CFO Leadership Matters: An Interview with Andrii Konoval

Our CFO Leadership Matters series explores the evolving role of Chief Financial Officers, delving into their challenges, strategies, and vision for the future. This series will provide insights into CFOs as financial stewards and strategic leaders, highlighting innovative approaches and leadership qualities that drive success.

What is your career background?

From high school, I wanted to work in finance and to become a CFO. I started working as an internal auditor and quickly realised this path would not lead to the role of CFO, so I decided to move into financial controlling, which was one of my most important decisions. I quickly grew to head of controlling and have worked in this role for several international companies. 

The second crucial decision and next step in my career was moving to Kazakhstan in 2015 joining ArcelorMittal Temirtau. Working in such a large company in the steel industry was a real challenge and gave me invaluable experience. The third important step was becoming the CFO of Kronospan Ukraine, supporting the Kronospan Group in its Eastern European expansion.

Can you share a significant achievement in your career as a CFO?

During my time as CFO of Kronospan, I developed numerous financial models and business plans for the construction of new production facilities and production lines that underpin more than €1 billion in completed investment projects across Eastern Europe. Alongside this, I also secured a €116 million loan from the European Bank for Reconstruction and Development.

What strategies have you implemented that have had the greatest impact on your company’s financial health?

I have developed and implemented strategy in cash flow management and working capital optimisation, which included raw materials and finished goods stocks rationing by days of production, rationing of spare parts stock, optimisation of payment terms with suppliers and accelerating receivables collection.

Additionally, I have also implemented cost centre-based planning and analysis, which resulted in better cost assessment, control and savings.

For investments, I have developed robust financial models, which have been used for precise analysis of potential investment projects, such as new production facilities construction.

Furthermore, I developed and implemented a project financing strategy using external financing, which led to an increase in the number of projects and a two-fold increase in EBITDA within two years.

How do you measure success in your role?

I always measure success by different financial and non-financial metrics. In financials it is normally EBITDA/EBITDA margin, FCF/FCFE, ROI, working capital metrics and others. Strong attention is paid to the budgeting process and meeting forecasted figures.

Another important indicator of success is related to the team. I believe success is when the team can operate independently, demonstrating a high level of maturity and decision-making.

How has the CFO role evolved over the years?

Approximately 15-20 years ago in Ukraine, CFOs were essentially chief accountants with minimal planning and controlling functions. Over time, the role of finance director began to evolve. It now encompasses strategy, scenario analysis, investment projects assessment, product margin analysis, risk management, liquidity and working capital management, and so on. It is definitely not just about accounting and reporting. 

What are the biggest challenges you face as a CFO today?

The biggest challenge is the ongoing war. Companies are facing significant destruction due to missile attacks, especially in eastern parts of Ukraine. Additionally, there are high inflation rates, high borrowing costs, labour shortages, increased tariffs, and rising raw materials prices.

Numerous supply chains have been damaged or destroyed and attacks on our energy system has caused increases in electricity prices and supply instability. International capital markets are almost closed for Ukrainian companies, and it is impossible to ensure production facilities or other property against military risks. 

How do you navigate economic uncertainties and market volatility?

In Ukraine, you always operate in some level of uncertainty, so you must be very adaptive. Currently, the level of uncertainty is rather high and so I use scenario planning to help company management make balanced decisions. 

In our conditions we focus on diversification in the supply chains and sales markets. Exporting to various markets helps mitigate the risk of losses from national currency devaluation. Businesses must be very careful with stock building. Managing working capital and liquidity is even more critical in these conditions.

How is technology transforming the role of the CFO?

Technology help with the automation of processes, giving finance teams more time for strategy and analysis. ERP systems like SAP are now widespread and AI tools have entered the scene.

For most of my career, I’ve been working in international groups supporting high levels of automation and internal processes. Automation and technology free up time for analysis, increase business efficiency, allowing focus on important issues and strategy.

What innovations in finance are you most excited about?

I would highlight AI and machine learning in finance, central bank digital currencies and decentralised finance. I believe we are on the verge of a major revolution in finance, when many processes in finance will be performed with the help of AI, including forecasting using Big Data. AI is a great assistant for processing large amounts of information, but its capabilities are not yet fully utilised in finance.

What leadership qualities do you believe are essential for a successful CFO?

Strategic thinking and a broad perspective, along with strong financial planning and project management skills, are essential.

Effective communication at all levels is pivotal, especially as the role progresses. Managing people often proves more challenging than financial reporting.

What advice would you give to aspiring CFOs?

I would advise setting clear goals and staying focused. Develop your team - it doesn’t matter how cool you are; without a good team you will lose. Develop and introduce an atmosphere of trust and openness in your team. Take responsibility, be open to constant changes, and be a business partner to the entire organisation.

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