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'Finance Plays An Incredibly Important Role In Product Development And Innovation'

Interview with Matt Carpenter, CFO at Audi

7Feb

Over his nearly ten years with Audi of America, Matt Carpenter has played a central role in boosting Audi’s US sales volume and improving the quality of the business for the company and its dealers. Appointed as vice president and chief financial officer in 2016, Matt is responsible for all financial planning, steering, controlling, reporting and target achievement for Audi of America. He also serves as CFO of Audi Canada.

We sat down with him ahead of his presentation at the CFO Rising East Summit, taking place in Boston this March 22-23.

Can you tell us a bit about how you got started in finance and what first sparked your interest?

Most of my family, including both of my parents, had business careers, and I studied Finance and Accounting at University of Michigan as an undergraduate. My early experiences in business, both as a university student and as a summer intern, were largely positive. I benefitted from great leadership as a young professional and always took a liking to evaluating the business case behind different ideas.

How has the role of the finance function changed over the last decade? What do you see as having been the main drivers behind this?

I believe the finance function continues to evolve into more of a 'business development' function. In other words, the work is no longer solely focused on channel, cost and process optimization. Our function is steering the short- and long-term investment decisions of our respective businesses. For me, those decisions now include evaluating the new product lines, the new business models and the new partnerships that will position Audi as a leader in arguably the most transformative and disruptive industry of last few decades.

Do you think executives' perceptions of finance leaders as accountants still prevent them taking up a role as a strategic partner in their organizations? If so, how can they overcome this?

Although different from my own personal experience, I can see how some finance stereotypes may still exist. The philosophy at Audi of America is that the entire team owns our strategy; everyone contributes and everyone is accountable. To maintain this collaborative culture, it is critical that all functions, including finance, demonstrate a healthy balance between traditional thinking (i.e. how things have always been done) and new ideas (i.e. what needs to be changed to secure our future.) Finance can be typecast within some organizations as overly risk-averse and unwilling to change, but these are habits that need to be broken to earn the creditability of our business partners. Be open minded and willing to compromise!

What do you see as being the most important thing to consider when forecasting during a period of sustained growth? What else can finance leaders do to drive growth?

Personally, I believe that market trends warrant more focus than they may receive when forecasting growth (demand side economics). It’s become too commonplace that we forecast based on internal cost structure and capacity (supply side economics). Finance leaders need to trust the market and consumer-driven data and make investment decisions based more on demand and less on supply.

What do you see as the finance function’s role in innovation of new products?

I believe finance plays an incredibly important role in product development and innovation. All too often, the commercial application of a big idea is hard to see from the beginning. Having a sharp eye for the economic upside of a new product, service or business model in its early stages will make or break a company, especially given that consumer preferences and expectations shift so rapidly in today’s marketplace. This belief underscores my earlier comment on the how the function of finance is evolving into one of a collaborative business development partner.

Do you see new technology as having made your life easier, or has it also introduced new complexities? Which technologies do you think will have a major impact on your role this year?

Technology has made many aspects of life and business easier, and it’s also introduced a number of complexities. The accessibility of information and ease of purchasing a product or service is staggering. That said, technology has made it so easy to “stay connected” that it is also easy to lose balance in our personal lives and with our customers. This creates complications. Will we burn ourselves out? Will be become too intrusive to our customers? Will we still maintain an appropriate focus on the human side of the customer experience? The future applications of customer data will be the most interesting technology topic for me this year.

What do you foresee being the major risks you face at your company in the near future? What do you think presents the greatest challenges for finance leaders over the next year? Do you have strategies in place to overcome these?

The rapid infusion of technology investment and entry of new players into the automotive marketplace are key factors we’re paying attention to in the near future. Whose investments will enable products and services that align with our customers…ours or those of our competitors? Steering operating and investment budgets is the biggest challenge for a leader in finance in today’s environment – where every company, every division, every department, every colleague has a new proposal for technology. My strategy for managing resource allocation in this environment is to be clear what our primary objectives are in the near- and long-term, and to remain insistent that each proposal we consider addresses our objectives in a compellingly and meaningful way.

What will you be discussing in your presentation? Is there anyone else you are particularly looking to hear from?

I will be discussing resource allocation and investment strategy in the rapidly shifting marketplace. I am completely open-minded to best practices across all industries and sectors, and I’m looking forward to hearing from all of the other leaders in finance.

You can hear from other industry leading finance leaders like Matt at the CFO Rising East Summit. View the agenda here.

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