Andy Balchin: Without cash, you can’t run a business

Are there any particular challenges for FDs in a security business? 

Not really, the three business fundamentals of revenue, profit and cash are still hugely important. As with all business, understanding the fundamentals of the product are essential so that you can articulate strategy and ensure that everyone remains focused. Security is fascinating and it is definitely the place to be in software right now. Finding a way to ensure we all remain secure yet can still function and collaborate as a business is the imperative.

What key piece of advice would you give to those following in your footsteps?

There are two pieces of advice. The first is to do your due diligence before you join a new company; does it have a great management team or the ability to attract a great management team? Is it in a growth sector or a sector that is likely to grow very soon? Will you enjoy working with your boss (forming a close and solid partnership with your CEO is essential for the CFO)? Does your family agree with your choice?

The second is to absolutely stick by your values, some general and some specific. A number of things have stuck with me over the years which remain at the forefront of my mind when I am working. I think they apply in all walks of life – work hard, play hard; be respectful, open and honest; always be clear about whether what you are doing is right or whether it is the right thing; listen to all points of view and be prepared to be a dictator in a democracy; hope is not a strategy; the answer is always yes (but explain the consequences and implications); you can’t expect what you don’t inspect; don’t sign something unless you know what it is for and what the return will be; operate with the highest integrity; accept that your values are different from other people’s values but they are not wrong; be loyal but be prepared to move on to the next role if your values are compromised.

Do you think the role of FD has changed much in recent years?

The underlying nature of the role of the FD is the same as it has always been. And I mean finance director, a business specialist and business partner, not some kind of high level finance controller (which by the way is one of the key positions that any good FD should have working for him). After all football is still football but very few would argue that it is the same style of game that it once was. I’m a huge Reading fan and look what they have done; since the 1980s from being a poor club playing at an old stadium, almost getting swallowed up by Maxwell and Oxford, to the side they are now with a great stadium, owner and infrastructure. As I can testify though – it’s still football.

However, as with football, the nature and speed of business has changed, combined with a huge change in technology meaning that the FD has to continually be on top of and improve his game. An FD needs to be more agile, fasting thinking, more than just an accountant. He/she needs to understand how all aspects of the business tick, all the time. He/she needs to listen but also express an opinion and he/she needs to be decisive, organised and focused. If you don’t know where you’re going then any road will take you there.

What do you think it takes to be successful?

There are a few things:

  1. Focus;
  2. Having a great team of people around you. They are the guys that do the hard work. They make me look good. I could never do enough for my team;
  3. Working for a great CEO who always challenges but trusts you to give advice and allows you to get on with your job;
  4. Having great investors;
  5. Having a sales team that does the business. If they don’t sell none of us are successful; and
  6. Be happy.

Is there one thing in any business that you don’t like?

I hate the term “think out of the box”. To me as a CFO who needs to be able to manage risk in a way that it maximises return while at the same time ensuring that everything is under control, that phrase doesn’t work for me. Instead I say to people imagine you work inside the world’s biggest balloon with thickish walls. You can push those walls as far as you like, you can create all manner of new shapes, you can stretch as far as you like, you can even work with me to allow things to pass through the walls of the balloon without deflating it (remember the old sellotape trick) but don’t you dare pop that balloon because then there will be consequences. I guess that’s why I now find myself in the software security sector with Clearswift who are that balloon.

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