Meet the CFO: Steve Wearn FCPA

Steve Wearn

The CFO of Defence Material Organisation (DMO) shows why sound financial thought helps keep Australia safe.

Australia’s DMO spends A$48 million a day on everything from underpants to submarines in support of the Australian Defence Force. Steve Wearn FCPA describes his role.

Role

Defence Materiel Organisation (DMO) is responsible for the acquisition and sustaining of equipment for the Australian Defence Force. We manage some of the most technically complex capital projects in the country, around 180 at any one time.

A “major” project is anything above A$20 million – such as the Joint Strike Fighter aircraft, worth over A$13.7 billion. Projects less than A$20 million are “minor” and we run about 60 of those. DMO buys everything from underpants to submarines. I have about 490 staff, all public servants, mainly in Australia, but also a few in Europe and the US. We have about 6000 employees in the DMO, a mix of military and civilians.

Budget

We spend about A$48 million on average every working day. If we were listed on the stock exchange in terms of value and what we do, we’d be listed in the Top 20 Australian companies. We’re charged with spending a lot of money and spending it wisely. With such a large budget, being constantly audited and scrutinised comes with the territory. 

Early days

I’ve been in the public service for 34 years, starting in the mail room. I’ve been in finance, HR work, training and policy development. I was CFO of both the Army and the Royal Australian Navy. Six years ago, I was managing the Defence budget – not a full CFO role, but a large chunk of it – when I was asked to do this [DMO] job three times. I kept saying no. Eventually I gave in and I don’t regret it. I enjoy it – it’s tough, but a great job. We’re doing a job necessary for Australia’s defence – and putting people’s lives at risk if we don’t get it right.

CFO skills 

Numbers are important, but a good CFO is like being a good chef – you must have all the right ingredients in the right proportions to get the best result. Numbers are an important ingredient, but by themselves they are bland and uninteresting. You have to understand what the numbers mean, then add to the recipe judgement, experience and leadership skills.

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Challenges

I’m in a public-sector management framework, but operate in a more commercial world. As a public servant, I have to account for every cent. Managing 180 major projects, each of which could have cash flow of up to A$1 billion a year, keeps me awake at night. If a project sneezes it can go from on-target to an in-year cash flow problem of A$500 million. Luckily, we haven’t had significant blowouts in any of our projects for at least six years. We are much more forensic in our approach, going into a project with tender-quality information.

Lessons learned

People are as important as numbers.

The people you work for and those you provide a service to are vital to your success. A key thing is to learn from bosses – good and bad. Learn from your mistakes and those of others. I’ve learned more from bad bosses than I have from good ones. And you’ve got to be able to accept a level of risk. 

This article is from the April 2015 issue of INTHEBLACK.

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April 2015
April 2015

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