We hear it again and again: Finance isn't all about numbers. It's about communications, too, whether you're developing client relationships, pitching new business or working with colleagues on the trading floor. Here, Petter Wendel, chief financial officer of Greystone & Co., shares lessons he's learned about communicating and relationship-building.
Petter Wendel, 42, is chief financial officer for Greystone & Co., Inc., a New York-based real estate and investment company whose businesses include mortgage products, loan servicing, real estate development and redevelopment. Before joining Greystone in 2005, Wendel was executive managing director of Dexia Global Structured Finance LLC, an international investment bank. Earlier, he was a partner at PricewaterhouseCoopers. He has a bachelor of science in accounting from Boston College and a law degree from Suffolk University in Boston. He is a certified public accountant in New York and Massachusetts.
"At the CFO level, you can't do everything yourself," he says. "You've got to work with people to pull together numbers and get financial statements out. Communicating what needs to be done is important. Secondly, a lot of the information we create in the accounting department is used by people who are not accounting types. Finding a way to communicate that information so it's useful is also important."
Are there situations when communication is particularly important?
We're a financial incubator for new businesses, mostly in the financial services space. Often we'll be working with entrepreneurs. When you deal with entrepreneurial types, they have their way of believing things can work, which is not as conservative as we would like. For example, you can't tell people that projections are not realistic. You have to take people through their numbers - get them to the realization that some of the assumptions should be changed. At the end of the day, they feel you worked with them to come up with something that both of you are invested in.
Can you think of one situation in which you moderated the approach of one of these CEOs?
It's a business that we looked at recently: small merchants using their future credit card receivables as collateral to borrow money. The returns were large. One of the things that folks weren't focused on is that once (other) people see that we're making a lot of money, competition will arise. What you have to do in year one, two or three is start squeezing down margins.
I first asked, 'What do you think is going to happen in the marketplace when people hear that these returns are available? Do you think that competition will come into play?' The answer was yes. And then I said, 'If you think competition is going to come into play, what do you think that's going to do to margins?' Lastly, I added, 'When do you think that's going to happen? How much do you think margins will shrink? Is there a point where things will level off?' It's more of the Socratic method of asking questions and letting the answers lead to the conclusion.
What influenced you to adopt this approach?
I learned most of my soft skills from mentoring relationships. The CEO of our group at PricewaterhouseCoopers would never tell anybody what to do. He would always ask people questions and see what they thought about things. What he thought is that people don't like to be told what to do and if people think that your idea is theirs, they're going to embrace it and work that much harder to make it happen.
Have you been able to measure a benefit of strong communication skills?
When I came here, we didn't have a discipline of closing the books within a set period of time. One month it might be the 15th. The next month it might be the 20th. Some other month it might be the 25th. I put out a goal and said, 'Listen, what I would like to see is that our books are closed by the 15th of the month.' I didn't go to every person and say, 'This is how you're gonna do it.' We set the goal and made them part of the process of getting there.
And how long did it take you to get that on track?
It took us about three months.
What's the long-term benefit?
Everybody now knows when you're going to have information ready. It's timely information that we can use to manage our businesses. Then, secondly, if you have that discipline and you're doing it on the 15th instead of the 20th or the 25th, you have more time during the month to get working on other projects that are going to build value. If you sit down with people and work with them and ask them questions, get them purchased into your thinking, that results in businesses becoming more profitable more quickly.
How do you stay in touch with the different businesses?
I try to see each of our businesses every couple of months, be there in person - get to know people personally, not just make it all business. We have lunch, dinner, play golf, and I find out what they're interested in.
It's a huge motivator. When you have to have a hard conversation, if they feel like they know you personally and that you're their friend, they'll work a lot harder for you.