Maximizing Impact: The 80-20 Rule in Business

This chapter explores the application of the 80-20 rule in financial decision-making and operational strategy, emphasizing the identification of key levers for maximizing benefits. It also covers effective hiring practices, the importance of management capabilities, and the dynamics of sales compensation, all intertwined with a personal anecdote that adds a relatable touch to the discussion.

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In this episode, CJ sits down with Rob Paterson, CFO of Employment Hero, to talk about smart growth, why not all revenue is good revenue, and Australia's startup scene. They start by discussing when to turn down growth opportunities and which financial metrics are more distracting than helpful. Rob explains the challenges of holding people accountable when you are a growth CFO and how to be a Chief Reality Officer instead of a “CF-No”. He offers a view into the Australian startup ecosystem, highlighting what sets it apart, the challenges local founders face, and why global expansion from day one is a must. Rob also outlines his approach to forecasting and cost control, including how he applies the 80/20 rule to revenue, before sharing a wild fraud story from his auditing days.

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@cjgustafson222 (CJ)

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TIMESTAMPS:

(00:00) Preview and Intro

(02:18) Sponsor – Vanta | Tropic | NetSuite

(07:06) Not All Revenue Is Good Revenue

(14:09) Metrics: Overrated and Underrated

(16:14) Sponsor – Planful | Subscript | Rippling Spend

(20:18) Lifetime Value (LTV)

(20:11) Vertical and Horizontal P&L

(21:27) Chief Reality Officer: Holding People Accountable