CFO THOUGHT LEADER

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

Jim Calabrese recalls that when he began to climb the corporate ladder early in his finance career, an executive mentor told him, “Never be afraid to make the coffee.”

This curious advice caught Calabrese’s attention, so the up-and-coming executive listened carefully as the mentor added: “As an executive, you need to be able to get dirty—to roll up your sleeves. You don’t want to be the person who can’t do a mundane task because you’re in love with your title.”

Today, as a CFO, Calabrese serves up his own bite-size mentoring verbiage in this way: “There’s nothing more valuable when you’re the CFO than understanding how the widgets are made—and being the person who’s willing to take on the challenging projects.”

Calabrese tells us that he reached the CFO office by aggressively pursuing projects outside the traditional finance realm while also signing up for long stretches on strategic planning teams, where he guided re-engineering projects in the energy and software sectors.

His strategic work—along with his operational “grinding and tinkering”—positioned the CPA/MBA hybrid to thrive as a finance leader, especially in his current role as CFO of Finalsite, a private equity–backed SaaS developer serving the education sector.

Whereas most finance leaders have shared a common view as accounting and finance milestones fell away in their rearview mirror, Wilson entered the finance realm from the merge lane – where his rearview revealed a roster of operational milestones and sales experiences. Having spent most of his early career altogether removed from the accounting cubicles, Wilson's operational experiences began supplying added luster to his CFO credentials. It’s no secret that as the CFO role has broadened, our CFO guests have been eager to highlight their operations experience, but as Howard Wilson’s career perhaps reveals, operations experience is no longer just a pit stop along the motorway of CFO career journeys. –Jack Sweeney

When does a mission-driven CFO initiate a crucial turnaround of an erstwhile nonprofit that’s been losing money for years and has a legacy pension plan dragging down its balance sheet? Before he’s even been offered the job. At least that’s how you take care of business if you’re March of Dimes Senior Vice President and CFO Dave Damond.

“I came in with a change management plan,” reveals the former KPMG auditor, who was a finance executive with American Red Cross before launching himself into his current role in 2018. “In fact, when I was interviewing, they showed me what the current table of organization looked like. And I said, ‘Yeah, that’s wrong – here’s what it should look like.”

Damond got the job, and immediately implemented his plan, which included replacing a 30-year-old legacy ERP installation with a cloud-based system (within a year), hiring new talent (including a controller) and addressing that drag on the balance sheet as interest rates fortuitously plummeted.

“We saw a lot of organizations were actually doing buyouts [of defined benefits pension plans],” Damond says while detailing the mechanics of his change plan. “It was something that we had to jump on right away, and we took that opportunity to offer buyouts to all of our people who were already retired.” The move saved the organization $20 million, adds Damond who also shares his take on cashflow analytics, fundraising KPIs, how he managed through COVID and the AI solutions that his finance group is considering investing in.

Talk to, or about, CircleCI CFO Chitra Balasubramanian and you’ll hear the word “team” early and often. The phrase describes her leadership approach and to how her finance group equips colleagues with next-level business and customer insights.

Current and former colleagues will tell you how much value (and fun) she brings to any “solve team.” And Balasubramanian refers to her “insights team” when discussing her group’s FP&A activities  at CircleCI, a continuous integration and continuous delivery (CI/CD) platform that helps developers do their work faster while ensuring high-quality code.

The key to delivering actionable business nights, Balasubramanian notes, includes creating clear problem statements and outcomes. When that clarity is wanting, Balasubramanian’s insight team clicks into exploratory mode. Once the financial analysts have gleaned what the business needs to make better decisions, it’s time to distill. “We don't want to simply relay a party bag full of information,” Balasubramanian asserts. “Our role is to deliver insights that are consumable and that immediately stimulate a productive dialogue among our stakeholders.”

That those financial analyses could influence shareholder value marks a touchstone career moment for Balasubramanian, who previously worked at RetailNext. “Finance teams have a lot of opportunities to lean in and drive the business forward,” she adds. “By looking at customer data from a finance perspective, we can glean new insights that help other business stakeholders actually improve the end-customer experience.” A focus on delivering beyond-finance insights is fitting given that Balasubramanian is the only CFO currently on the board of trustees team at the Computer History Museum in Mountain View, Calif.

Dan O’Shaughnessy may be the only finance leader with whom we’ve ever spoken who credits hard work and financial acumen with having helped to keep him out of business school. Or at least this seems to be what unfolded at Gymboree back in early 2015, when he accepted a job offer from the CFO of the children’s apparel retailer.

Explains O’Shaughnessy: “At the time, Gymboree had been taken private and was managing a significant amount of debt. I told myself that if we could turn around the business quickly, it would be a great opportunity, and if we couldn’t, then business school was always a good option.”

As it turned out, the retailer’s successful turnaround would require a Chapter 11 bankruptcy filing as part of a larger process that expanded O’Shaughnessy’s role into comptrollership, tax, treasury, and even supply chain planning and store operations.

Along the way, the finance executive was frequently tasked with dealing with the company’s creditors and investors.

“The creditors across the table with whom I had been negotiating aggressively one day became my board members on the following day,” reports O’Shaughnessy, who notes that the experience taught him “how to have professional conflicts but maintain relationships.”

Within a few quarters, the turnaround began to get some momentum, as the retailer sold off certain noncore assets and saw EBITDA grow by 50 percent.

For O’Shaughnessy, a former manager with Price Waterhouse’s M&A practice, the leap to the operations side of a struggling business likely provided more relevant lessons than he might have learned from attending business school. In the end, he says, “it opened up my eyes to how much I enjoyed the operations side of business.” -Jack Sweeney

CFOTL: Tell us about Formlabs, what does this company do and what are its offerings today?

O’Shaughnessy: Formlabs is in the 3D printing space and has successfully disrupted the 3D printing space. To give you some perspective on the industry, it’s not new. It’s been around for 30 plus years. This company was founded 10 years ago last week, and really took off on Kickstarter.

The whole model here is bringing a machine, a technology that I equate to the IBM old mainframes, hundreds of thousand of dollars, take up half of a room require an engineer to run, and put that onto the desktop. You’re now providing a technology that previously cost hundreds of thousands of dollars for under $5,000. As I like to put it, it’s so easy a finance guy can use it. It’s an out-of-the-box solution. 3D printing is a very complex technology, and the team was able to develop and manufacture an offering and a product that performed at 99% of these multi hundred thousand dollars machines at a fraction of the price.

I’d say my number one, two, and three priorities are to grow and scale the Formlabs business. Everything that we do from a finance perspective is in support of growing the business, delivering more value to our customers, and then how do we do you that? It’s engaging the team and driving alignment in trust. It’s getting the simple things right so that we don’t run around every day fighting fires. Sometimes it makes us feel good and important, but there are certain things that just need to run smoothly. So do that. Driving predictability. If this, then that, and here’s the different levers we have to pull. Then it’s really putting the right people in the right place to deliver the most value and grow the most personally and professionally in support of this infrastructure that is finance that enables the growth and, again, if done well, drives the growth in the business over the next 12, 24, 36 months.

Brett and Jack discuss the move by Amazon and other companies to pay employees daily are likely to trigger new approaches in salary administration. Plus, more developments in the age of the "great resignation."  Featuring the commentary and insights of workplace champions CEO Craig O'Neill of Versapay, CFO Michael Rosen of Digital Power Marketing, CFO Kurt Shintaffer of Apptio.

Minnesota-based Mann Lake Ltd. is a leader in the beekeeping industry, serving commercial beekeeping businesses and backyard hobbyists alike. The company specializes in quality manufacturing, innovation, customer service, and global ESG (environmental, social, governance) matters. “Bees pollinate one in every three bites of food that humans consume,” Mann Lake CFO Shana Rowlette explains. “Colony collapse is a real thing, and we’re very involved in helping our industry to address this risk.”

Her company’s unique realm and rapid growth quickly nudged Rowlette beyond the traditional bounds of the staff accounting role that she filled when she joined the company. “I started with payables, receivables, and inventory but steadily took on more responsibilities that showed me how everything functioned as our company grew,” she notes. “It’s been 11 years, and I haven’t had a boring day yet.”

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As controller, Rowlette helped to shepherd the company’s purchase by a private equity (PE) firm. She educated her PE partners in the nuances of the industry’s pollination seasonality and weather-related risks while collaborating on acquisition targets to fuel further growth. This work resulted in Mann Lake’s acquisition of Stromberg’s Chicks & Game Birds. “Our ultimate goal is to become the one-stop shop for everything related to backyard hobbies,” says Rowlette.

Next year, Rowlette will play a key role in a major employee-engagement initiative in addition to helping to drive growth. “The fast pace in a rapidly growing company can be overwhelming at times,” she observes. “You have to take a deep breath each day and prioritize what’s most important to the company. I also have a really good relationship with my amazing team. I was given a great opportunity by my former CFO to rise from being a staff accountant up to being a CFO. So, I make sure that we give our staff the ability to take on more and more while learning about the entire business.”

It sounds counterintuitive, but the best big men in basketball succeed less on size than they do on finesse and footwork. NBA Hall of Famer Tim Duncan’s right-foot jab created the space that he needed to sink his patented bank shot or fire a pass to an open teammate. The same holds true for data-driven CFOs who partner with founder CEOs in technology start-ups.

CallRail CFO Jim Morgan began his professional career by pivoting from Goldman Sachs to a 100-employee, venture-backed start-up in early 2000. Once there, he immediately helped to pivot the marketing-technology company’s business model in response to the looming dotcom crash. Since then, Morgan—a former center who co-captained Stanford University’s hoops team in the early ’90s—has served as CFO at a succession of venture- and private-equity backed high-growth companies.

“I love working with the entrepreneurs,” Morgan notes, “and I’ve learned that the CFO has a highly unique value prop to offer by facilitating the processes and scale needed to build a company from an idea.”

Besides scaling operations through detailed design and planning, Morgan’s facilitation takes the form of financial planning and analysis, M&A transactions, equity and debt fund-raising, board and investor relations, capital management, and more. He starts each day at marketing platform software developer CallRail by poring over revenue, product, and customer metrics on his morning dashboard, a tool that he continually finesses.

“There’s so much data in most organizations,” Morgan adds. “A huge part of the CFO’s role is to identify which data really matter so that you can elevate two or three next-level metrics.”

Steve & Jack discuss planning’s crunch time in the 4th quarter and the operationalization of FP&A inside different business functions. Featuring FP&A Insights & Commentary from Planning Aces: Sameer Ralhan, CFO, The Chemours Company, Chris Kuehn, CFO, Trane Technologies,  Laurence Capone, CFO, Pipedrive. Akash Palkhiwala, CFO Qualcomm.