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B arry Lederman, CFO of Woodcliff Lake, NJ–based Eisai Inc., leads the pharmaceutical company’s financial operations in the Americas. He took on the role at this subsidiary of Eisai Co., Ltd. last June, after serving as the top finance executive at Wedgewood Pharmacy for three years, and at Nycomed prior to that. His experience also includes positions at IBM, General Motors, and PricewaterhouseCoopers. Lederman spoke with Andrew Zezas, publisher of CFO Studio magazine and host of CFO Studio On-Camera. n (ANDREWZEZAS) Let’s start with the question: What is value creation? BARRY LEDERMAN: Well, rather simply, it is having your revenue growth exceed your expense growth. I am sure you’ve heard the saying, “Cash is king.” It’s just this idea over time — if you are generating cash and cash flows, and growing it over the long term, that’s what value creation is fundamentally about. n Who should be driving value creation? LEDERMAN: In companies mid-sized, large, or small — it doesn’t matter, the CFO should be at the helm of this [and] involved across all aspects. That vantage point gives the CFO an opportunity to really see what’s coming, what’s happening, and tell people when they maybe are off course or derailed. n So, how does reporting play a role in the process of value creation? LEDERMAN: Many finance executives generate reports internally and externally. Now, all of these reports you have, they have to be focused on key metrics, what really matters, and have a balance. Reporting happens over time— it could be daily, weekly, annually. But the focus of it, the content of it, the balance of it, whether it is financial or non-financial, all of this matters. The reporting is very important. n Tell me how a good CFO keeps a company focused on value creation over an extended time period. LEDERMAN: A great CFO will challenge an organization. I look at it as continuous improvement: If you are not pressing the organization and the CFO is not driving into the organization “you can do this better,” you don’t get a different result. And when you ask a person in an organization, “Can you do this 5 percent better, 10 percent better?” it’s kind of hard for them to argue that they can’t get it a little bit better if they do it again. n The idea of value creation: Is this just a concept, or does it actually work? LEDERMAN: Well, value creation is a concept [and] not just a simple concept. You can see companies that are very successful driving value for their shareholders, driving it over very long periods of time. So it is possible, it has been done, and if you do it the right way, it is sustainable. n So, value creation is a proven method of success. LEDERMAN: Absolutely proven. C Interview by Andrew Zezas Q A Fueling Value Creation 2nd QUARTER 2015 WWW.CFOSTUDIO.COM 23 Watch the entire interview on www.cfostudio.com/barrylederman Barry Lederman, left, and Andrew Zezas