Case Studies

Shoretel

Behind the numbers, this CFO sees a story

The public is conditioned to see the world of finance as one of cut-throat power plays and constant hustle. While it is fast paced, at least one CFO says that patience and intuition can’t be overlooked.

Michael Healy has been in the finance game for 30 years and has led over a dozen acquisitions, all of them in the equally fast-paced world of technology. Healy has worked for giants like Apple and most recently was the CFO of  Shoretel, a global provider of Voice over IP communications solutions.

Shoretel

While no business benefits from sluggish leadership, Healy says he’s surprised that more people don’t realize that a good finance officer must not only be patient and intuitive, but also quick and adaptable.

Virtues of finance

Healy says finance runs on deadlines like any other part of business and SEC or quarterly report filings must be done with urgency. However, some deals, especially mergers and acquisitions, benefit when finance executives slow down and take a moment to assess the situation.

“M&As are a fun but grueling piece of a CFO’s job,” Healy says.

He adds that he’s always been attracted to companies interested in acquiring. “[They’re] not complacent with where they are and that’s especially important in technology, where you need to reinvent yourself every X number of years.”

No situation taught him the value of patience and intuition in M&A quite like an acquisition he worked on years ago, as vice president of finance for Exodus Communications, a web-hosting and network management company that was one of the largest Internet Data Center companies during its heyday.

Shoretel

Healy recalls visiting the offices of a publicly traded software security company to perform due diligence ahead of potentially buying it. Several of Healy’s colleagues wanted to finalize the acquisition quickly; however, Healy noticed things weren’t quite right the moment he walked into the office of the target company’s CFO.

“There wasn’t a stitch of paper anywhere,” he recalls. “I thought, ‘Either this guy is really efficient, or something else is going on’.”

Healy says that although he felt pressure to complete the acquisition, he decided to wait and see the target company’s quarterly report before making a decision.

His caution paid off, as the parent company was sued by its shareholders and became the subject of an SEC investigation due to irregularities in its accounting. The CFO and CEO were terminated and ultimately, Healy and Exodus Communications acquired a valuable subsidiary of the target company for a bargain price without purchasing the parent company.

Another quarter, another story

In addition to trusting his gut, Healy has learned to think in what he calls stories, not financial statements. “You’re telling the company’s story every quarter,” he says. “You can’t just rattle off stats.”

Healy says the best thing a CFO can do is provide context to investors and partners on what the financial information and metrics mean and how they are making a company more valuable. “If you’re a publicly traded company, everybody can read your numbers whenever they want anyway,” he says. He adds that investors care more about the story behind the numbers and how they provide insights into the future.

Shoretel

By telling a story that looks at how and why the company has attained its current numbers, Healy says the finance department can encourage a powerful transformation—turning data into insight.

“I tell my team that all financial groups generate a lot of data and information, but the best groups turn that information into insights.”

By insights, he means looking at the how and why of quarterly statements and metrics, not just taking them at face value. He also means finding ways to tailor communication to potential investors and partners who may have various levels of knowledge about finance.

A statistics-heavy analysis of a statement or quarterly report could overwhelm or bore some people, he says, especially those less interested in this quarter’s numbers and more in what the company will do to stay competitive in quarters to come.

Memory Lane

In a field as transient as information technology, forging long-term relationships can transcend any single project or company. Healy says he’s been lucky to work with talented colleagues, in finance and outside of it, who have followed him to his last three jobs.

He emphasizes that loyalty is built over time, but that convincing people to stick by you for years is “about creating an environment where people feel they are working with you and not for you.”

His care for his employees extends beyond the office. Healy and his wife host holiday dinners at their home, where Healy offers tokens of gratitude to his staff, even taking a moment to apologize to spouses for making his team work late. Around Christmas time, he’ll suit up in red and white and strap on a fake beard to play Santa Claus for his colleagues’ children.

He’s clear that these extracurricular events are not about incentivizing, but about showing genuine gratitude and friendship. Not surprisingly then, he attributes part of his success to “great people, good systems and a strong knowledge of the industry,” and adds that his intuition and patience weren’t developed in a vacuum but with the help of longstanding teammates.

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