CFO Studio magazine with Todd McElhatton

gave him an entrepreneurial role next, sending him to Switzerland to start a new business for HP’s Outsourcing Business. “One of the things I tell people who I mentor now is don’t be so prescriptive: ‘I want to start at X, and I’m going to move in lockstep and manage people at this stage, and manage a larger team at this point,’ ” says McElhatton, who earned his MBA at the University of Tennessee. His early HP experience gave him an understanding not just of the impact the numbers had on the business, but the timing: how long before that revenue adds to the business. It taught him, in other words, “how Finance could make a difference,” he says. “And sometimes the difference was keeping the company from doing something that wasn’t going to have a good outcome.” He also absorbed how to lean-in on a decision, asserting the correctness of a course when there are “more variables to the equation than just the variables you have on the spreadsheet,” he says. McElhatton gained other valuable experience when he moved to WebMD in 2000. “Tech stocks were hot,” he says, “and it was an opportunity for me to learn a whole different skill set.” He went from an environment where everything was very structured and the hierarchy was two or three people deep to one where he was making decisions on his own because “nobody had done it before.” But soon the heady atmosphere soured as the dotcom-led recession hit. Although WebMD was heavily capitalized and able to withstand the downturn, the company had to roll back its ambitions quickly, focus on making money, and release around two- thirds of its employees in a three-month period. “It’s super hard, but if you don’t make those tough decisions, no one will be there. You realize you’ll never have perfect information, and how do you make the call with 80 percent of the information because time is of the essence?” he asks before quickly adding: “The difference between having 80 percent of the information and 88 percent doesn’t make that much of an impact.” A restructuring or a recession can forge character, though. “You learn a lot as a leader about what you don’t want to do,” he says. “People want a leader that doesn’t have their hair on fire. They want one who is calm and can be thoughtful even if you are under the pressure of a deadline or difficult decision. They also want to have a leader who is authentic and thoughtful. You’ve got to provide hope but at the same time be truthful and authentic with people and give them the context around what’s happening in the business.” Beyond Being a Traditional CFO That McElhatton brings his best to work every day is apparent. Working hand-in-hand with sales comes easily to this people executive who early in his career absorbed the lesson that broader knowledge is better. He frequently showcases tools for customers— SAP products, after all, make the Finance function hum. He’s a practical man, understanding that no one can focus on too many imperatives at once. “You get a much better outcome if you can help people distill their focus on the three things that are really going to make a difference,” says McElhatton. In fact, McElhatton believes that one of the most beneficial contributions he can make as CFO is to provide focus in a business world that can sometimes offer too many priorities or directions. cfostudio.com 7 Embrace Change “The reality is we’re in a constantly changing business here at SAP. The move to the cloud has been a huge change for us as an organization,” says Todd McElhatton, CFO for the SAP Cloud Business Group. “We’ve taken advantage of a disruption in the marketplace and what we’ve found is we needed to develop new DNA as a company.” SAP worked with stakeholders to help the organization understand how SAP was going to play its hand in this new world. He says SAP has had to provide “a tremendous amount of education” to salespeople, shareholders, developers, and others so that they can “understand, as our business model changes, what does it mean, and how do we have to alter how we behave.” Faced with dramatic change, the company also had to decide what things it was going to stop doing. McElhatton says CFOs often talk about what made their companies great. He says, though, that more pertinent today is: “‘Is that going to take us where we need to go over the next four or five years?’ For a CFO to be able to question that is probably one of the most valuable things you can do for your company.” Drawing on research SAP did, he says that these days CFOs have to envision Finance as an organization-wide service and lead teams who understand how the entire business operates. That’s how Finance chiefs in this hyper- accelerated, drowning-in-data era can help the company come to better, quicker decisions. “PEOPLE WANT A LEADER THAT DOESN’T HAVE THEIR HAIR ON FIRE. THEY WANT ONE WHO IS AUTHENTIC AND THOUGHTFUL.”