2014 CFO Awards: Scott Smith, Silverado Investment Management Company
Chief financial officer - compliance and risk855 Bordeaux Way, Napa 94558; 707-253-1776; WGIMGlobal.com
Professional background: Various corporate and partnership accounting roles, Phoenix Leasing, San Rafael, 1985--1988; financial reporting, accounting manager, corporate finance manager, director brand finance and vice president of sales and marketing operations, Robert Mondavi Winery, Napa, 1988--2003; vice president of sales and marketing finance, Fosters Wine Estates Napa, 2003--2006; chief financial officer, Silverado Investment Management Company, Napa, 2006--current.
Education: B.S., business, San Francisco State University
[caption id="attachment_96414" align="alignleft" width="240"] Scott Smith[/caption]
What do you see as the essential role of a financial leader in the current environment?: During the last eight years in my current role, the company has been under constant change, either from growth or ownership changes or both.
In managing this change, a leader must love a changing environment and communicate with all stakeholders. Employees, owners, lenders and other stakeholders must have a clear picture of what impact the changes will have on their interests. Communication is sometimes difficult when you do not have all the answers, but I believe stakeholders appreciate even limited information.
As events come into focus, continuing communication is vital.
What are the biggest changes you've seen in your industry?: In my 25 years in the industry, the biggest financial changes are vineyards and wineries becoming mainstream investments options for institutions and large beverage companies, and that change inspired greater financial rigor in the industry.
As an industry, we then needed additional financial and accounting resources in the North Bay.
Tell us about the particular challenges and opportunities your organization has met in the recent past?: Our organization has been fortunate to capitalize on investment opportunities since 2008. Our investment partners have been very supportive of growth during tough economic times, believing as we do that buying at the right time and selling at the right time are crucial to realizing a good return on an investment.
The challenges for us revolve around Mother Nature's delivering us good weather for a profitable harvest. We try to control as many variables as possible, but a freeze or rain at the wrong time has a major impact.
What advice would you give to young emerging financial leaders?: Find an industry you are excited by, as all companies need good financial leaders. Once in, volunteer for any assignment that exposes you to other aspects of the business besides accounting and finance. For me, that was exposure to vineyards, production, and sales and marketing. I use all the experiences and contacts in my work today.
What's the best advice for weathering today's economic environment?: Keep your leverage modest and continue to nurture your current customers while identifying new customers that you can help grow. We have many instances where a customer is small at the beginning and it grows to become very profitable for us.
How do you think your business will change in the next five years?: I believe the changes will continue to be more consolidation in all levels of the business. We will have larger companies as well as smaller and entrepreneurial ventures, but a shrinking number of mid-sized companies.
The mid-sized operations will have more difficulty competing in the marketplace and cannot be as nimble and flexible as a smaller operation.