Adam Larson: 00:05

Welcome to Count Me In. In today's episode, we're joined by Rashid and Satish, two accomplished finance leaders navigating the fast paced world of oil and gas in The UAE and luxury retail across multicultural teams. Together, they open up about the challenges and opportunities facing finance professionals in times of intense disruption, from geopolitical instability and finance change shocks to the rapid adoption of AI and dynamic forecasting. You'll hear powerful insights on leading with resilience, building cross functional task forces, and transforming the finance function from back office store to true strategic business partner. So whether you're a CFO, Finance Leader, or an aspiring business professional, get ready for actionable advice on cash flow management, scenario planning, communication, and growing your strategy before the disruption strikes.

Adam Larson: 00:55

Let's get started. Rashid and Shateesk, thank you so much for coming on the podcast. I'm really excited to have you. You know, both of you have built your careers in finance across the pretty dynamic industries. You know, Rashid, you are embedded in oil and gas in The UAE and, Satish, you've navigated through fast moving goods like luxury retail.

Adam Larson: 01:18

So maybe we can start with taking me back a little bit to what drew you to finance and what has worked in shaping in this region and shaped how you think about leadership? Shateesk, why don't you take that, start off first?

Nataraja Shateeskhanna: 01:29

Yeah, thank you. Thank you. It's a great pleasure, you know, joining this discussion. See, finance, I think from the beginning, it was a kind of fashion into me. So that kind of, you know, brought me into this.

Nataraja Shateeskhanna: 01:42

What is really interesting is, you know, whatever decision that we make, you see the kind of, you know, immediately the outcome, whether it's in a in a customer basket or in a shelf or as, you know, kind of margin enhancement to the to the company. So that that's really, you know, kind of encouraging. You you you see the results of what you are really doing. Right? So that that's and and also, finance, you you touch, you know, with all the points in the the company.

Nataraja Shateeskhanna: 02:05

Right? So you become a kind of, you know, change agent within the company. So, that's really interesting. And, you know, working in the region, you know, it is really, you know, it's a different region, you know, which is very, you know, multicultural teams. And you're leading, you know, people with completely different background and working styles.

Nataraja Shateeskhanna: 02:22

Sometimes, in the same meeting, you'll have, you know, different culture of, you know, sense and, you know, people's comments as well. Right? So that that really taught me, you know, early that there's no single kind of leadership style that worked for, you know, everyone in the room. So, it's really shaped the philosophy of my leadership around it's being, you know, flexible, adaptable, and reading what the team in front of me is required. So, it's not just the business needs, it's end of the day people needs.

Nataraja Shateeskhanna: 02:50

Yeah. Thank you.

Rashid AlKhoory: 02:51

Thanks for having me on. Adding to, Shateesk, you know, what drew me into finance actually is not only crunching numbers, but let's imagine the finance function within a company is a car. So finance would be the engine of the car that linked to the operations, to the sales, strategic decisions, and expanding operations, and it will eventually translate all of these into planning and business analysis. Of course, being in the oil and gas sector is really key learning for us in this region, since it will create or we are exposed actually to very volatile commodity products that will change dynamically with the situation. So that's a key learning for us as a leadership, how to deal with this situation.

Rashid AlKhoory: 03:47

My key takeaway of this is basically, not always we have the answers, but we have the clarity to foresee the future in a clear manner.

Adam Larson: 03:59

That's awesome. Thank you guys for sharing that. And one of the big topics that we wanted to talk about today was definitely disruption. And that's something both of you are seeing in a very immediate way. You know, when things like geopolitical instability start affecting fundamentals of business, the supply routes, commodity prices, consumer behavior, You know, it can be jolting to financial leaders.

Adam Larson: 04:18

And so for for both of you, as you've kind of experienced that, what's the first thing you you do when when that starts happening to make sure that your team's in the right place, to make sure that you start leading from a perspective because it can be jolting and and scary for for your employees, for the and then also for the consumers and making sure that, you know, you wanna keep your business going forward.

Nataraja Shateeskhanna: 04:38

Yeah. Let me start. So global uncertainty has been, you know, building for a while now. So, even without anything change on the ground, for example, in our case, retail industry, freight and insurance costs keep moving. That's how fast the sentiment runs ahead of the fact.

Nataraja Shateeskhanna: 04:54

So, the first thing that we really need to do is getting the right visibility. Without that, you'll be really lost. So, getting the real numbers, real time, the timing is really, really keen as well before we react. Actually, what we did was we kept a kind of small internal task force, which running through the whole period. So, they had complete fact from various industries, just to filter what is real from the noise, because you get a lot of noises in these kind of difficult times.

Nataraja Shateeskhanna: 05:29

So you have to really separate that and get the real fact out of it so that you can make a right decision for the business. So that is the way we really manage the business these days.

Rashid AlKhoory: 05:40

So adding to Satish, I agree. I mean, in such situation is usually what we do. As first action is we don't back. We hold back and periods of disruption, information, and reassessing of the situation is really important. It's one of the key elements that, you know, will have for us an option.

Rashid AlKhoory: 06:01

So we have to regularly assess the damages. So what is the damage, for example, to the demand? How are we exposed to the creditors? How we manage all of this? And especially the most important thing is managing liquidity.

Rashid AlKhoory: 06:17

So liquidity is a fuel that runs within the entity and keeps it alive. So we as finance, we always gather this information and we have the task force and committee in relation with the operations and the sales that will provide the management with more than one fixed plan or one one.

Adam Larson: 06:38

And I can imagine how disrupting that will be and and making sure you keep cool heads and looking at everything from a holistic perspective as opposed to getting startled by just one event. You know, like, okay. Let's make sure that we have it. Like, I like that idea of having task force and making sure you keep things in place. You know, I wanna dig into liquidity.

Adam Larson: 06:55

Rashid, you just mentioned about liquidity. You know, how what does that look like protecting cash flow when maybe new cash isn't coming in as fast as you're used to and you have to make sure you keep running the business? What does that look like in practice as you're as you're kind of dealing with these issues?

Rashid AlKhoory: 07:08

Well, liquidity is like an option within a company. We don't appreciate it until it's under pressure on such a situation. In fact, we do have maintain our liquidity management long before any crisis that will appear on the horizon. So for instance, we do monitor the ratios, different ratios, such as current ratio. So to understand whether are we able to cover our short term liabilities with existing short term assets.

Rashid AlKhoory: 07:43

More specific ratio, which is the cash ratio eliminating any inventory involved, that will provide us with a clear picture whether we are able to cover our short term liabilities with that being cash.

Nataraja Shateeskhanna: 07:59

Yeah, just to add on to what Rashid has just mentioned, I think for me, it's all about the frequency more than anything. When, you know, things are really uncertain, and they are really, you know, still alive, we moved away from checking the, you know, catheterization on a monthly basis to a kind of daily basis because things are moving week to week. And in some cases, you know, on a daily basis, things have been really moving. And that is not just about, you know, watching it closely. It is about making sure you're taking the correct action to mitigate whatever the risk face it.

Nataraja Shateeskhanna: 08:32

And we had already kind of pre negotiated flexible terms with one of the key suppliers before this took place. So, that clearly gave us some sort of cushion to manage this kind of entire situation. And just a discipline, build whether your inventory or receivable, everything. You make sure that you have proper discipline to manage around it so that you can come out of the situation. That is where we managed it.

Nataraja Shateeskhanna: 08:57

Thank you.

Rashid AlKhoory: 08:59

What we do as well is adding to such things including accounts receivables and credit discipline. One of the most important thing is the CapEx discipline as well. So we distinguish virtually in finance proficient between maintenance must do CapEx and growth CapEx that, you know, with low IRR in comparison with the existing weighted average cost of capital of the company, which is the WACC. And for sure, we deliver usually the non critical projects. So we focus on the important CapEx.

Rashid AlKhoory: 09:33

We have a strict discipline with the credit management as well.

Adam Larson: 09:37

That's great. What about when you're looking at inventory? I know, Satish, you you work in retail. When lead times are stretching out, it's harder to get things on the shelves. What does that look like from an organizational perspective as you're trying to approach this, disruption?

Nataraja Shateeskhanna: 09:50

It's very critical question because we are into retail and especially the fashion, are the newness and the freshness is really, really important. Right? So, when they really the lead time is really stretched unpredictably, you have to think inventory buffers category by category. And fast movers need tighter replenishment. And slower premium items need longer runaway as well.

Nataraja Shateeskhanna: 10:14

So, honestly, the way our teams get it wrong is they normally treat the working capital issue as a finance issue. It's a kind of isolated problem. That is not the case. It touches procurement, merchandising, logistics. So, we have to really bring everyone together if you really want to address the overall working capital issue.

Nataraja Shateeskhanna: 10:34

So, what we again did was, you know, bringing a cross functional team together, and then they work very closely, and we kind of manage the situation well.

Rashid AlKhoory: 10:42

Of course, I mean, managing working capital is the most important. Where most of finance professionals might get it wrong is usually thinking of working capital is on the balance sheet only. Where in fact it's an operational driven that will be supported by finance. It's not the other way around.

Adam Larson: 11:01

Yeah. Can imagine how, you know, depending on the different products and and and having that working capital in place, but then also making sure you have the inventory to reach the customers. The although trying to balance all those things can be very difficult in times of disruption. And what does that look like, you know, Rashid, like from a perspective from something as big as oil and gas, you know, what does that look like when, you know, your inventory starts to decrease because but but demand is still there? Like, how do you balance that as a organization?

Rashid AlKhoory: 11:29

Well, I mean, inventory, you know, is always on established by hedging products through different supply channels. So it's not dependent in oil and gas usually on one supply. It depends on international and local suppliers as well, with different channels that will have access to different ports, railways, and visits.

Nataraja Shateeskhanna: 11:52

Yeah, it's similar, but in our case as well, mean, we find, you know, kind of alternative, you know, arrangement. You know, there are other alternative ports. But again, you need to be make sure that you know the cost element. You know, can go to the alternative port, but your cost is really, you know, very high to, you know, manage your valuation as well. So, your margin production needs to be kind of maintained.

Nataraja Shateeskhanna: 12:11

So, that is how we had a partnership with various other retailers as well as make sure we are passing some of the cost to the consumer. So, it's a very difficult kind of challenge. But, you know, it should be a kind of very well thought, and you need to have the partnership with all the stakeholders so that you can manage this well.

Adam Larson: 12:30

You know, it's interesting as you guys have been talking, I I've I've realized that a lot of what you've been doing is you you guys have been put like, it's the the foundation is in place before the disruption happens. Like, Rashid, you said one thing where, you know, we had we made sure our cash management was in place, was ready to go and good before the disruption. So And maybe we can talk a little bit about what that, like, scenario planning and testing and stress testing looks like in your organizations when because you guys have done the work so that when the when the disruption happens, you're ready to go. You have a task force in place and you can deal with it head on as opposed to being working with where when it hits you're not ready for it at all.

Rashid AlKhoory: 13:09

Well, of course, I mean, planning is usually in the previous situations, you know, normal situation we would have, you know, the normal budget plan, which in some cases, in such cases, can be a static budget. However, having rolling forecasts, having rolling forecasts and stress analysis for all the items, including liquidity, will provide always and reflect resilience in our situation. So basically, one of the analysis is what if analysis. So the most important thing is not only I'm questioning what will happen during this situation. The question should be more practical and specific.

Rashid AlKhoory: 13:51

So what if oil prices drop by 20 to 30%, or increase by 30%, or whatever? You know, the freight costs double because of the regional shipping disruption. So all these inputs are taken into consideration. Accordingly, the stress analysis are monitored on monthly and biweekly basis to come up with plans. So whenever there is an alarming, immediately, for example, the credit hold, the credit management will be more strict, will be more secure by providing, for example, bank guarantees, letter of credits through the customers, or even credit insurance.

Nataraja Shateeskhanna: 14:32

Yep. Just to add on to what Rashid said, our case is very interesting because for us, the annual budget is no more relevant for the industry because it's very dynamic. So, what we had done even prior to this geopolitical situation, we have really implemented kind of AI based dynamic forecasting tool. So, that really gave us a lot of benefit. So, what that really does is that that really isolates what is actually moving.

Nataraja Shateeskhanna: 15:00

Is it cost or currency or genuine shift in the consumer confidence? So, that we can understand what is exactly the fact. And then accordingly, can readjust our forecast and working capital and all other elements together. It's not easy. We need a lot of data to do this.

Nataraja Shateeskhanna: 15:19

We have been gathering a lot of data prior to this challenge. And also during the challenge, one good thing happened was we had a very close tie up with industries. And so, the industry started sharing the data from the other retailers, and that really helped us to come up with proper stress testing and forecast as well. So, that was a good thing that happened during the the the geopolitics.

Adam Larson: 15:45

Yeah. I I think I wanna pick on what you just said, Rashid. You said, you know, the the yearly forecast is kind of gone out the window. You know, what does that what does that look like in your organizations? You know, like, are you what what type of tools are you using?

Adam Larson: 15:58

You know, Rashid, you say you're using AI to kinda help with that with those with those new rolling forecasts and then looking at forecasting a different way. You know, has has the traditional budget, you know, kind of just gone to the wayside completely because of how fast paced everything is moving?

Rashid AlKhoory: 16:13

Of course, I mean, AI is the reality nowadays. So we are trying to utilize, I mean, the maximum possibility of the AI functionality to understand the market ahead, to understand the prices with the consumer behaviors in terms of uplifting the volumes as well. So all of these inputs, I agree with Satish on running exercise month to month as a rolling forecast, that will predict immediately any abnormalities and anomalies that will provide the management with the time to action accordingly.

Nataraja Shateeskhanna: 16:57

Yeah, correct. I mean, just to add on to what Rashid has mentioned, I mean, the key benefit of AI is it really connects well with many systems. I mean, in our case, we have plenty of systems within the organization because of the retail environment. So, AI brings that proper predictability from all these networks and the data as well. So, that is really key.

Nataraja Shateeskhanna: 17:20

And because we need to take the decision fast. So, without, you know, kind of AI involvement, it's really difficult for us to do this kind of research. So, that really helped us. Yeah.

Adam Larson: 17:28

What was it like implementing something like AI? Because I know a lot of times organizations have to look at their data first, make sure their data is in a clean place and able to put good data into data into that AI to make sure it's building that. What was it like implementing that as an organization?

Nataraja Shateeskhanna: 17:42

I think it's it's critical to make sure that we are we need to understand where are we currently, you know, kind of standing. But but but the thing is you can't always expect for the perfect situation before you start AI. You need to identify key kind of priorities where you need to really and especially when it comes to finance, this is a perfect example because lots of things we do is either rule based or standard based, where AI can straight away come in and add a lot of value. But the important thing is the upskill of people. It's not just AI.

Nataraja Shateeskhanna: 18:16

You can bring AI, but then how do you really sustain and get the advantage out of it? So, what we have done here is, before implementing AI, we make sure that upskilling has happened before six months period. So, you know, team is ready. They went through, you know, many kind of, you know, training session with leading AI, you know, implementers, and then that came

Rashid AlKhoory: 18:40

Of course, I mean, adding to Satish, the most important thing is the quality of the data. I'm not sure that if AI has reached a place that is matured, you know, so the data input and quality has, that the AI will build on it has to be a 100% accurate. So based on that, you know, we can utilize AI, for example, for forecasting or financial modeling. Instead of doing that within two, three days or a week, it would do within, based on the correct, impulse within thirty seconds.

Adam Larson: 19:20

Yeah. It is difficult. And a lot of organizations are like people, leaders I've talked to are saying the same things you guys are saying. And there's another thing that, you know, we talk a lot about on this podcast is, you know, like CFOs, finance leaders, they're moving from like just the traditional finance steward, the person accounting the numbers to like a true strategic business partner. And so for both of you, when you, when you, what does that shift actually look like?

Adam Larson: 19:42

You know, shifting from that traditional finance, like, hey, I'm just I'm just a numbers guy as opposed to, hey, I'm a business partner helping the strategy of the organization. What does that skill set look like for you?

Nataraja Shateeskhanna: 19:52

It's it's it's less about technical accounting depth, Adam, anymore. It's it's more about understanding the customer, the the category, the competition, so that, you know, you learn the well enough point of view, not not just to report. Right? So at the core of finance, finance is moving from a value reporting role to kind of value creation roles. That is very, very important.

Nataraja Shateeskhanna: 20:13

So, to get into that, you need to really understand the business well so that you can really move as a business partner to the overall business. We are not just there to tell business you know, what has happened, you know, at the end. We are there to help and to decide what will happen next. That is where finance can really, really support the business. The finance team, you know, sit, you know, they used to sit next to the end of the decision.

Nataraja Shateeskhanna: 20:40

Now that is not the case. They sit, you know, beginning of the decision to support the CEOs and other business partners to take the right decision forward. That is where we are working now. It's just changing. But the important thing, again, the skill set.

Nataraja Shateeskhanna: 20:52

The skill set of the entire finance community needs to be upskilled as well to to get into, you know, this mindset.

Rashid AlKhoory: 20:59

Well, yeah, the the CFO position or role has evolved actually from being crunching numbers and managing Excel sheets and accounting standards alone, and to be primarily a financial tool into a true business partner with the business and operations. Side to side would be as an advisor to the c as trusted advisor to the CEO and the both. So here where it comes the most critical skill set for the CFO, which is the communication. When I say communication, that for the CFO to translate those complicated numbers into a clear central language for the decision maker, where they can assess the risk, have their options, and knowing the outcomes of those options.

Adam Larson: 21:47

Yeah. Can we talk a little bit about communication and how important it is as a CFO, as a leader? Because lot of folks are saying things like, hey, we need to be a better storytellers. We need to do that. What does that look like when you're trying to have better communication?

Adam Larson: 21:58

And is that a skill that you guys had to learn on the job as you rose up in the ranks in in finance?

Nataraja Shateeskhanna: 22:04

Yeah. I think from, you know, what Rashid, you know, mentioned, it's very critical for us to convert that very complex numbers to very simple, you know, story so that everyone can really understand. Because in finance, it's very complex as well. Right? When you when you when you when you start reporting some of the stuff, when you start presenting finance, it's boring stuff as well.

Nataraja Shateeskhanna: 22:25

So you need to make it very, very interesting. The other critical thing is you need to find out the right KPIs to present. That's very important. So, you can't just go ahead and present whatever numbers which are not relevant for the business. So, you need to find out the right relevant KPIs so that business can really benefit out of it.

Rashid AlKhoory: 22:49

Yeah, I mean, to that, CFO's role is to cascade down the company's vision into simple language, with actionable language as well, such as tasks and goals. Those goals were represented into tangible key performance indicators, the KPIs that each company, each department will have to achieve the overall company's vision. So that's a key element for the successful CFO.

Adam Larson: 23:19

Yeah. So let's say somebody's been listening to this conversation. They're they're realizing that there's a disruption coming or they're in their own disruption, and it could be industry wide, organizational or something they've never navigated before. What's a piece of advice you'd you'd want them to carry with them? You know, what's something that you're saying, hey, make sure you start this or what's the first step for them as they're as they're starting to go through those kind of uncertain times?

Nataraja Shateeskhanna: 23:43

Yeah. Thanks, Adam. So, I would really add two things. First, don't wait for certainty before you act. Because there's a moment early, you know, in any disruption.

Nataraja Shateeskhanna: 23:54

There are people freeze, waiting for clarity. Clarity isn't coming. And honestly, with everything still unfolding globally, that clarity may not arrive for a while. So, the ones who do well make the best decision they can with what they have today. And then, the second, you know, build your network before you need it because all stretch and it's very fast and very reliable information has come from conversation with someone you trust, not from, you know, industry report or from, you know, noises.

Nataraja Shateeskhanna: 24:26

So, it's very important to build a network so that you can get reliable information so that you can make proper decision when this kind of uncertainty happens.

Rashid AlKhoory: 24:35

Yeah, I would add two or three points as well. In business and companies' life cycle, you've got good days and bad days. So a successful company and organization that will have a strategy, a sustainable strategy, they would invest within the good days that while they face any pandemic or lockdowns or any crisis that we are living in nowadays, for example, they would have invested during the good days to have the resilience during the bad days. So for any management team or finance teams, my second advice would be is to adapt quickly and stay resilient. That's the most important thing.

Rashid AlKhoory: 25:18

The last advice is whenever such situations occurs, but the most important thing is cash and liquidity.

Adam Larson: 25:26

Yeah. Well, Rashid, Shateesk, thank you so much for coming on and sharing your insights with our audience. It's been great getting your insights, especially from a very unique situation that's happening in your geopolitical region, but also your, you know, your years of experience leading up to this moment have prepared you for that. And I appreciate you sharing your insights with our audience today.

Nataraja Shateeskhanna: 25:46

Thank you, Adam. It was really a pleasure to be talking to you.

Rashid AlKhoory: 25:48

Thank you, Adam. Pleasure having me.

Nataraja Shateeskhanna: 25:50

Thank you.

Announcer: 25:53

This has been Count Me In, IMA's podcast, providing you with the latest perspectives of thought leaders from the accounting and finance profession. If you like what you heard and you'd like to be counted in for more relevant accounting and finance education, visit IMA's website at www.imanet.org.