Session Summary and Resource List

PMBA 2015 Conference -‐ The Strategic Partnership of the CEO and CFO Thursday, May 28, 2015 -‐ 10:45a-‐12:00p ET

Session Summary and Resource List

Presenters

Barbara Landes

CFO, Treasurer and SVP, Corporate Services, PBS [email protected]

Tom Karlo GM, KPBS

[email protected]

Vince Petronzio CFO

Director of Finance & Accounting, KPBS [email protected]

Session Description

In the current public media landscape, change is a constant. In order to successfully navigate the challenges presented, it is essential for station CFOs to form a strategic partnership with their CEO. The role of today’s CFO is no longer centered solely on the financials. CFOs can partner with CEOs to survey the strategic landscape, identify opportunities, be a champion for innovation and risk management, help nurture board relationships and manage key operations. Learn how a strong CFO/CEO partnership can work and how to position yourself to be a strong partner.


What does it mean to work strategically as a CFO? It’s no longer just about the financials and being a tactical gatekeeper and having a glass half empty view of risk. It’s about being a trusted partner and collaborator, someone who sees what’s possible, and who is helping to identify and foster innovative approaches for your business.

It’s essential to leverage core CFO skills – the understanding of analytics and key metrics, a deep knowledge of business models and revenue sources and expenditures. It’s also important to keep up with tools and technologies.

Being a strategic CFO requires taking a longer term view of investment, and plotting your financial strategy with regards to liquidity and investment.

§ Do you have adequate cash now and looking forward? § Do you have borrowing capacity? § What do you need to do to strengthen your balance sheet so you are

attractive to a lender? § What are your sources for financing capital purchases?

A strategic CFO must be outward facing as well as inward facing and understand market forces and competition. It means stewarding investments and endowments appropriately.

It’s also important to understand enterprise-‐wide risk. Have you performed a risk assessment in order to identify and acknowledge the threats to your enterprise? What are your risk mitigation strategies?

It means partnering with the CEO and the Board to develop the strategy that drives the business plan and budget. And then monitoring to ensure the plan is being delivered upon or to advise on course correction and implementation.

In this evolved role, the CFO is still responsible for making sure the assets are safeguarded accurately and appropriately reported and fully compliant with all regulatory and federal requirements but as noted above, there is so much more.


Strong collaboration is essential

So much about working and functioning strategically is having a good understanding of your CEO’s expectations. Start by working with your CEO to understand the risks, alignment on organizational priorities and forge an agreement on the overarching organizational strategy.

Be careful not to define the above in a vacuum. Engage your senior management team in regular discussions about strategy, prioritization, and resource deployment. This work culminates in the development of the annual operating plan and budget which sets the overarching framework for the content and services PBS delivers.

Once metrics for the organization are developed, schedule regular touch points with your CEO to check in on progress organizationally as well as your personal performance goals.

Extend a strategic approach throughout your organization

Often CFOs have oversight beyond finance and accounting. They often have responsibility for other corporate support areas such

as IT, Facilities, Administration, and Human Resources. This organizational structure can allow a CFO to work across their organization to ensure that through effective talent management, proper accounting and financial oversight, and having an engaging and productive physical space and tools, the appropriate resources are made available, allocated and deployed at the right time in support of the strategy.

CFOs are able to develop and sustain good communication channels throughout the organization in order to effectively monitor the constant flow of critical activities in the company and the resource implications. They’re able to move quickly and nimbly to support the priorities identified in the operating plan and budget on behalf of the system.

Barbara Landes, CFO for PBS says,

“An important role for me is to provide feedback and insight to our leadership on the current status about how we’re doing, and the future view of what’s ahead so that we can anticipate the challenges we’ll need to work on. The goal is no surprises! so that Paula and with our new COO Jonathan Barzilay


can be assured that they are informed and are aware of all the activities that impact our work at PBS in support of our mission. “

Why is it important?

The strategic CFO who partners with the CEO/GM is more important than ever.

In line with the theme of this year’s conference Managing Dynamic Change – change has become a constant, the media landscape is constantly evolving with the emergence of new technologies, new policies and regulations such as Net Neutrality and the upcoming Spectrum Auction. There are new audience demands about how, where, and when they consume their content.

The CFO is key to the success of an organization that wants to be nimble in an ever-‐shifting landscape that requires new thinking and an innovative approach. In order to navigate this new world, the ability to innovate is a must for any organization regardless if it is a profit or non-‐profit entity.

The reality is non-‐profits need just as strong a strategy and business plan as a for-‐profit entity in order to solicit the combination of individual donations and corporate underwriters and foundation grants that is so essential to public media fulfilling their mission.

CFOs have the core skills, knowledge and experience that will increase the likelihood of success in developing innovative approaches. By applying your subject matter expertise in risk mitigation you can help manage innovation at your organization to ensure a well-‐defined concept that can be successful and supported by your board.

What are the benefits of being a strategic CFO to your business?

Help your CEO be more effective.

More and more CEOs are out of the office. Having a strategic partner who is strong operationally and strategically extends what they’re able to do. It extends the reach and effectiveness of the CEO by focusing inward if your CEO is focusing outward on your community, board, and donors. Look for opportunities to apply complimentary skills sets that balance out your working relationship. Try to tailor your offering to that person’s strengths.


Create an Innovation-‐friendly environment.

To survive and thrive, experts tell us we need to be constantly innovating and changing to adapt to new business realities. Innovation is achieved by taking a variety of paths. The more successful approach, in general, seems to be in placing small strategic bets and trying new things. With the insights of a strategic CFO, you can separate out the bets that align with your strategy and those that are just chasing the shiny new object. As a result, you can guide your station to place more of the right bets, measure results and take that knowledge and channel it into refining and iterating the approach.

Help your station navigate change

Partner with your CEO to create the financial resources and capacity, using the budget as a through line and the strategy as a guidepost. Help position your station for financial sustainability in order to super-‐serve your community.

Once the strategic plan is established, align and manage the budget to that plan. Work with your CEO and senior management team to establish an agreement on how to evaluate new opportunities that come up in the year. Apply discipline to determine which ones will be funded that year or deferred to the next budget cycle. Monitoring spend levels monthly versus quarterly can help you detect issues in time to mitigate the impact.

Being disciplined and strategic are complementary skills

Remember, being disciplined – the hallmark of a financial professional and being strategic are not “either /or” skills. The analytical and other CFO skills you bring are important to help frame the options and position your organization effectively now and for the future. And once you and the CEO, with support of the Board, set the strategy and priorities, you are ready to execute. A CFO who is strong strategically and operationally is the “whole package”.


Insights from a CEO / CFO Team Moderated Discussion with Tom Karlo, General Manager, KPBS and Vince Petronzio, Director, Finance & Accounting

Barbara: Tom, how long have you been the KPBS General Manager and how long have you worked together?

Tom: We have worked together for about 5 years and I have been General Manager at KPBS for about 6 years now;

Before becoming GM, I served for 7-‐8 years as the CFO. I was not a CPA or accountant but had the role of managing the purse strings, checking accounting and ensuring we were realistic in our spending and had a balanced budget. That gave me a great perspective and understanding of the position and strategic role played.

At that time there were two senior people and 11 department heads which included the CFO position, but we didn’t have a say in the organization’s strategy. Things were done in an autocratic way, when I took over as GM; I wanted to engage those department heads in order to have a full and robust knowledge of the organization.

My predecessor would make decisions without me; it was not the most productive relationship. It has worked very well with Vince because as he said before, we operate on the same page and he is an extension of me in his role.

Barbara: What are key elements you would like to share about the way you work with each other. What’s the key to your successful working relationship?

Vince: I see myself as an extension of the GM in his role and I try to always have a good understanding of expectations. This isn’t easy in any organization given the rate of change and challenges.

We have an understanding of our communication protocols (whether via email or otherwise) and have regular communication checkpoints or meetings where we strategically discuss and agree on our opportunities and risks and align our priorities. I like to be consistent and bring a ‘can do’ and not a ‘can’t do’ attitude. I try to work with tactfulness with the team and be a trusted/reliable colleague in helping them reach their goals.

Working effectively with your CEO

§ It is important to get on the same page with your CEO by understanding her/his vision and expectations.

§ Put in place regular “check points” to make sure you are working in concert

§ I strongly believe a Strategic CFO operates with little to no significant “surprises” and is that consistent, reliable partner, problem-‐solver and collaborator, in removing barriers and creating win-‐win innovative approaches within the team -‐-‐ Vince Petronzio


Barbara: Tom, what are your expectations for how the business will run? What will be accomplished?

Tom: Our KPBS Framework starts with the strategic plan. We try to be laser focused and define exactly what we are going to do for the next year. As we go through the year, we have a little bit of flexibility, but generally if it’s not in the plan or not specifically funded by a donor or new grant, we’ll defer it to the next year.

This alignment helps the CEO/CFO relationship. Sometimes CEOs bring a lot of challenges to the CFO with a ready/fire/aim approach. They can put the CFO in a tough position, when they have a great idea and tell them they have to find the money. The lack of organizational structure and strategies can create a circumstance when the CFO then becomes “Dr. No”. Culturally our organization doesn’t do that; we are more of a ready/aim/fire team.

There is a weekly finance meeting with CEO, CFO, COO and the Assistant GM of Development. During the meeting, we review finance and operational issues including looking at our YTD results, cash flow and the cash flow forecast, legal issues, HR issues, critical project, and more.


Tom (continued): We have standard monthly reports, and are able to make tactical adjustments if we need to along the way. If we wait until mid-‐year, then we have a larger problem to solve, monthly view gives the chance for course correction. We adjust the forecast through our monitoring and through the budget committee. We can decide to add something to the expense that might not have been in the plan, and again that is cleared through the budget committee as well.

Also, in managing dynamic change, again working with our budget committee and directors we have put an organizational process in place – an opportunity vetting process to document and quickly evaluate and consider a new opportunities.

Barbara: Vince, how do those expectations frame the way your team works?

Vince: Those expectations, which I agree with, form the structure and consistency from which we assess opportunities and risks and constantly focus on our resources and priorities.

Barbara: When you hear Tom and Vince talk about this, you can see there is a framework or template that could be applied to your station. It’s having a strategic plan and trying to align and manage the budget

to that plan. It’s agreeing on how to evaluate new opportunities that come up in the year and having discipline around which ones will be funded that year or deferred to the next budget cycle. Monitoring spend levels monthly versus quarterly can help you detect issues in time to mitigate the impact.

Barbara: Vince, by working this way, what do you think the benefits/positive impacts are for KPBS?

Vince: In managing dynamic change, I think it is essential to bear in mind our response time or what I call “time to market.” Often it is important how quickly we can resolve something and make an efficient decision for our audience

We have eleven directors. Working this way provides a clear vision and path for the team. They understand the expectations and fully understand our weekly and other processes for managing and monitoring results. Everyone plays a critical role when course corrections are required.


Barbara: How did you get started on this path? Was this the relationship / approach from Day 1 when Vince arrived or was it evolutionary?

Tom: When Vince started at KPBS, my vision was for him to play a strategic role in the budget process and in order to do that I had him chair a budget committee comprised of 4 senior directors with a depth of experience in the organization. I expected the committee to work collaboratively to create a budget that matched the strategic plan. Vince makes sure that I participate and meet with the committee early on to communicate vision and direction. Just as with other organizational objectives we build in key “touch points” both in the start of the process and as it moves along.

Vince: I’d like to add again, that Tom created the broad vision and communicated expectations, and for the committee the process moved forward and evolved. In fact, our budget process includes each committee member working in detail with assigned directors and managers, and now the process concludes with each area presenting and formally approving their budget. It has taken time to refine and it works for our organization.

Tom: We have a lot of teamwork on everything we do. That is the standard that we set as an organization. Vince is the final say on financial matters but he’s not in the “no” business, he’s in the “how can I help business”, his finance team understands their service role is to help the business make good solid decisions.

We use this same collaborative approach with the strategic planning process and integration with the budget committee. Also we have a separate “quality initiative” that is again integrated with the budget committee to examine efficiencies throughout the entire organization.

Vince is a part of their process and decisions, he’s not the CPA controlling just the ledger, he’s integral to production and development, and is the way to help these different department heads get things done.


Barbara: Are there ever any challenges to working this way?

Vince: Yes! Every manager and supervisor is different and has different styles and approaches to communicating and problem solving. The challenge is to “walk the talk” and be clear and consistent in vision, expectations and direction; to make sure everyone is focused in the same way.

And, KPBS has invested a great deal of time and resource in periodic training to create a team environment and to assist everyone in understanding the different styles of communication and problem solving.

Barbara: Vince, what would be your advice to a CFO who perhaps today is not positioned as a strategic partner but would like to evolve their role?

Vince: Manage up; seek out and understand the expectations of your GM/CEO as much as possible. Work closely to develop the vision and strategic plan. Be a strategic CFO with a can do attitude and be prepared and act as an extension of the GM/CEO position in executing the strategic plan.

Barbara: If a CFO were in a situation where the CEO/GM wasn’t open to a more strategic relationship are there things a CFO can

do on their own to start to have this impact?

Vince: You have to start somewhere in building trust and credibility and focusing on the CEO/GM/organization’s success and I think we have identified some of the critical tools to utilize.

If at all possible, I recommend documenting his/her vision and expectations in as specific a way as possible. Make sure you understand the organization’s critical metrics and refine the reporting to align and measure those key areas of performance

Find out the CEO/GM preferred methods and frequency of communication and apply regular check points via scheduled meetings and other communications to assure everyone is “on the same page.”


How to prepare and position yourself to work as a strategic CFO

Experiences to pursue for your professional development

§ Serving on community or professional boards

§ Seminars or Virtual Learning Opportunities Many of the top schools in the nation including Wharton, MIT’s Sloan School of Business, Stanford, UVA offer ‘FREE’ courses through MOOCs (Mass Open Online Courses). We can post a list of some of the main providers on the PMBA site. There are also offerings at your local university geared towards working professionals.

§ Publications: Harvard Business Review, McKinsey Quarterly, Fast Company, Business Week they all have a lot of content available for free on their websites.

§ Leadership training and development. There’s a range from a one-‐hour Lynda.com online class to a two-‐week class at a business school and everything in between.

§ Industry conferences.

§ Seeking out a mentor or professional organizations that provide training and networking

Resource Links

Massive Open Online Courses (MOOCs) let you take college level courses from some of the best academic institutions in the country for free through virtual lectures. Participating universities include Wharton, MIT, Stanford https://www.coursera.org/ https://www.udacity.com/ https://www.edx.org/

Business Periodicals Harvard Business Review, Businessweek, Fortune, Fast Company and McKinsey Quarterly all feature free content on their websites and in their newsletters. https://hbr.org/ http://www.fastcompany.com/ http://fortune.com/ http://www.mckinsey.com/insights/mckinsey_quarterly

Lynda.com http://www.lynda.com/ monthly memberships start at $19.99/month

Emotional Intelligence Emotional Intelligence 2.0 by Travis Bradberry and Jean Greaves Emotional Intelligence: Why It Can Matter More Than IQ by Daniel Goleman

Key skills needed to evolve your role to a more strategic position beyond your existing financial skills

§ Strategic Planning § Flexibility and being open to new

ideas § Fostering Innovation § Collaboration Skills § Effective Board relationships § Deep knowledge of the industry and

upcoming challenges § Excellent listening skills to be a

sounding board for ideas § Problem Solving Skills § Communication Skills § Emotional Intelligence (EQ) § Leadership Skills


Presenter Bios

Barbara Landes CFO, Treasurer and SVP, Corporate Services, PBS [email protected] As PBS' CFO, Treasurer and Senior Vice President, Corporate Services, Barbara Landes is responsible for fostering the financial integrity and fiscal health of the organization. Her responsibilities include providing management leadership and oversight of finance, accounting, treasury, investments, human resources, facilities, administration, rights management, business development and planning. A member of the senior leadership team, Ms. Landes advises on business strategy and resource management. She is the Treasurer of the PBS Foundation and of PBS Enterprises, Inc. and is Chair of the PBS Retirement Committee. On behalf of PBS, she serves on the boards of the following for-‐profit entities: PBS Enterprises, Inc.; Public Media Distribution LLC; National Datacast, Inc.; and Update Logic, Inc. In addition, she chairs the Audit Committee of the Children’s Network LLC (a joint venture with NBCUniversal, Sesame Workshop and HIT Entertainment). Prior to joining PBS, Ms. Landes was Vice President, Business Planning, AOL Broadband, and Vice President, Strategic Businesses, AOL Brand, where she led the AOL Personal Finance Channel and oversaw other online consumer-‐facing products. Her prior experience includes Executive Vice President and CFO at Averstar; Vice President and CFO of Watson Wyatt Worldwide (now Towers Watson -‐-‐ NYSE:TW); CFO and Treasurer, Pinelands, Inc. (NYSE:PL); and CFO and Senior Vice President, Production and Operations for WWOR-‐TV. Ms. Landes has also held key financial, operational and management positions at MCA/Universal, NBC and CBS. She received her BA from Washington University (St. Louis, Mo.), which named her an outstanding alumna in 2006, and her MBA from the Wharton Graduate School of the University of Pennsylvania. Ms. Landes serves on the National Council of the Gephardt Institute of Public Service at Washington University and is a former Director and Treasurer on the National Board of Directors of Girls Inc.


Tom Karlo General Manager, KPBS [email protected]

Tom Karlo has been KPBS’ general manager since February 2009, but his career at KPBS began in 1973 as a part time assistant while attending San Diego State University. Tom is only the fifth general manager in KPBS’ history. Prior to becoming general manager, he served as associate general manager for more than a decade. Tom’s vision for KPBS is to be the premiere source of news in San Diego. Under his leadership, the station created KPBS Evening Edition -‐-‐ seeing a tremendous opportunity for growth on television. In addition, KPBS’ online content shifted to focus on news, and he expanded the radio schedule to feature news and information 24 hours a day. Tom’s vision for KPBS is another step closer to reality: 2012 Arbitron data show KPBS Radio as the number one station in morning drive. Tom is very community driven in his role as general manager. He spends much of his time representing KPBS in the community and deepening relationships with new and current donors and corporate partners. Tom is Chair of the PBS Station Services Committee. He serves on the PBS Executive, National Policy Advisory committees and PBS Spectrum Task Force. He previously served on the Strategic Planning Advisory Group. Vince Petronzio CFO Director of Finance & Accounting, KPBS [email protected]

Vince is an experienced financial executive with over 35 years of progressive responsibilities in accounting, finance, operations, strategic planning, and business development. He started his career as a CPA at Ernst & Young and rapidly progressed to Senior Manager focusing on a variety of public and privately held organizations including retail/wholesale, manufacturing, technology, publishing, and non-profit institutions including several colleges and universities. Vince has been with KPBS since 2010 and oversees the business administration and financial management functions for the station’s multi-million dollar budget. In that capacity he works closely with the senior management team at San Diego State University and its related Research Foundation. Prior to joining KPBS he served as Chief Financial and Operating Officer in several organizations including an international publisher of management training programs, a privately held engineering and IT organization, a large dietary supplement organization, and an international apparel brand in the action sports market. Vince graduated Cum Laude from Ohio University.

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