This episode features an interview with Michael Dinkins. Michael is a finance industry executive with more than 40 years of experience, and currently serves as President and CEO of Dinkins Financial and on the board of a number of publicly traded companies. Over the course of his illustrious career, Michael earned numerous awards during his tenure with GE and GE Capital, and served as CFO for five different public and privately held companies, the most recent being Integer Holdings Corporation, from which he retired in 2017. 

On this episode, Michael discusses how the CFO needs to think about liquidity and access to capital, how to assess risk, why times of trouble reveal the true health of your business, and how to position your company to survive a crisis.

Key Quotes:

“A lot of people think of liquidity as ‘how do I get past the next 30 days?’ I think it's more of a five-to-seven year timeframe. You’ve got to plan your access to capital…[and your] ability to finance the strategy of the business over time.”

“I think the most important thing a CFO does is to make sure that the company has access to capital to execute. 90% of companies can't self-finance their game plan. They're going to need some type of external source of capital to execute the strategy. The CFO's job is to say, ‘I will get you that access to that capital on a timely basis, at good rates, with covenants that are not going to restrict you from executing your strategy.’”

“I serve on three different public boards, and I can assure you that [when Covid hit] no director came forward and said, ‘Oh, I've seen this before.’ This was unique…And the first reaction was liquidity. What many businesses did was draw on their revolver lines and put cash on their balance sheet–despite the fact that they know that the yield on that cash is virtually zero–just to be on the safe side because they could not predict how this was going to play out.”

“I think that before you go into a crisis, if you know what KPIs to look at and you know what things to really pay attention to that are going to forecast how your business performs…as soon as the crisis happens, you can say ‘Okay, I need to look at A, B, and C and I can kind of figure out how this thing's going to turn out for me.’ Some people know how to do that and therefore, when a crisis happens, they adjust.”

“People ask me ‘What’s the most important thing about a successful CFO?’ and I say it’s communication skills. Because they sit at their desk and they have an aha moment–so what? If they can't leave that desk and go convince the CEO and the rest of the management team and the board to go and execute, it doesn't work. They can have an aha moment but they've also got to be able to package and communicate it.”

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Links

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