On November 1, Hewlett Packard (HP) officially separated into two companies: HP Inc., the PC and printing business, and Hewlett Packard Enterprise, which focuses on technology infrastructure, software and services. On the heels of this news, I connected with Tim Stonesifer, CFO of the newly formed Hewlett Packard Enterprise about his transition into the role and how his past experiences as a divisional CFO within HP prepared him.
This interview has been edited and condensed.
Jeff Thomson: Divisional CFOs are often removed from group-level decisions and issues, such as funding. How have you prepared to take on these new responsibilities as an enterprise-wide CFO?
Tim Stonesifer: Over the past six months, I’ve actually been wearing two hats: fulfilling my duties as divisional CFO of HP Enterprise Group (EG) while also driving company- level discussions as CFO of the new Hewlett Packard Enterprise (HPE).
At the divisional level, I was responsible for helping the business achieve its goals and driving outcomes in a very dynamic market and company environment. This required setting clear priorities, resolving complex issues, and partnering with various groups across HP to drive business results.
Although the enterprise-wide “lens” is more focused on corporate finance challenges, I applied those same skills from my operating finance role to help establish HPE. I also had a great coach in HP CFO Cathie Lesjak, who provided me counsel and advice when I needed it.
Thomson: As CFO of the Enterprise Group, how did you work with Cathie Lesjak and the rest of the finance team to ensure the company’s financial goals were met? What takeaways will you bring to your new role as a group CFO working with HP Enterprise’s divisional CFOs?
Stonesifer: When I joined HP as CFO of EG, my primary objective was to help the business drive profitable growth and to positively contribute to HP’s broader financial goals. Cathie would deliver “tops down” financial guidance and then I would work with the EG finance team to operationalize those targets at the business unit level.
Overall, one of the most important elements of my role as divisional CFO was to drive accountability across EG. To do so, we developed detailed financial instrumentation to provide better financial visibility and transparency, which then drove more accountability within the organization. Within this framework, we empowered the business leaders to run their businesses and make decisions, while holding them accountable for their results.
I’ve had a variety of operating finance roles over the last 20 years and have always appreciated leaders who set a clear vision and priorities, and then empowered the team to go out and deliver on those priorities. Given my new role, I’ll be spending a lot more time on broader corporate finance strategy and with our investors, so I’ll be reliant on the divisional CFOs to drive the day-to-day operating results. I have a great team and will provide them that same clarity and alignment, and then support and empower them to drive business results. I spent 18 years at GE, which has a great finance model around delivering results and being accountable. I plan to continue that here at HPE.
Thomson: You previously served as CFO of a number of different divisions within GE and GM before joining HP. In your experience, does the CFO role vary across industries and, if so, how (e.g. different regulations, a greater emphasis on business partnering, etc.)? How would you recommend CFOs planning to switch industries prepare for the transition?
Stonesifer: Transitioning to a different industry can be overwhelming, but the comforting part is that the core financial skills of a CFO translate across industries and geographies. Leadership, critical thinking (the ability to breakdown complex issues and develop practical solutions) and communication are attributes that every strong finance leader needs regardless of the industry.
I’ve also found it useful to identify a peer in the business you’re joining who you can solicit advice and learn from, and bounce ideas off of in a safe environment. When I joined GM as the CFO of its international operations, I spent a lot of time with Chuck Stevens, who was a 30-year GM finance veteran and the CFO of the North America operations. Chuck had great insights on how to navigate the GM matrix, accelerated my learning curve on some of the financial nuances within the auto industry, and helped me gauge talent as I assembled my team.
The most challenging part of changing industries is understanding the competitive and operational dynamics within that industry. I’ve been in the insurance, leasing, manufacturing and structured finance industries, which all behave very differently. It’s critical to meet with customers, the team and industry analysts to learn as quickly as possible.
I have strong international experience that has made it easier to transition to a multinational organization like HPE. Having an understanding of how regulation, operations and partnerships vary country by country allows me the advantage of applying my skills to various regions.
Thomson: When discussing the split of Hewlett-Packard, CEO Meg Whitman explained the move would drive innovation. How do you view the CFO’s role in the innovation process and what steps will you take to encourage innovation within the finance function?
Stonesifer: At HPE, investing in innovation will remain a core priority moving forward, and, as a smaller company, we’ll be able to be even more focused with our investments. To achieve this, finance plays a key role in setting up the right capital structure and capital allocation strategy, including maintaining a strong balance sheet and investment grade credit rating. An optimized capital structure gives us the ability to make the important investments in the business while also meeting other capital obligations.
Finance also plays a key role in determining which investments we should make, based on expected returns. Our preferred strategy is organic investment in key focus areas across our portfolio, but we will consider inorganic investments through strategic partnerships or our Ventures program. R&D was up year over year in FY14, and we expect it to continue to grow as a percentage of revenue. That being said, we will also consider M&A in the right circumstances.
Thomson: As CFO of a newly formed company, how will you develop your relationship with the board? In what ways can CFOs effectively work with the board to reinforce their role as strategic thinkers influential in driving business growth?
Stonesifer: I see our board as business partners, and as such, will use my role to ensure the board has the appropriate insight and financial transparency to drive well-informed decisions. I will maintain a regular cadence of meetings with the board and audit committee members, and will solicit their insights and leverage their experience to enable the business to achieve its commitments and drive shareholder value.
