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WWW.CFOSTUDIO.COM
3rd Quarter 2012
g
lobal challenges from Europe
and China and volatility in the
economy overall have presented
plenty of di culties to nancial
executives. But by embracing the right
strategies, a CFO is able to mitigate
risk while positioning the company for
greater growth in the long run. David
Drillock, Vice President and CFO
of Woodland Park, NJ–based Cytec
Industries, a specialty chemicals and
materials manufacturer serving diverse
markets including aerospace, mining,
and general industrial, has worked to
ensure his company can thrive during a
time of economic uncertainty.
He sat down with Andrew Zezas, host of
CFO Studio
and CEO of Somerset, NJ–based Real Estate Strategies
Corporation, to discuss how the role of CFO has broad-
ened and deepened in recent years, and why an economic
downturn is no excuse to curtail innovative thinking. Below
are highlights from their conversation.
ANDREWZEZAS
Dave, it’s great to have you
here on CFO Studio.
DAVIDDRILLOCK:
It’s great to be here, Andy,
thank you.
Dave, we are talking about uncertain economics and also
about leadership, which are very important components of
business today. Share with me, om a global perspective,
what economic issues concern you.
DRILLOCK:
Sure, thank you. Everybody knows what’s
going on in Europe with the debt crisis and how they are
in a recession already. We can’t escape the news or radio
or TV talking about it. We also have a slowdown in China,
and while that economy was a great engine of the world for
many years, the impact of that downturn could lead to a
slowdown in this country.
So, those are the things that the CFO today should
Q A
be aware of, and quite frankly,
needs to make sure the company
is prepared to deal with in the
uncertain times ahead.
T
here is a lot of uncertainty,
and there’s a lot of diverging infor-
mation that’s going o in a lot of
di erent directions. A lot of very
smart people are trying to make
sense of it.
DRILLOCK:
Yes, that is
correct. Flexibility is the key.
What’s your company been doing to minimize
risk and reduce risk, but not depress growth?
DRILLOCK:
I think the rst thing a CFOneeds
to do is look at the balance sheet: Do they have proper
liquidity? working capital at the right levels? Also,
look at the infrastructure of the company. If there is a
downturn, look at the di erent scenarios and what can
be done. You want tomake sure that you have liquidity
to keep funding the things you want to do. And cut
back on the things that you know are sort of temporary
that don’t need to get done right away, and push them
o . So, I think through proper contingency planning
and some of the things like that, you canminimize risk
and also take into account what might happen to your
customers and vendors.
For instance: working capital management. I want
to know that my key vendors are viable nancially.
So, it doesn’t hurt to do some credit checks on them
like you would do with a good customer. e same
thing with my customers: I don’t want to be the
bank during a crisis. If I am shipping to them on time
and on schedule, then I want to make sure I am being
paid on time. Also, you want to make sure you are
building the right products, that you are not le ing
dollars sit in inventory, because that’s not doing
anybody any good.
By Alex Palmer
Interview by Andrew Zezas
LEADING
IN A PERIODOF ECONOMIC
UNCERTAINTY