22 May RP’s CFO, Nicholas DeSiato weighs in on how companies prepare for their biggest challenges
May 17, 2019
by Brian Bandell – Senior Reporter, South Florida Business Journal
The traditional view of a CFO is that of a number cruncher who analyzes past performance, but the modern CFO is more forward-thinking and helps companies tackle their biggest challenges.
Today, CFOs must understand how all company departments work and act as a sounding board for innovation. Increasingly, they have a seat at the C-Suite table as ideas are developed to ensure the financial strategy falls in line.
Before a department spends a lot of time and resources on a new venture, a CFO can evaluate whether the return on investment and the potential risks make it worth the effort.
Top CFOs from South Florida companies addressed these issues and more at a CFO Roundtable held May 3 at the Business Journal’s office in Miami. Moderated by Editorin-Chief Mel Meléndez, it is part of the Business Journal’s ongoing Roundtable Series, where CEOs, CFOs and HR directors shed light on salient topics of interest to our readers. The conversation was sponsored by MBAF and Randstad Professionals.
Those who think CFOs mostly deal with accounting and finance responsibilities have a distorted – and antiquated – picture of the modern-day chief financial officer’s role.
Today’s CFOs are key members of the leadership team overseeing and planning a company’s operations. And with that shift comes greater responsibility.
The CFO must bring a global view and ask the hard questions about business plans, said Rokk3r COO Carlos Escobar, who also handles financial responsibilities for the Miamibased incubator.
Formerly the head of several financial services companies in Miami, Escobar is helping Rokk3r transition to a public company. He’s deeply enmeshed in strategizing now, but it wasn’t always that way in his career.
“When I was in business school and interned for a finance job at Kraft Foods, I handled the [financial] reporting, and someone else made decisions based on information I provided,” Escobar said. “In the modern CFO role, you have a lot more input, and laying out that strategy from a financial role is more rewarding.”
CFO Roundtable panelists stressed the importance of meeting with all departments and getting involved in their strategy sessions – early. Often, the division heads aren’t as aware of how their performance impacts the company financially, so they could use a CFO in the room for guidance.
“When new programs are in development, I find myself brought in sooner, rather than later,” said Linda L. Wagner, CFO and VP for administrative affairs at Miami-based St. Thomas University. “Instead of being brought in on the back end, I find myself brought in during development.”
It’s also key that a CFO be seen as part of the team, not an overseer, she added. Mitigating risk is also a crucial part of that equation, said Filip G. Feller, CFO and executive VP of Coral Gables-based Marquis Bank, as CFOs must determine if the potential benefits of the program are worth the potential risks, he added.
The executives often have to walk a delicate line between fostering creativity and weighing a project’s financial viability, Telemundo Networks CFO Amanda Calpin said. She sets budgets for shows, sports and event broadcasting rights, and news coverage, but it largely depends on ad revenue to justify those costs.
“The ideas the creative team has for creating great content are amazing,” Calpin said. “But what is the cost benefit? How will we monetize the return?”
Finding and retaining talent to fuel a company’s growth is another challenging job for a CFO.
Todd R. Deller, CFO of Miami-based Coastal Construction Services Group, said the gap between job openings and available skilled workers continues to widen. Construction companies must account for the current labor shortage in their budgets, as salaries might rise, and when deciding how many projects they can take on, he said.
As the construction workforce ages, Coastal and other contractors must attract more millennials into the field, Deller said. A CFO can help guide that strategy.
The best way to mitigate labor challenges is to reduce turnover, said Randy Pianin, CFO and COO of Pompano Beach-based JAE Restaurant Group, which owns 231 Wendy’s restaurants in four states. “We measure compensation and benefits at our competitors, but creating an environment where people want to work is critical when hiring and retaining them,” Pianin said.
Challenges for companies go beyond financials An effective CFO has a finger on the pulse of the company, and should be the first executive to recognize upcoming challenges – financial or otherwise.
Challenges can take many forms – a global recession, shifting consumer habits, cyberattacks – and companies can encounter many obstacles.
But key to the CFO role is ensuring the executive team recognizes critical issues early and has a strategy in place to emerge successful on the other side.
For example, how restaurant customers now prefer to place orders has had a big impact on the industry, said Randy Pianin, CFO and COO of JAE Restaurant Group.
Many younger consumers would rather order from a kiosk than a person. But that technology requires a significant capital investment, so a CFO must evaluate the cost benefits, he added.
“Customer expectation is so different now. Consumers aren’t used to a long process,” Rokk3r COO Carlos Escobar said. “You need to watch how that will change your business.”
Whether ordering hamburgers or signing a mortgage, customers have access to more information than ever. Window shopping for prices is a thing of the past. Consumers can whip out their phones and search for the best offer right up until the moment of purchase.
That instant access to information has created challenges for banks, said Filip G. Feller, CFO and executive VP of Coral Gables-based Marquis Bank. Clients securing home mortgages have several days until the loans close, which gives them time to watch how interest rates are changing, view offers from other lenders and reprice the loan, should they choose to, he said.
“Technology is speeding things up, so banks must adapt to it,” Feller said.
But speeding up a loan approval can be difficult due to regulations that require more documentation during the mortgage process, he added.
Adapting to new laws and regulations is crucial for companies to capitalize on opportunities.
Stephen Hodes, CFO of Coral Gables-based hotel developer Driftwood Acquisitions & Development, said he’s paying close attention to the Opportunity Zone program established by the federal Tax Cuts and Jobs Act of 2017. This allows groups to defer capital gains when investing in certain areas that are economically disadvantaged. Hodes said Driftwood recently acquired a mostly vacant office building in an Opportunity Zone in Wilmington, Delaware, with plans to convert it into a hotel. It’s also creating an investment fund that will seek Opportunity Zone projects to build profitable developments.
At the end of the day, its about CFOs planning for the future.
“That’s a huge part of what we do,” said Rick Shaw, CFO of Miramar-based Tropical Financial Credit Union. “There are different aspects of accounting rules that are changing, and we must look years ahead and plan for changes.”
CFOs moving up in the C-Suite
As CFOs become more involved in their companies’ operations, they become better CEO candidates.
Besides a nice boost in pay, that top post provides a wide range of responsibilities and more face time representing the company. Given how frequently CFOs are now used as featured speakers on public companies’ investor conference calls, more CFOs are gaining valuable experience in the public eye.
Still, it takes more than confident speaking skills to be a CEO.
To become CEO, a CFO needs to demonstrate an ability as “a rainmaker, or someone who finds opportunities and draws new business,” said Nicholas DeSiato, CFO of Boca Raton-based developer Rosemurgy Properties.
“I interact with outside consultants, but I’m not necessarily finding new business, and that is a critical role of the CEO,” he said.
It’s not enough to strategize behind the scenes and work the numbers if you aspire to be CEO, the panelists said. Corporate leaders must understand their markets and take the initiative.
Randy Pianin joined JAE Restaurant Group three years ago as CFO and is adding COO to his duties. He quickly realized that it’s not sufficient to control costs and act as a financial enforcer. When working on the operational side, an executive must develop key relationships and find ways to grow the business.
“Sometimes, finance people like to analyze and want a lot of data to look at everything before making a decision,” Pianin said. “When you move beyond the finance role, you must be comfortable making a decision without all the data, and that can be scary sometimes.”
Rokk3r COO Carlos Escobar, who also handles financial reporting, said a CEO often comes from the sales side of a company and works to inspire employees and investors. So if a CFO aspires to reach the top job, they must become a stronger voice for the company.
Telemundo Networks CFO Amanda Calpin said executives must have operational experience, or at least a deep understanding of how operations work, before becoming a CEO.
But once you reach the top, you have to remember that not even the best executives can succeed on their own.
“You need to have a great team, know enough about areas you manage, and understand that you won’t be an expert in all areas,” said Linda L. Wagner, CFO and VP for administrative affairs at Miami-based St. Thomas University. “But you can’t have weak links on your team.”
What’s been the most valuable lesson for you as CFO?
To have frequent and open dialogue with your key stakeholders. – Randy Pianin
The need to be flexible. When you go into work every day, it will never go as planned. – Linda L. Wagner
Be prepared for each day, and be nimble enough to adjust and react. – Todd R. Deller
Listen to the operators in the business and trust their expertise in business. – Amanda Calpin
What aspect of the CFO role truly surprised you?
One of the co-presidents said: “You are the conservative voice to our entrepreneurism.” – Todd R. Deller
How broad the responsibilities are. – Amanda Calpin
How much the board and management team truly need the CFO’s touch, and how much you are looked at to be the person who has their hand on the rudder of the ship. – Filip G. Feller
How encompassing it was and how I needed to be in touch and aware of everything going on with the company. – Carlos Escobar
What’s the most rewarding aspect of being part of the C-Suite team? Taking a project from an accounting standpoint and seeing it turn into a building and how it impacts the community. – Nicholas DeSiato
The ability to mentor the people I work with to have roles that give them satisfaction in their careers. – Filip G. Feller
Being able to participate in setting the direction of the company. – Carlos Escobar
That everyone on the team has each other’s backs and works for the greater good of the institution, rather than building their individual resumes. – Linda L. Wagner
About Rosemurgy Properties
Rosemurgy Properties, headquartered in Boca Raton, Florida, is a privately owned commercial real estate development, investment and management firm with more than 40 years of experience in the industry. The company maintains a diversified portfolio over several asset classes which include multifamily, self-storage, retail and office. Rosemurgy Properties has developed and acquired over 2 million square feet of commercial real estate in the past 15 years in various partnerships. A developer that has been at the forefront of trends in their respective markets, Rosemurgy Properties is involved with a number of notable projects such as Uptown Boca, the Florida Atlantic University Research Park and Innovation Centre, as well as University Park, the first purpose-built student housing development in Palm Beach County. The company, which includes general contracting, property management and asset management services, owns commercial properties throughout Florida and the Carolinas. For more information, please visit www.rosemurgyproperties.com.
About Nicholas Desiato
Nic DeSiato is the Chief Financial Officer for Rosemurgy Properties. He has more than 17 years of experience in accounting and real estate finance, and is a previously licensed CPA in the State of Florida. As CFO of Rosemurgy Properties, Mr. DeSiato is responsible for all financial reporting, accounting, tax and budgeting areas. During his ten years with the company, he has overseen the acquisition, disposition and financing of real estate assets in excess $400 million. He is also the CFO for Park Partners Residential. PPR offers a variety of services encompassing development, acquisition, and property management for apartment communities throughout Florida. Prior to these roles he was a Senior Tax Accountant for Crowe Horwath, Fort Lauderdale and at Hein and Associates, Denver. Mr. DeSiato has been an active member of Vistage Florida for over five years. He has a Bachelor of Science degree in Accounting and Finance from Florida State University, and resides in Boca Raton with his family.
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