CFO THOUGHT LEADER

The Goldman Sachs “anti-raid” team was between conference calls with an embattled client company when word came that a senior member of the target company’s management team had unexpectedly died.

Looking back, Tom Fennimore says that the next few months of his early career years at Goldman then became a transition point—or period of accelerated learning.

“It was a very sad situation—they were in the process of being raided,” explains Fennimore, who lists the anti-raid transaction as one of two times when Goldman ultimately offered Fennimore an opportunity to “step up.”

The second example came after the resignation of a managing director responsible for the bank’s automotive sector.

“I got a battlefield promotion when they said, ‘Hey, we want you to do this, and—depending how you do—we may not replace you,” recalls Fennimore, who notes that while he savored the opportunity and enjoyed success in the role, certain parts of it had little to do with his skillset.

“I have a little bit of a baby face,” points out Fennimore, who also comments that members of management teams within the automotive sector were known to value seniority and often had lengthy tenures of multiple decades themselves.

Perhaps not surprisingly, Fennimore remembers one bit of related post–board meeting feedback with a little bite: “’Hey, look, you did a great job,’ they told me,” he reports. “‘The board loved you, but they did have one comment: This guy’s too young. They would feel a little more comfortable with somebody with a little more gray hair in the room.’”

As for the embattled client company that had unexpectedly lost a key member of management, Fennimore’s youthful appearance turned out to not be enough to deter an invitation for him to fill the company’s sudden management void by relocating to Toronto for a number of months.

“The person who passed away was in the middle of the transaction, so it reflected in a good way on me that the client had enough faith in me to have me go up there to live and help them to get things done,” explains Fennimore, who more than 20 years later is not yet sporting any gray hair.

In conclusion, he adds: “It’s great to be given a lot of responsibility at a young age, but there will be some unique challenges. You try not to take things personally and to just move on.” –Jack Sweeney

It’s no secret, professionals from various departments must work together to correctly calculate Customer Lifetime Value (CLV), Customer acquisition cost (CAC) or Lead-to-customer ratios. This episode we explore how collaboration and communication is always essential to ensure these calculations and others take into account all relevant factors.

This episode features the FP&A insights and commentary of CFO Thomas Fennimore of Luminar Technologies, CFO Jared Poff of Designer Brands, and CFO John McCauley of Calendly.

About our Guest Host: Soufyan Hamid

FP&A troubleshooter Soufyan Hamid helps finance teams primarily in two ways:

First, he works as an FP&A project leader or team member on mid to long term assignments

Second, he helps finance professionals take their presentation skills to the next level

Visit Soufyan's website or connect with Soufyan via his LinkedIn page

Back in 1993, Don Alvarez was an auditor with Deloitte’s San Francisco office when specialty retailer and coveted client company West Marine went public.

For Alvarez, the day began with WM’s management explicating the novel steps behind pricing its offering, which was followed by the requisite trip to a Bay Area printer.

The long day turned into a long night, so there was little hesitation on Alvarez’s part when West Marine’s CFO offered him a lift back to the accounting house’s office. 

Still, the night would turn out to have even more to offer the young auditor. Alvarez remembers that as they were arriving in downtown San Francisco at about 2:00 a.m., WM’s CFO suddenly pulled his car over to the curb and turned to him.   

Recalls Alvarez: “He looked at me and said, ‘I am now the CFO of a public company and I have no talent in my organization with public company experience—will you come and work for me?’” 

Looking back, Alvarez reports that he did not hesitate to issue a “yes” right on the spot, which was a welcome reply that put in motion a formal job offer that allowed him to land inside the retailer’s controller office in the following January.

Of course, the retail landscape was about to be altered as Amazon (established in 1994) and other shopping destinations began to appear online.  

“I heard Amazon coming, loud and clear,” notes Alvarez, who would exit WM in 2007 to step into the CFO office at a dotcom retailer known as FatBrain.com.

“We were selling technical reference books on the Internet, whereas Amazon was selling all books,” remarks Alvarez, who adds that he was only 32 when he became FatBrain.com’s 30th employee hire.

“We were told that we would be taking the company public in 18 months, and instead we took it public in about nine,” comments Alvarez, who still marvels at the notion of an economy where capital seemed to be available around every corner.

Says Alvarez: “I remember being chastised by a venture capitalist because I was too prudent with money—he gave me a lecture on how these were unprecedented times and all that we needed to do is spend, spend, spend.” –Jack Sweeney

Not unlike many of his CFO peers, Jeremy Klaperman spent the early years of his finance career in trying to rectify the damage brought on by the irrational market behaviors of the late 1990s and early 2000s. Unlike most, though, he found that his repair duties frequently involved visits to a remote Japanese fishing village.

“A lot of the work in investment banking during that 2001 to 2003 time frame involved picking up the pieces of all of these different failed businesses,” recalls Klaperman, who shortly after joining Goldman Sachs as an analyst in 2001 was bequeathed a lengthy “to do” list related to the 2002 bankruptcy of telecom giant Global Crossing.

As Internet traffic projections in the late 1990s had continued to spike, Global Crossing’s undersea cable business had helped to boost the firm’s value to $47 billion by 1999. Still, the business had never had a profitable year, and as headwinds from the dotcom bust bore down, staggering losses and an accounting scandal followed. 

For Klaperman, the “cleanup” began wherever the undersea cable ended.  

“I found myself trying to sell this subsea cable station built in the middle of a remote Japanese fishing village,” reports Klaperman, who was tasked with completing the due diligence behind Goldman Sachs’s efforts to sell portions of the undersea cable itself or giant substations or both.

“It then became apparent to me how bad business decisions can be made when you overextrapolate the current environment or don’t appreciate the cycle,” observes Klaperman, who adds that his days of working with the fishing village in mind enabled him to better appreciate the stiff price of “overextrapolation” as well as the nuances of the local economy.

Remarks Klaperman:  "If you like uni or sushi that village was the sea urchin capital of Japan.” 

Our resident thought leader Brett Knowles explains how artificial intelligence is already being used to predict employee turnover, job satisfaction, and other key metrics, allowing managers to take proactive steps to improve employee engagement and retention.

Brett & Jack discuss how AI-powered performance management systems are already tracking employee performance and are providing feedback and guidance to help employees improve.

This episode features the workforce insights and commentary of CFO Tom Fennimore of Luminar Technologies, CFO Steven Mitchell of Redgate Software  and CFO Jared Poff of Designer brands.

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 process

Observes 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