Worst Day Ever

Three CFOs share the lessons they learned from their toughest experiences on the job.

Since that incident more than a decade ago, Rone has been a stickler for intellectual-property protection. He established new recordkeeping standards at Archive and reeducated the company’s engineers on patent law. He now carefully reviews patent portfolios at each new employer. “A lot of times when I ask about patents, I get the response, ‘We’re in good shape,’ but often people haven’t really looked at it,” he says. He advises companies to examine their intellectual property at least every five years, and to keep their engineers abreast of changes in patent law. And Rone says the CFO should also have more than one contingency plan for any disaster.

What Doesn’t Kill You…

A truly horrendous day can lead a CFO to contemplate calling it quits. Greg Walker, now finance chief at software developer Magma Design Automation, says his worst day was so stressful it prompted him to take a career sabbatical. Accrue Software, a fast-growing Internet infrastructure business for which Walker was CFO, had scrambled to assemble a four-way merger of equals in a bid for survival in the sector, which was struggling in mid-2000. While Walker was on a flight to New York, where he planned to finalize the deal, the Federal Reserve announced it was raising interest rates by another 25 basis points. Technology investors, already skittish as they awaited both the outcome of the Microsoft antitrust case and quarterly earnings from bellwether Cisco Systems, bolted on the news. The market went into a tailspin.

As Walker’s plane landed, his cell phone began ringing. It was the worst possible news: the drop in stock prices had drastically lowered the four companies’ valuations, effectively scuttling the deal. Accrue’s stock price, which had been hovering in the $40 range, plummeted to the $20s. Within six months the shares were trading at $1. “Trying to manage the investment community with this news was a nightmare,” remembers Walker, who left the company in 2001.

Having spent several whirlwind years in the Internet market — including taking Accrue public in his first month on the job — Walker planned to retire. He “reluctantly” reentered the workforce in 2002, joining Magma only after determining that the company’s executives had a solid, Old Economy growth strategy.

He now speaks bitterly of the stock-market bubble and its much-touted “grow for broke” mentality. “Never decide your internal strategy based on what the investment-banking communities are telling you,” he says, noting that he saw many companies overspend to reach the number of users or viewers demanded by Wall Street. “You have to look at the underlying business model.”

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