The year of the catalyst CFO

CFOs must act as catalysts within their organization, Humanetics CFO Amit Singhi believes. Leaders who can derive insights from data and drive change based on what they’ve learned.

A seasoned CFO, Singhi served as CFO of Ford South America, Ford Global’s customer service division, thermal imaging device manufacturer FLIR, and automotive components manufacturing group the Piston Group before joining Humanetics in 2020, the global high-tech safety devices manufacturer that’s best known for inventing and producing the crash test dummies used in vehicle-safety evaluations.

Singhi said he’s thought about what it means to be a catalyst since reading about Deloitte’s framework “The four faces of the CFO,” which describes four roles that CFOs, ideally, will fulfill. Along with catalyst, in Singhi’s take on the framework, there’s steward, operator, and strategist. For Singhi, catalyst could be the persona in which a CFO can have the greatest impact.

“Being an operator and a leader is a given,” he told CFO Brew. “But as a catalyst, that’s where you are driving the most day-to-day tactical performance by identifying gaps in the business, identifying best in class, and then helping the organization close that gap and keep improving.”

Out of SALY mode. Singhi recalls when he was CFO at FLIR and the company wanted to improve its return on invested capital. The finance team analyzed how it underperformed in that area relative to peers and best-in-class organizations. They then established initiatives for all three elements of working capital.

When it came to accounts payable, for example, the team saw that FLIR paid its suppliers within 30 days. Its key competitors, though, had 60-day payment terms. That was “an opportunity to improve our overall cash conversion and cash cycle and cash position,” Singhi said.

But when finance met with the procurement team, they received pushback. “The first reaction was, ‘Oh, this is going to be so difficult…We’ve been doing it this way forever,’” Singhi recalled. They remained persistent and agreed to work more closely with procurement on the issue, and, in time, people came around.

“Finance and purchasing were hand-in-hand” when making a case to the suppliers for different payment terms, he explained. They made a logical case, arguing that they had been excellent customers who always paid on time, and pointing out that their competitors were getting a different deal. “At the end of the process, we converted about half our suppliers to 60 days” without any changes in pricing, Singhi said.

The lesson: “The key to being a catalyst is not just identifying the opportunity but then being able to influence the rest of the team,” he said. “As you drive change there’s going to be resistance because people don’t like change. But the key there is persistence. Use the analysis, use the data to make your case.”

Delegation helps. “Finance was already operating as a strategist” when Singhi joined Ford in 1994. But today, the catalyst and strategist roles have moved to the forefront. The steward and operator roles are “absolutely necessary, but they are not sufficient,” he noted.

That shift makes having a strong team all the more vital. He’s able to delegate some of his stewardship functions to staff who have good technical skills. “They are taking care of all the blocking and tackling and all the fundamentals,” he said. With “good processes, good systems in place,” he’s able “to spend more time on being a strategist and catalyst,” he said—for instance, helping Humanetics go from selling sensors and hardware to being a “system solution software provider.”