Ruth Porat, CFO of Google and ex-Morgan Stanley, recently sat down with Bethany McLean of Vanity Fair to discuss her role as CFO at Google.
The YouTube video of their interview provides many insights for her perspective on how to help create long-term shareholder value while balancing the pressures for short-term profits.
Here are some interesting excerpts from the video:
Investor Management: “We view investors as our partners and stakeholders in the company and we understand they're trying to build financial model. What I try to focus on in my prior life in here is helping them understand how we think what are the building blocks that really drive our behavior.”
Cost-Cutting vs. Revenue Growth: “I don't think high profits necessarily correlate with creating maximum value over the long term. I think what we're really focused on is creating maximum value over the long term and so the way I talked about it… [is] consistent with the founders vision is to continue to drive revenue growth but that's not an excuse. I think I'm even framed it this way that's not an excuse for not focusing on expenses, and so when I talked about expenses it was about looking at the rate of growth of expenses ensuring that we have the same discipline focus on what is your expense base and how does it need to grow to support that revenue growth. I've said in my previous life he can't cost cut your way to greatness and so this wasn't about cost trying to cost cut one's way to greatness. It was about ensuring that we have the same very detailed disciplined approach to the growth in expenses making choices in order to optimize while still supporting revenue growth and it is about revenue growth.”
Financial & Operational Reporting: “It’s absolutely imperative that you need to build infrastructure before you need it. Your financial controls, your metrics, all of the dashboards you need. The metaphor that we used to use during the [financial] crisis is you wouldn't drive a car two hundred miles an hour with mud all over the dashboard.”