talking about the risks you're that your role is to sort of adjudicate the risk and temper. Yes. Ambition within a reality. And so you often you feel a little bit like the contrarian voice.
Yeah. Or just the sense check on certain ambition. And you need to hold respect and ground in that space. Otherwise you do fall out of support. And that's an uncomfortable feeling. So knowing supported it kind of gives you the confidence to do your job. Well.
00:30:25.780 — 00:30:42.340 · Speaker 1
Yeah. Which is to be that. Yeah I guess that that other exec on the shoulder I guess the final question and we'll go to you leave first. Then I kept doing that for a while. I was just thinking, still, who who am I to people on my shoulders to our usual one, a reading, listening to a watching recommendation that you can share.
00:30:42.380 — 00:30:48.340 · Speaker 2
I'll be honest, if I was to answer the reading question, it would just be to say that I've been reading thousands of data points in the middle of this.
00:30:48.420 — 00:30:50.380 · Speaker 1
Oh, gosh, you're so dialled in.
00:30:50.540 — 00:31:00.580 · Speaker 2
Um, but I also wouldn't have to feed into the sort of stereotype I am English and the football World Cup is on, so what I've been watching is as much football as possible. Oh, yeah. England won this morning, so.
00:31:00.620 — 00:31:07.060 · Speaker 1
Well, that was, uh, I guess, um, I look forward to seeing them fail in a penalty shootout.
00:31:07.740 — 00:31:10.100 · Speaker 2
Yeah, give it about two weeks. My message will be different.
00:31:10.460 — 00:31:21.940 · Speaker 1
No, I want England to. I always want anything to do with all Kiwis. I'm sure the heart of the England rugby is different to England football. I think there's always like a Kiwi. Little interest in English football. But English rugby for some reason, we just don't like.
00:31:21.980 — 00:31:23.020 · Speaker 3
Well, in.
00:31:23.020 — 00:31:32.100 · Speaker 2
The UK there's, it's a bit of a class divide. You know, you're working class, you're into football and and you're upper class and you're into rugby. And that's a very different story. New Zealand it is. I love.
00:31:32.100 — 00:31:35.020 · Speaker 1
Both. Yeah. And so what was your recommendation Scott.
00:31:35.220 — 00:31:48.050 · Speaker 3
So this was not planned but it's okay. Probably not a coincidence either. But uh, mine was around. I watched a really cool documentary recently on Netflix in the Um UK untold series, which was on Jamie Vardy.
00:31:48.290 — 00:31:50.370 · Speaker 1
Oh yes the Mr. City striker.
00:31:50.410 — 00:31:50.890 · Speaker 3
Yeah.
00:31:50.930 — 00:31:51.730 · Speaker 2
Leicester legend.
00:31:51.770 — 00:32:10.930 · Speaker 3
Yeah I'm a casual football fan. Do like the World Cup. Um, but it had me hooked like a really impressive story. And you know that miracle at Leicester? It was awesome. Um, I think it's the kind of documentary that would inspire a certain age group of, of children and young adults to to believe in what they can achieve.
00:32:10.970 — 00:32:14.970 · Speaker 1
Yeah. Yeah, absolutely. Do you think one day we'll get a Netflix documentary about CFOs?
00:32:15.570 — 00:32:16.410 · Speaker 3
100%.
00:32:16.810 — 00:33:26.920 · Speaker 1
Okay. All right. We know, we know when you get asked to make it. Yeah. Maybe you know someone to who can I. I've made you quite inspiring. So once again, thank you both for unpacking the report. It's good to have you always back here doing the report and you make a it's I think it's a wonderful service that you do to make the CFOs voice heard because as you're like as you're saying, maybe it's a of the two key roles.
Maybe it's not one that's heard as much publicly, but it is such a critical one, you know to be that since chick and, you know, a CFO and CEO are critical. So, um. Lee well done. And thanks for coming back, Scott, as well. So the report shows a finance community that remains resilient and pragmatic, so focussed on cash margins, adaptability and making thoughtful choices about where to invest for the future, particularly all things, as you've heard, AI related.
So as I said at the start, we hope this conversation has offered a few insights into what is on the minds of our key finance leaders like Scott. But you can also apply to your own business, no matter how small or big or your investment portfolio. So until next time, it's keep looking forward to 27. There you go, Lee.
But don't forget the decisions you need to make in 26. Happy investing and bye for now.
00:33:29.320 — 00:33:39.120 · Speaker 4
Thanks for listening to the ASB Investment Podcast. If you have any thoughts on this episode, or if there's anything you'd like us to discuss on a future show, get in touch with us at podcasts at ASB.