Here are some key takeaways from CFO Brew’s latest live webinar, Quantifying and Qualifying Workplace Financial Risks, in which CFO BRew editor Drew Adamek spoke with Audible’s chief growth and Financial officer Cynthia Chu about how finance departments can evaluate critical risk decisions and identify opportunities.
This interview has been lightly edited for length and clarity.
With so much disruption and uncertainty in the last three or four years, how are you centering risk management differently than five years ago?
Even on a monthly or quarterly basis over the last few years, it changes. Audible is a digital subscription media company, meaning that some of the macroeconomic and dynamic [factors] had an impact on the attractiveness of our service. One of the key things that we continually risk-manage is that, as a subscription-based business, we want to make sure that we’re continually bringing value to the customer and adding on to that value so they’re staying with us and we’re retaining them.
The other thing is technological advancement in our field, particularly being a tech company, so paying attention to movement and trends in the industry is another risk-management element that we must pay extra attention to make sure that we understand and how it impacts how we create content and how we bring content to life in our product experience.
We talk a lot about how the CFO’s role has changed in the past decade. How has that strategic shift impacted your relationship to risk management, but also how you engage with the larger organizations in risk management?
Sometimes, when we do scenario planning, it could be isolated to a financial exercise. It’s very much top-down directly with [the] CEO and some of the top executives, but what we now have to do…is recognize that the more risky the environment, the more important that the finance team is at the forefront, partnering with different stakeholders to understand those input elements to see how they can impact the output, which is usually the financials.
Over the last three years, it has even heightened the importance for my finance team to truly be partnering with their stakeholders, whether that’s product, tech, or content stakeholders. Scenario planning and risk management became more of a reality-based exercise, rather than academic, and the only way that can happen is for finance to be side by side with the business stakeholders.
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How do you anticipate competitor risk when launching a new product?
You can’t ever anticipate everything that a competitor is doing. A different way to answer is that when we’re looking for a new product to launch, the center of that has to be rooted in the customer. We have to fulfill a customer’s needs and bring value. We approach it from a customer obsessed, competitor aware [place]. It needs to be rooted in if it’s something that the customer wants and if it brings value.
If you look at it from a strictly competitive point of view, it would be a lopsided equation.
Having a dual role as CFO and CGO, do you find that your day-to-day functions are geared towards one function more than the other?
Depending on the project, that might be the case. Being any successful functional lead at the executive level, your de facto should be wearing the “big Audible hat” instead of the finance, growth/marketing hat. I say, before even getting the growth officer role, I always was thinking about what it would take to grow Audible, deliver value to customers and then, in turn, the long-term financial output value to the company.
To answer the question, on a larger strategic level, it doesn’t change much. It can change on an individual project basis, however.
You’ve been in finance for nearly 25 years. How are you personally upskilling and managing your skillset and what are you doing to stay current in the shifts happening in the CFO role and risk management?
There’s no amount of time in the day to be able to read all the articles. From my standpoint, I try to keep up to speed on certain blogs and newsletters. I also spend a lot of time in my role working with other C-suite leaders to understand the top trends because they’re the functional experts in their functions. I’m never going to be as well-versed in these trends, but carving out time to have that one-on-one time to keep close tabs on them. Audible is a subsidiary of Amazon, so I’ve spent time with other Amazon business leaders to understand trends.—LR