My guest today is Frederic Neus, Founder of JK7 Consulting. Frederic is known for simplifying financial management for his clients so they can confidently focus on growing their businesses.

In our conversation, we explore the crucial role of financial management in fostering cross-functional synergy.  For Frederic Neus, cross-functional synergy starts with the CEO's clear strategic vision, with goals cascading down through different functions to foster collaboration among departments.

Many professionals, even those with business backgrounds, need more financial literacy. For Frederic, this is a significant gap in our educational system, leaving many entrepreneurs and CEOs guessing the real story behind numbers. 

For this reason, Frederic advocates the critical need for entrepreneurs to proactively seek professional financial assistance to navigate complexities and ensure the long-term sustainability of their ventures.

Listen to the episode on Spotify, Apple Podcasts, Google Podcasts, Amazon Music, or your favorite podcast platform.

How do you unveil "the story" behind your company's financials to make strategic decisions? Share your story!

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TRANSCRIPT

Stephen Matini: I was thinking about a conversation, and the one thing that was really curious is; after working for so many years as a CFO, what have you learned to be a successful approach as a CFO to interface correctly with all the other functions within an organization? 

Frederic Neus: You need this ability to interconnect with the people and to really interest in what the other are doing.  As a finance person that is always seen as the serious guy and a number, a cruncher, if you don't go to them and get interest in what they do, you are not going to make happen. That's the best way to return and to make them understand, that you will share with as information as numbers, or to open their eyes in order to grow the company at the end.

Stephen Matini: You shared with me last time that you tend to be very people-oriented and also you have a certain commercial understanding of a business. Would you say that these two components helped you communicate with other functions better? 

Frederic Neus: Yes. There is a difference between a good CFO and a great CFO. A good CFO will be the one that's very technical. He knows his number and he's doing the right business sense and all the technical.

To me, the great CFO is the one that has a good understanding of all technical part, but the greatest is a leader with a commercial approach, business understanding people-oriented approach. These two are what is making the difference between a good and a great CFO, that's for sure.

From my part, what has made me different in terms of people has always been an increase in the performance of the company because you make people work better in a nice atmosphere.

You were speaking before but was collaboration with the other department, that is a key, because if are not business-oriented or people-oriented, you will not get the others participating in all this, which the company overall suffer.

And also being people-oriented helps the company overall to have a better people retention, of course in the company and not only in the financial department, but overall.

Stephen Matini: Sometimes there's a cultural element within organizations that impacts what it's called the organizational synergy, meaning the ability of all the functions to talk and to work together. Somehow some companies seem to give priority to some function.

So to give you an example, lots of companies are commercially driven. So the sales function is seen as “The King” of the company, those are the ones who bring the money. 

So in your opinion, when you work in a company in which cross-functional synergy doesn't happen, what would you say that could be a first step that anyone could take to go more in that direction?

Frederic Neus: It’s a difficult question. I would say. I don't think there is recipe for that. To me it starts from the strategy. If you have a great CEO, we have clearly defining our goals, our strategic goals, and that there is a cascade of these goals between the different functions of the companies, that clearly defining those goals by the pillars of the company and without forgetting the interconnection between these pillars. All depends on each other's for sure.

It all start from the strategy and then you state the objectives and this allows you to have this interdependence between the different pillars, functions of the company as you say. But yeah, obviously I agree with you, “The Kings” are always commercial.

Stephen Matini: Why do you think people become so tribal with their function and somehow struggle with interconnectedness? 

Frederic Neus: This is a lack of and alignment from the start. Again, you don't that CEO which has that vision and the team spirit of connecting everybody, you have big chance for non-success.

If you don't manage as a CEO or as a management team to play as a team, you will keep the silos in the company and everybody will sit there in his silo and do whatever he thinks is good for him, which means that is not good for the company.

You have some entrepreneurs, so the CEOs of the company, they are doing it on purpose. You know?  They are keep the people separate. In order for him to have got this link with control with everybody, he is sure that everybody had passed by him, which at the end of the day to me show a lack of confidence in himself rather than anything else.

Stephen Matini: I love when you said that you have to be able to tell the story through the numbers. Do you think it's because you experienced both working as a CFO within a company and now as an external consultant providing SCFO services to companies. Would you say that it's easier as an outsider or an insider to tell this story through numbers? 

Frederic Neus: There is no black and white. As an inside for sure you already know the company because you have this time of you go to good companies or big companies. You've got this onboarding where you go through knowing everything, starting your job, well most of the time saying that it's everywhere, but you have more time. And from that perspective, I think it's easy.

So what we do now as an external, we've got onboarding process, which at the end of the day it's rather technical because you need to get the data, you need to ask questions and everything. But the main purpose of this onboarding process is really to get feel and to ask right question in order to understand what's going on in their company in order to provide them good value as quick as possible.

You've got to understand very well the company and the business they are in order to provide the right support and the right value as a CFO, being internal or external, at the end of the day, it's the same. But then if one is easier than the others, I would say that being internal is easier, but we are trying to be as effective as an internal by having this perfect onboarding process.

Stephen Matini: How did you choose this slogan, “Making the Invisible Visible” for JK7 Consulting, which is so simple but so great?

Frederic Neus: We were in a session in order to get to the right sentence for our vision and mission, we came up with different possibilities and two of us more or less arrived with the same thing.

We're trying to bring to our customers that understanding of what is happening in their company, because 95%of the time, they don't know half of what's going on in their company. They don't know all the interesting element that is in their numbers because they don't know how to get there. And so this is our first job. Let's create the right visibility and the right understanding of what is going on.

And it's not easy, but with simplicity. Because I mean I already told you about that, but if you, yeah, I'm a great CFO and I'm the best, and then you come up with ratios of liquidity, assets, whatever. I mean your customer which doesn't understand already his number, if you come with that, they will understand even less. If you don't speak their language, you're going to lose them even more. So we create visibility to the past, and then we are going to create another set of visibility, but to the future, a more strategic one.

In this scenario, 1, 2, 3, this is what is going to happen with your company if you do that, this is from a number perspective, this is what will happen. This is a nice element because it allows that CEO that we were talking before to start to realize the impact that he can make