CFO THOUGHT LEADER

It’s perhaps no surprise that the late 1990s came to mind for Anup Singh when we recently asked him to share with us a finance career lesson or insight from his past.It seems that our CFO guests have become ever more reflective on the period of years preceding the dotcom implosion as they seek to help their companies navigate the murky economics of the post-COVID age.“This was a time when many firms ignored the core fundamentals of a successful business model,” recalls Singh, who at the time headed up FP&A for Excite@Home, an new entity formed following the $6.7 billion acquisition of Internet portal Excite by @Home networks.Not unlike its acquisitive parent company, Excite@Home had an appetite for growth.  “We spent $1 billion to buy a company called Blue Mountain Arts, which had zero dollars in revenue, but the idea was to buy “eyeballs”—and the fundamentals just got away from us,” continues Singh, who in part was responsible for supplying analysts and investors external guidance as the environment for dotcom’s grew ever more  turbulent.“We were a casualty of the era,” notes Singh, who would become tasked with helping Excite@Home’s bankers, lawyers, and accountants to initiate a financial restructuring of company.Apart from succumbing to the dotcom era’s irrational business mind-set, Singh observes, Excite@Home also paid a price for a complex ownership structure that undermined its ability to achieve an alignment between its board and the company’s strategy.Having witnessed up close this strategic alignment failure, Singh made sure that going forward in his career, he was keenly focused on management directives that allowed executive teams to achieve strategic alignment.Such agreement, Singh relates, needs to center on simple statements such as “Here are the three bets that we’re going to place,” “Here are the products that we’re going to build,” and “Here are the markets that we’re going after.”This is a prescription upon which Singh has perhaps recently come to rely on more than once, as in his role as Illumio CFO he has sought to keep the software company’s ambitious international expansion plans in check and in step with the uncertainty of the current economic environment.  According to Singh, Illumio is now opting for “depth over breadth” and “doubling down” inside its largest overseas markets, rather than focusing on growing the overall number of countries within which it resides.    Says Singh: “We’re really trying to sharpen our focus and say, ‘Here are three markets on which we’re going to bet in the coming year.” –Jack Sweeney 

Steve Mitchell had not been working for Irish telecom giant Eircom for even half a year before he decided that it was time to explore other opportunities.For the previous 4 months, the seasoned operations executive had been commuting weekly to Dublin, Ireland, from his home in the United Kingdom as he sought to nurture Eircom’s waning mobile customer relationships.  However, Eircom’s CFO upended Mitchell’s plans by offering him the position of corporate finance director.“I went over there for a few months and ended up staying for 4-1/2 years,” recalls Mitchell, who still seems surprised by the CFO’s job offer. “I hadn’t even worked in finance during the previous 8 years.”Over the next 18 months, Mitchell’s responsibilities would expand to include investor relations, treasury, M&A, and running Eircom’s cap ex committee.Besides regularly delivering investor presentations, at one point Mitchell found himself before the European Commission, defending Eircom’s competitive position relative to recent telecom market consolidation.“Since those first couple of years with Eircom, nothing has really phased me,” remarks Mitchell, whose appointment came as Eircom was making the business case with its board and investors to lock in a first-mover advantage when it came to rolling out a 4G network across Ireland.  Given the breadth of Mitchell’s functional responsibilities, it soon became clear that he was also expected to rally the internal finance team to bring forth the financial insights required to move the business case forward.      “The finance people working on the fiber rollout business case could have either sat and fiddled with spreadsheets for months or else put the bit between their teeth and realized that they were about to drive the biggest decision that the business was going to make all year,” comments Mitchell, who adds that while his years at Eircom revealed to him the complexity of leadership decision-making, they also exposed how finance looms large.Says Mitchell: “A couple of really good pieces of analysis from the finance team ended up driving management and board decisions with regard to where that cap ex would go and whether we were ready to make the move.” –Jack Sweeney 

When Keith Stauffer’s youngest son learned in grade school that his family would be moving to Singapore, he likely breathed a sigh of relief.  After all, his older brothers had already lived in Spain and the United Kingdom, and it would have been only natural for the youngest Stauffer to feel that he had some catching up to do.“Although a lot of people hesitate on opportunities abroad because their kids are a certain age or are going into a certain grade, we have always taken sort of the opposite view,” comments dad Keith, whose finance resume is distinctive as much for its wealth of geographies as for its marquee brands.    A quick glance down his resume reveals both: Singapore (Hershey); Spain, the United Kingdom (Dell); San Juan, Puerto Rico (Procter & Gamble).Stauffer reports that it was back in the early to mid-1990s, when he was a treasury analyst at P&G, that his hand shot up for the first time.“I was at the tail end of my first assignment out of college, and I had my eyes set at an opportunity in Puerto Rico,” recalls Stauffer, whose stint there would allow him to boost his Spanish language skills as well as add the title of Plant Finance Manager to his resume.As the late 1990s arrived, Stauffer received a call from a former P&G colleague who had recently joined Dell who convinced him that the computer maker’s future growth path was rich with career opportunities both at home and abroad.Stauffer would join Dell at its headquarters in Austin, Texas where he began as a finance manager inside the manufacturer’s enterprise customer organization before being named controller of the company’s fast-growing K–12 business.Still, his offshore itch resurfaced.“I was 3 to 4 years into my career at Dell when I heard that they were seeking a finance leader to run Spain and Portugal and shot up my hand,” comments Stauffer, who in short order became CFO of Dell’s Spain and Portugal operations.Looking back, he marks his years abroad with as many family milestones as career ones.Says Stauffer: ”My oldest son, who is now 21, was 1 year old when we moved to Spain, and my second son was later born in the UK.” –Jack Sweeney 

August might be Patrick McClymont’s preferred month when it comes to entering the CFO office. “September is great, but you may want to show up a little before in order to get your feet wet,” comments McClymont, who last September became CFO of Hagerty, a once–stand-alone insurance agency for classic automobiles that has now morphed into an automotive enthusiast brand that in addition to insurance products also serves up to its car-minded customers a menu of “membership” programs and experiences.It should perhaps serve as no surprise that McClymont’s timing preference has everything to do with the industry’s annual planning process and the opportunity that it affords newly appointed CFOs to convert the fall rite into a learning processObserves McClymont: “You must ask not only ‘How do I learn from this?’ but also ‘What are my intuitions?’ and ‘What do we need to change?’”To better highlight the rewards of CFO timing, McClymont tells us about an earlier CFO chapter with entertainment technology company IMAX.Having joined this firm in August of 2016, McClymont found that the fall planning process enabled him with the insight necessary to more confidently signal a possible lane change during in his CFO stint with the company.In early 2017, only 5 months after stepping into the CFO role, McClymont began to see some negative trends within the company’s operational data, prompting him to raise his concerns with IMAX CEO Rich Gelfond.“Richard had this tremendous intuition about the business, so he kind of saw where I was coming from and said, ‘Okay, let’s closely monitor our performance on the next three movie titles that are coming out, and if we find that we’re not on track, then let’s have a real conversation,’” recalls McClymont, who adds that this approach provided him with an opportunity to set up an “early warning system.”  Besides the benefits that a CFO can garner from “learning while planning,” McClymont’s experience highlights the critical CFO–CEO relationship-building that transpired during the early days of his IMAX career.While he does not tell us whether a “real conversation” ever actually took place, McClymont does let us know that the conversation that CEO Gelfond had in mind would have involved IMAX’s stakeholders at large.Comments McClymont: “He said, ‘Go get ready for that real conversation now—we need to start working on what to do if we end up in a spot where we need to pivot.'” –Jack Sweeney 

Things were going downhill for David Quinn when he met his future wife—or such might be the obvious punchline to punctuate Quinn’s disclosure that he met his wife on a ski vacation. Still, Quinn lets us know that the timing of his match being made was in sync with the escalating financial crisis of the late 2000s—a grim environment that quickly fogged over the career trajectories of many banking executives.  Quinn, who was then head of FP&A for Citigroup’s UK retail banking operations, found that the timing of the growing crisis was to exact a stiff price. Along with five other “handpicked” Citigroup executives, he had recently completed an executive MBA program specially designed by Citigroup to springboard the bank’s next generation of leaders into upper management roles. However, regardless of the degree status of its targets, Citigroup’s leadership development effort suddenly lost its spring.“For me, the promised leadership role turned out to be CFO of Norway, which was not a big business for Citigroup at the time and at best would have been a sidestep,” comments Quinn, who opted instead to leave Citigroup and subsequently move to the United States with his new American fiancée.Quinn doesn’t appear to have ever second-guessed his paucity of aspiration to be CFO of Norway. In September of 2009, he accepted a position with Bank of the West, where within only a few months he was appointed head of FP&A.  Despite his successful employment transition, Quinn still seems mindful of the economic uncertainty that gripped the late 2000s.In fact, he recalls staring down on San Francisco Bay from Bank of the West’s boardroom one day while the bank’s CFO, sitting across from him, tried to “sell him” on joining the bank.Says Quinn: “My feeling at the time was that I just needed a job.” –Jack Sweeney

Back in the mid-1990s, before email became widely used across corporate America, the executives of Frito-Lay’s northern California region suddenly found their mailboxes full. “We were getting all of these letters from people asking, ‘What did you do? What’s going on in northern California?,’” explains Tom Fitzgerald, who at the time was finance director for the region, a geography known to be a sales laggard among Pepsico’s 24 business units, within which Frito-Lay itself was a particularly heavy bottom dweller. Thus, as Fitzgerald relates, there was no shortage of intrigue concerning a sudden and steady sales climb inside Frito-Lay’s northern California business. Looking back, he observes that the explanation of the phenomenon was not necessarily pleasing to neighboring regions, which were known to be on a constant lookout for cunning new sales promotions or incentives. “Northern California, oddly enough, was the only unionized market for Frito-Lay in the country. Meanwhile, we had a direct store delivery business, which meant that we went to every store at least once a week—and often every day—to merchandise and sell the inventory,” explains Fitzgerald, who notes that the “direct sales” approach afforded the region larger numbers of employees than other locales, which in turn allowed Frito-Lay to at times operate inside the region more like a “military organization.” Like those of many of his peers, Fitzgerald’s Pepsi career routinely opened new chapters as the packaged goods company rotated its finance executives into new regions and business units. Fitzgerald’s arrival in the northern California region brought a new set of eyes to Frito-Lay’s local challenges and paired the finance executive with a divisional leader who was prepared to listen. “I told the leader that too often the business had one answer one day and a different answer the following week. I said, ‘Let’s just pick three, and then we’re going to lock in and stay there,’” comments Fitzgerald, who credits a newfound focus and the regional leader’s willingness to collaborate with having propelled the snack maker to the top of the region’s 24 business units within 3 months. As for the details behind Fitzgerald’s “three answer” prescription, the finance leader reports: “Two were top line–driven, operational metrics that we could measure. The other was related to how our team worked and coached the frontline salespeople.” For Fitzgerald, the remedy was less about strategy and more about focus. “It’s not necessarily about how good your strategy is,” he says. “Frankly, there may have been three better ideas along the way, but because they changed the strategy and moved to the next thing too quickly, they couldn’t get all of their people aligned to execute it well.” Adds the finance leader: “I became a big believer in the notion that if you have an ‘A’ strategy but a ‘C’ execution, you’re going to miss your numbers every time.” –Jack Sweeney

When consultant Steve Player died last month at the age of 64, the business function that he had tormented, ridiculed, and war-hammered for more than two decades stood quivering in the shadows. Still breathing, the beast of a business process known as budgetary control had withstood its most notorious assailant’s heaviest blows—in itself a resounding tribute to those industry high priests who had given the process life in the first half of the 20th century. However, many agree that it’s only a matter of time before budgetary control succumbs to its many injuries and a proper warrant is issued certifying the death of a business function that may have served all of industry better had it lived only half as long. It’s just such an acknowledgment that makes Steve Player and others of his ilk appear to be as worthy of our acclaim as those who helped to institutionalize this business function in the first place. Perhaps it’s no surprise that both groups have been made up mainly of management consultants, a clan that I know only too well. Or so I thought, until I met Steve. NOW LISTEN - Jack Sweeney

The following is a Holiday Replay of a popular 2022 episode. Last October, shortly after being named CFO of machine learning start-up MOLOCO, Brandon Maultasch decided to forgo yet another welcome coffee to instead engage with a wide flock of MOLOCO employees on the virtues of discounted cash analysis. “The last thing you want a new people leader talking to the entire company about!,” confesses Maultasch, before launching a stirring defense of the fall discussion that he refers to as a “teach-in.”   “We have 65 data scientists and machine learning engineers at the company. If they can build the things that they build, they are smart enough to understand finance, which isn’t all that complicated,” remarks Maultasch, whose approach is notable as much for what it does focus on as for what it doesn’t. By exploring a framework for discounted cash analysis, Maultasch rejected the more traditional point of engagement for incoming CFOs: the company’s future IPO. “The IPO is an important milestone, but it’s not the destination,” notes Maultasch. “The destination is building a generationally important company that adds value in the long run. I wanted to make people understand that the durability of cash flows is what drives long-term value creation.” Once armed with a deeper understanding of discounted cash flows, Maultasch says, employees at large can bring forth more of the insights, processes, and technical solutions that are needed to move the levers of value creation. “I want to line align our conversations around durability and long-term margins. These are the levers that move our revenue, move our profitability, and move our position in the value chain,” he adds. According to Maultasch, an added benefit from “teach-in” discussions is that they sometimes expose what the finance team has gotten wrong. “Some of the things that we thought were inputs turn out to be outputs,” he observes, “so it’s this process of discussion, argument, and learning that aligns everyone toward building a great company.” –Jack Sweeney 

The following is a bonus replay of one of 2022's popular episodes. When Herald Chen was growing up in a town not far from Pittsburg, he dreamed of someday running the small town’s steel mill. Years later when he was graduating from the University of Pennsylvania, the steel mill no longer occupied Chen’s maturing career aspirations. “My two job offers were to either go make soap for Procter & Gamble at a manufacturing plant in Baltimore or go to Wall Street,“ remembers Chen, who adds that the offers for the seemingly different jobs came as a result of having graduated from UPenn’s Management and Technology program—a curriculum that offered a dual degree in engineering and finance. Chen chose Wall Street and in 1995 landed at KKR, the private equity firm that had feasted on leveraged buyouts in 1970s and 1980s. Recalls Chen: “I had a front row seat for meeting many CEOs and CFOs and invested behind a couple dozen of them, so I learned a lot about what the good, the bad, and the ugly look like in these companies.”   Twenty-seven years later, KKR can arguably be seen to have been the mother ship of Chen’s finance career, a place that over time he would leave and then return to as the investment house provided him with the wherewithal to open new professional chapters—the longest being from 2007 to 2019, when he headed KKR’s Technology, Media, and Telecom practice. Along the way, Chen demonstrated a rapport with C-suite members and company boards that distinguished him from other investors, a trait that led to a growing number of invitations to sit on different company boards. “I had figured out that I wanted to be building businesses, but I also knew that I wasn’t the smartest or brightest or most charismatic person in the room, so maybe the best way for me wasn’t actually sitting in the CEO seat but instead was investing and sitting on boards and helping CEOs,” comments Chen, who has held a number of board seats, as well as served as board chair for such companies as Internet Brands/WebMD, Optiv, Epicor, BMC Software, and Mitchell International.  With a boardroom track record that few of his CFO peers can match, Chen attributes his success in part to being a good listener.  “I would invest behind CEOs and CFOs whom others just didn’t understand—they just didn’t comprehend what these people were trying to do—because I would find that I could create a lot of value with them just by taking a little extra time to hear them through,” remarks Chen. When asked to offer advice for CFOs seeking to lower the temperature of certain boardroom discussions, Chen shares a story involving notable KKR financier Henry Kravis: “When I was at KKR, I made a mistake in some of the numbers one time. It was late in the transaction, at the point where on Wall Street you’d expect to get yelled at and there would be this big blowup—but I remember Henry Kravis just getting very calm and saying, ‘Hey, we’ll get through this and come out the other side.’” –Jack Sweeney

Brett & Jack discuss what might be a popular response to employees "quiet quitting" or what among managers has been dubbed "quiet firing" - the withdrawal of coaching, support and career development to an employee, which results in pushing the employee out of an organization. This episode’s featured Workplace Champions share their different perspectives on how to manage their organization’s talent as a collective unit. Brett believes that human capital pain points are challenging finance leaders to carefully reconsider how to best manage employees and forfeit dated models that may have treated employees as just another asset that can depreciate overtime. This episode features the workforce insights and commentary of CFO Brian Gladden of Zelis, CFO Razzak Zallow of Floqast, CFO Kevin Rubin of Alteryx  and CFO James Moylan of Ciena.