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Petr Chernyshov and Yevgeny Romashchin about typical mistakes of CFO, incentives of successful top managers and how a CFO can become a CEO



The Investgazeta has found those who learned by experience how to work this way up. Roman Bondar, a partner of Talent Advisors, interviewed Petr Chernyshov (ex-СЕО of Carlsberg Ukraine) and Yevgeniy Romashchin, CEO of Corum Group, how they took the helm of the company, what is the main task of the CFO and which roles unite CEO and CFO.

How did your childhood influence your rise and career?

Yevgeny Romashchin: My parents are teachers. We lived a modest life, and I felt embarrassed to ask my parents for money. Even at that time I conceived the idea that one need achieve something in his life. Psychologists call this a decompensated model of behavior. On the one hand, I was short of money and wanted to earn, but on the other, I saw that there was a lot of injustice in the world and I wanted to influence this. During my studies at the economic faculty of the university, I felt like becoming a chief financial officer — I liked this occupation. I graduated from the high school in 1996 and in four years I became a CFO. But I had never had even a thought about CEO career. Maybe because I had a lot to do at my position — I worked in the companies having enough to improve. However, by a game of luck I became a CEO of ‘Mining Machines’ Company that changed its name to Corum Group.

Petr Chernyshov: I was born in Ekaterinburg, my family were all university professors. My grandfather, a famous mathematician, was a founder of the faculty, which I graduated from afterwards. As a matter of fact, I had no choice where to study. I finished mathematical school with a gold medal and entered the mathematical faculty. There was always nothing wrong with money in our family – my mother and grandmother taught private lessons and in due course I began helping them. Being a five-year student I started teaching at the university’s lyceum. It was excellent experience of life, I learned two things: to “grab” any audience and speak in public settings. After four years of teaching I left to the bank, and then worked on probation for a year at a large company in Great Britain, next I became a financial controller, and subsequently a director. The idea to take an office of a director general occurred to me when I began working at the bank and realized that I was exactly as good as a СЕО. I continued developing in financial direction, but I have always treated it as some irregularity (laughing).

Yevgeny, do you think that you became a CEO by chance? Didn’t you have the lust for power?

YE.R.: I have another motivation — I am an achiever.

P.CH.: I dare say you are deceiving a bit. From my point of view, power is the best motivator. It motivates you as well, perhaps, you just don’t realize this.

YE.R.: A person, whose motive is the power, is on the top of some pyramid and take care of its welfare. Such a manager is easily identified by a gold tie clip or expensive watch - some conventional counterparts of a crown. Whereas the achievers get buzz through overcoming challenges, they have motivation of a different nature.

P.CH.: I disagree fundamentally regarding watches and tie clips. I think they are chosen by people who actually feel their inferiority. Very expensive tie clips and watches signal that a person is screwed-up. He lacks his inner strength, and he tries to prove that he is strong with external signals.

Which CFO, to your mind, is more efficient — the one who is motivated by power or by achievements?

YE.R.: Generally, there are three types of motivation. They do not occur in pure form, it is always a combination. But one type is always more pronounced. Those, who have either achievements, or power as pronounced motives, become successful.

P.CH.: Exactly.

YE.R.: But motivation of the top manager affects the corporate culture. If people are working with a manager who is guided by the desire to achieve results and new heights, they behave the same way. If they are managed by a person motivated with power, the results achieved through the fear not to fulfill the assigned tasks.

If we imagine the competency model for the CFO, there are three groups: corporate competencies which imply taking the company’s culture values; managerial ones, which are necessary to any manager, regardless of function, and functional ones. Only the last group distinguishes CFOs from other department heads. Unfortunately, many CFOs are focused on the development of only functional competencies, thinking that this will help them grow.

What is most important in the work of a CFO?

YE.R.: One I came across a vacancy description which stated that they were looking for a financial director, but not for an accountant, a person who really understands how money operates. Such description of CFO’s role is very appealing to me.

P.CH.: When I was CFO in the western companies, they were constantly trying to make me write a job description for CFO. I was refusing — I don’t like silly bureaucracy. And in any case, job description for a financial director is very simple. Responsibility of CFO is to provide the company with funds at an amount required for business. And how he will do this – it’s his business.

Yevgeny RomashchinAchievement-motivated

Yevgeny Romashchin, 39 years old
CEO of Corum Group
Graduated from Tula State University. He worked as an expert of Foreign Investment Directorate of “Severstal” company, then headed Economics and Finance Directorate of “Karelskiy Okatysh” company. In 2005 he headed Finance Directorate of DTEK, and in 2007 — Coal Production and Preparation Division. Since March 2010 he has taken the lead at Corum Group.

There are two phase transitions in the life of the CEO who has financial past. First, when he develops within a certain function, becoming the head of the department. And the second, when the CFO, having already fulfilled himself in these sub-functions, fully mastered them, makes decision to take responsibility for the company as a whole. How did this happen to you?

YE.R.: It is a theory, that does not happen in life. Most people, who work in the accounting sphere, do not understand its basic principle - the predominance of essence over form. I saw very few accountants who understand that accounting exists to earn more money. If a person thinks that this is a process for the process, he will not turn out to be a good CFO.

P.CH.: Managers play roles - as in the theater! If a person is able not only to do accounting, but also play a role, he has a chance. In addition, management in fact is storytelling. If you know how to tell stories, to connect them with the business, then you are a Super-Manager. People do not remember the axioms and postulates, but remember well interesting and instructive stories.

As to the roles, the CFO has three main roles. The first role is that of a goalkeeper. He must keep the defense, to protect the company from any unpleasant things. When did they happen, CFO is usually sent to correct the situation. He must see the weakest links, and protect them. The second role is that of a communicator. Let us imagine that the CFO comes to the head of the shop and says to make it so that we would have EBITDA 15%. He won’t understand anything and will continue to do his job, thinking that those "upstairs" have gone mad (and, by the way, he will make a correct decision!). The communicator must speak so that people would understand him, to decompose goals into the small ones, readily understandable for ordinary managers, but at the same time ensuring the achievement of the company’s objectives. The third CFO’s role is that of a messenger. CFO brings a lot of messages to the analysts, board of directors, journalists, banks, auditors, and these people must believe him. Therefore, he must be very persuasive, and not only in figures, but also in his inner strength.

If you change the role of a "goalkeeper" to an "arbitrator", you will get the CEO. The company has marketing specialists, logistics, production director, and if the business is going well, they are constantly in conflict. The CEO, as a respected arbitrator, if required (it should not often be so in a good company), will settle the conflict, even if someone lose something. And this is an extremely important function.

Yevgeny, do you have to play a role of arbitrator as well?

YE.R.: I agree that there are situations when you need to act as an arbitrator, but disagree that it is good. The less of these situations occur, the better. Not because you have to "kill" the conflict, but because it is necessary to solve by means of the other instruments. There is the most important soft foundation - corporate culture and values. If people do share these views, this basis allows them to cooperate, despite the different conflicting roles. Hard foundation is a physical, organizational structure and processes. We came across this in Corum, when the company was still called "Mining Machines". We had constant difficulties. Each was solving their local problems, resulting in infinitude of conflicts that had to be constantly coped with. Later we moved consciously to a divisional management model, and everyone became responsible for his financial result. The number of such conflicts reduced by two orders of magnitude.

P.CH.: They were likely to come more seldom to you, whereas the number of conflicts did not reduce inside the divisions.

YE.R.: We have a slightly different model of the company, parameters are not set from “upwards” There is a strategy as a guide – the CFO decomposes the strategy, but at the level of the budget message, rather than setting targets. The budget is developed from the bottom upwards. You should not necessary kill a healthy conflict of interest, it is better to solve it by means of the shared values and organizational structure.

P.CH.: In fact, we complement each other. Conflicts should be, but in the proper amount. If there are too many, they would collapse the company. But if there aren’t any - it is also unhealthy. Conflicts move the business forward.


Petr Chernyshov , 45 years old
Ex-CEO, Carlsberg Ukraine
Graduated from Ural State University. At first he became CFO in 2001 at ВВН Company. In 2002-2004 he was СЕО of Vena Brewery. In 2005 he became an СFO of the brewery company “Baltika”, Russia. In the same year he was appointed the CEO of Carlsberg Ukraine, and later the Vice-President for Eastern Europe.

How, being СЕО coming across the unknown, do you overcome your fears?

P.CH.: It is typical of each person to have fears – and this is right. If a man is fearless, he will not live long. When I was appointed a CEO in 2006, I had bad nights for almost two years because I was afraid that we would not have enough money to pay salary next month. The main thing is that your fear would not be transmitted to the subordinates; you have to be very confident in front of them. If “Akela has missed”, people believe that everything is terrible at the company, and the best start to leave. In this case it is important to sometimes show weakness (play a role) - to talk about your real errors (post factum). Because if you're trying to show that you are not wrong, and never have doubts, they would not believe you.

YE.R.: “Fears of a result-oriented man and fears of a man with a pronounced motive of power are different. Those, who seek to achieve, consider any difficult task as a challenge. But it happens so that a person does not know what he fears, and then he gets much more nervous. Uncertainty scares, but when you gather information and understand how events will unfold, the fears reduce. And I do not agree that you should always "keep straight face". There are situations in which it is permissible to say "I do not know how we will solve this problem, but I believe that we will find a solution”.

You have different stakeholders. Owing to which of your qualities do you think they decided that you are ready to the first line responsibility?

P.CH.: Both a local oligarch, and a president of Western corporation are always looking for a leader. Leadership is the ability to lead people, or the ability to make people do what you need, thinking that they want it themselves.

YE.R.: In my case they saw a little Hannibal – a person who is able to encourage people to cross the small Alps according to the principle “When I see the goal, I see no obstacles”.

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