CFO THOUGHT LEADER

It was a little over 40 years ago when Steve Young first joined what would become Duke Energy, the giant electric power holding company headquartered in Charlotte, North Carolina.

“Not only has it been a long tenure, but also it is the only post-college job that I’ve ever had,” says Young, who first roamed the energy giant’s corridors as a finance assistant.

In the years that followed, Young says, he became involved in various finance-related projects as different executives sought him out because he had become recognized as a hard worker. One such senior executive, who sat inside Duke’s rates and regulatory affairs realm, approached Young about a staff position in the department.

“It was a smaller group and outside of finance, but from what I could see, the group intersected with the lifeblood of the company’s profitability and revenue streams and pricing,” explains Young, who accepted the position and in short order acquired the regulatory executive as a dedicated mentor.

Says Young: “This person was a tough, hardnosed executive who had a reputation for being that way.”

Years later, when the executive retired, Young advanced to his mentor’s position, a promotion that firmly planted him inside Duke’s executive ranks.

Along the way, Young’s regulatory focus and experience afforded him a keen sense of how the changing legal landscape would alter the industry in the years ahead.

“I was pulled into that process,” recalls Young, who says that back in the mid-1990s, he enjoyed a ringside seat as Duke pursued and acquired one of its early M&A targets, PanEnergy.

“Mergers were rare in the utility industry back then, and certain laws had to be repealed—they were, and other mergers have since occurred,” explains Young, who in the decades that followed influenced and championed a string of transactions that would reshape Duke’s business over time.

“I found it a fascinating challenge to pull the pieces apart, put the new pieces back together, and come up with a cohesive business plan that was understandable to the SEC, regulators, and shareholders,” remarks Young, who would find himself at the center of Duke’s M&A activities in the mid-2000s, a period during which Duke sold off its international and merchant businesses and merged with energy company Cinergy of Cincinnati, OH.

“All of this happened within 2 years,” says Young, who advanced into a number of organizational CFO roles during that period and was named senior vice president and controller for Duke Energy in 2006. He would be named CFO and executive vice president in 2013, following the energy company’s 2012 merger with Progress Energy—yet one more transaction along Young’s career path. – Jack Sweeney

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Among the more transformative chapters of Matt Briers’s finance career was his 3-year stint monitoring and forecasting margin performance inside Google’s UK operations.

“The core role was really to understand what was happening in the organization from a revenue and margin performance perspective and then help to operate the organization so that it could better drive that revenue,” explains Briers, who says that his responsibilities included an unyielding effort to expose new drivers of Google revenue “even down to keyword searches.”

“My role was to provide a hotline back to product in Mountain View,” says Briers, who notes that UK customers are known to be among the most advanced users of Google’s advertising offerings, outpacing users in the U.S. and other markets by as much as 3 years.

The insights gleaned by Briers and his team would become an important strategic voice for both sales and finance at Google and allowed Briers to add an impressive FP&A chapter to a career that up until Google might have advanced in any number of directions.

Still, his subsequent hire as CFO of TransferWise might have surprised certain finance career builders, given that Briers’s pre-Google career had largely involved consulting roles rather than traditional accounting or audit work.

Today, Briers says, his consulting background has routinely informed his finance leadership as he helps TransferWise’s finance function to sharpen its customer focus and collaborate across the organization.

Still, he admits that during his early days at TransferWise, his consulting past led him at times to too frequently focus on achieving “buy-in” across the organization.

Eventually, he reports, “the two founders told me, ‘Stop trying to achieve consensus—make up your mind and get on with it!’” –Jack Sweeney

Briers: In all my time in consulting, we spent a lot of time working with people driving mission statements, and I can't honestly tell you that I believed in it back then. But since joining TransferWise, it's kind of this slightly religious maniacal focus on mission, which runs deep, and it's pretty amazing.

So my challenge is how do I help on this mission of pushing the product forward, such that we get faster, cheaper and easier, for a wide range of customers. The things I focus on:  Are we growing? Are we getting new users? Are they putting volume through TransferWise? We know we're being used and we know we're useful if customers are engaged. ... But when I say volume, the amount of money people are sending across borders,  I worry about those metrics.

The second thing I worry about, is what's happening to price, so not just revenue, but price. Price times volume gives you revenue, but price isn't going down. Many CFOs might ask what is he talking about? Why does he worry about price and revenue going down? Surely you want to drive this up?

Well, actually, no, because if we're going to be successful in the future, we know that we need to get cheaper over time. Because we believe it can be done and we believe it should be done and we can solve this problem of hidden fees. That's equal to $200 billion and it gets paid to banks. So I worry about price. - Jack Sweeney

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Jacqueline Purcell’s path to the CFO office began inside an Australian law firm where as a young attorney she was advising corporate clients and their bankers on how to best address some of the legal hurdles that their M&A deal-making might confront.

At the time, her routine collaboration with different banking executives gave her a point of comparison to the seemingly less energetic legal world.

“They seemed to be having a little more fun and a lot more impact on the outcomes,” she recalls.

“This is what sparked my interest in moving into finance,” continues Purcell, who was soon headed to Stanford University for an MBA and then to New York, where she joined Morgan Stanley’s M&A practice.

“I spent just over 8 years there focusing on a full spectrum of mergers and acquisitions transactions,” comments Purcell, who says that it was during those years of M&A deal-making that she grew to respect the CFO role and the executives who filled it.

“CFOs were very often the ones in the driver’s seat for the deals, and they were just particularly influential,” notes Purcell, who realized that the CFOs across from whom she sat often applied deep operating experience to their decision-making.

Determined to add an “operations” stripe to her sleeve, Purcell would exit Morgan Stanley in 2017 and return to Australia, where she would step into her first CFO role at Culture Amp, a workforce management company headquartered in Melbourne. – Jack Sweeney

Back in the early 1990s, Steven Springsteel nabbed an interview for a CFO role with a high-flying tech start-up. At the time, he was controller for Apple’s worldwide manufacturing operations, but the buzz surrounding the brash start-up intrigued him, and the young but accomplished executive shortly found himself waiting to be interviewed by the firm’s CEO.

According to Springsteel, his interview aspirations quickly became somewhat tempered as he sat listening to a stream of expletives originating from the CEO’s office. 

Within minutes, the CEO’s door swung open and several long-faced engineers beat a hasty retreat, to be followed by a smiling and gracious Steve Jobs extending a hand to Springsteel.     

“I’ve heard a lot of great things about you! Can I get you something to drink? Are you hungry?” Springsteel remembers the legendary tech innovator saying before explaining the role that he had in mind for the CFO of NeXT, Inc.

Recalling the interview, Springsteel says that he felt that he had just met with “the nicest, most charismatic guy that you would ever meet in your life.”

Of course, Springsteel had reason to doubt first impressions, having for a number of years worked at Apple, where stories circulating about Jobs’s darker side were plentiful. What’s more, a book titled Steve Jobs & The NeXT Big Thing (Scribner, 1993) had only recently been published, and Springsteel had made a point of reading it prior to his interview.

According to Springsteel, the text relates the experience of an Apple employee who was hired by a very gracious Jobs only to experience his darker side a short time after joining the company.

Springsteel says that Jobs’s evil twin was only one of several issues that led him to look for CFO roles elsewhere. In the end, he says, “I just didn’t believe in the business model.” –Jack Sweeney

Springsteel: First, let me start off by saying that with every management role that I take there are four key operating principles that I run by, and I explain those to the team right upfront. The first operating principle is, never say no without giving options. It's very easy, particularly in G&A roles, when someone comes to you with a proposal to say, "Well, you can't do that. "Sorry, Jack. I know you want to spend that money or structure the deal that way. We just can't do that." But you're not adding value when you do that. But, if you can now have that conversation with Jack, understand what's the business result he's trying to achieve, work with him on developing options, now you're adding value. So the first principle that I sell is, never say no without giving options.

The second principle that I sell is, think in terms of the business. When someone comes and says, "Well, what happened that our expenses went up last quarter?" Let's say I have an answer of "Well, we had a large accrual for compensation." Well, that doesn't tell you anything. Give the business reason behind everything. Look behind the numbers to articulate the story of what happened that answers their question.

The next two are open communication. My staff, we're going 200 miles an hour, but everybody knows what the other people, the other groups within my organization, are always doing. That helps because then you can leverage. And then very often, somebody will hear something that sales is thinking about a promotion that affects maybe some other groups within my team that they didn't know about it, and so that open communication is key. Then the last thing is, no surprises. Bad news does not get better with age. Let's get it out upfront. We don't like surprises. Give me an early head's up on things, and if I have an early head's up, then I can help you. Or other people on the team can help you get past this, and all of a sudden, what was the negative we can turn into a positive. So, I start off with those four key operating principles.

It was the type of role that any recent business school graduate could envy—not because of the position’s title (Chief of Staff) or how much it paid, but because of its proximity to management decision-making.

The job is one that Bennett Theimann remembers well as he looks back on the days when he served as chief of staff for the president of Gruner + Jahr’s German magazine division.

“It exposed me to that sort of very-high-level strategic thinking. We launched magazines, we sold magazines, we bought magazines,” says Theimann, who very often found himself finalizing some of the documents that Gruner + Jahr management ultimately used to brief its board.

“My job was to help senior management translate their investment proposals, budget requests, or whatever they needed to get done, and very often they needed money,” explains Theimann, who adds that while the position was not officially a finance one, this early experience of being a “business case builder” later helped to propel him into a number of FP&A and senior business development roles.

Theimann, who would step into his first CFO role in 2005, has now occupied the CFO office for several early-stage companies, the latest being Applicaster, a SaaS developer specializing in app development and content distribution. –Jack Sweeney 

It’s a story that Matt Hagel likes to share as he networks with fellow finance executives and accounting types. Back in 2017—only days after stepping into a finance leadership role at the online prepared meals company Freshly—Hagel was reviewing the company’s chart of accounts when he asked himself: “Why is Plant, Property, and Equipment (PPE) under Operating Expenses?” As he soon learned, this stalwart accounting acronym has long led a double life and is also used by various industries (notably healthcare and food prep) as a shorthand designation for Personal Protective Equipment.

Three years later, the protective gear acronym is widely known from coast to coast—just like Freshly. In fact, since its PPE entry first drew Hagel’s consternation, Freshly has opened an East Coast kitchen and distribution center, an expansion that extended the firm’s geographic reach from 28 to 48 states and propelled its sales to nearly 10 times their early 2017 volumes.

“I inherited a finance and accounting team of three, and now I have a team of 30,” comments Hagel, who located many of his new finance and accounting hires at the company’s three distribution centers, the newest of which opened in Arizona this past April.

“From a cost accounting perspective, we have feet on the ground, so if any issues arise, our folks can quickly step onto the plant floor and determine the correct inventory number or provide whatever other information is needed,” says Hagel, who entered 2020 keen to sharpen his team’s focus on costs after years of marshaling resources and new plant capacity to accommodate growth.

Then COVID arrived. There’s little doubt that the pandemic has been an accelerant on the trend of consumers turning to online for shopping experiences like Freshly that promise safety as well as convenience. (Such was the case for online car seller Vroom, which after record sales in March and April moved quickly to go public in June.)

It’s enough to make you wonder whether Freshly management may be of a similar frame of mind.

Reports Hagel: "Freshly is focused on building the best company possible, one that will be ready for the public markets or remain as a successful private company." 

Perhaps momentarily escaping Hagel’s lines of sight is yet another option whereby Freshly is acquired by a giant inside the packaged goods space. Certainly, Hagel doesn’t have to look far when you consider that Nestlé is one of Freshly’s largest investors.

To be sure, Nestlé’s move to acquire a minority interest in Freshly back in 2017 was somewhat out of character for the food giant that is generally known to swallow its quarry whole. At that time, Nestle was the lead investor in a $77 million round of funding.

Just as the pandemic has accelerated the shift to online buying, so too has it appeared to draw Freshly and its big name investor ever more close.

“This has been open-office at both ends. We have had a really good dialog that has helped us both to be successful,” comments Hagel.

Back in March, Freshly engaged with Nestlé’s human resources team as it formulated its COVID response, which Hagel credits with having helped Freshly to avoid the mistakes made by other food industry players.

For one thing, Freshly hired a number of health professionals to begin taking employee temperatures at every shift across its different locations.

“The words ‘essential services’ weren’t even a term on March 9, and there was no way of knowing whether we would be shut down,” explains Hagel, who says that in the event of a state “lockdown,” Freshly has prepared printed laminated forms for each employee to use that would confirm their employment at Freshly.

As the pandemic bore down on different U.S. geographies, Freshly issued a press release announcing that Freshly and Nestle would jointly be donating $500,000 to Meals on Wheels America.

“What happened back in March was that there was a period of a few weeks when we had no new customers because there was so much demand by people who were already using our service,” explains Hagel, who adds that shelter-in-place ordinances quickly turned dinner clients into lunchtime customers.

“People just needed more meals, and this transition to be more of a lunch solution is something that we never would have imagined happening this quickly,” Hagel observes.   Sign Up for Our Newsletter

Inder Singh started off his professional life as an engineer, only to learn that the large engineering projects that he aspired to someday lead often faced as many financial obstacles as they did engineering challenges.

So, Singh says, he went back to school and earned an MBA in finance, allowing him to redirect his career down a path populated with unique and imaginative financing deals to support engineering feats as well as business transformations.

One of the more innovative financing projects that Singh has helped to champion came along in the 1990s, when he was working as a business development executive for AT&T Corp. It seems that the Kingdom of Saudi Arabia was looking to upgrade its telecommunications infrastructure—to the tune of $4 billion.

“Other companies were just offering typical bank financing. In our case, we said, ‘Let’s do an oil barter agreement,’” explains Singh, who says that the proposal involved having Saudi Arabia supply $4 billion of oil to Chevron Corp., which then would pay $4 billion in cash to AT&T, which then would build Saudi Arabia a $4 billion telecommunications network.

“If you just think outside the box a little bit, bring your engineering skills, and bring some financial skills and common sense, you’ll see what makes sense for three different parties. And guess what? We actually won the deal,” comments Singh, who notes that the fact that Saudi Arabia may not have demanded such an imaginative financing solution is not important.

Says Singh: “The fact that we put it on the table made us stand apart.” And so it goes for Inder Singh, whose imaginative approach to financing deals over the years has routinely set him apart from his finance leadership peers. –Jack Sweeney

At the start of his finance career, Mark Sargent says, he could not picture himself working for a large, big-name corporation. He says that he was drawn instead to smaller companies, which he believed would be more accepting of “creative types” or those employees more prone to self-expression.

In Sargent’s case, an accounting and finance job was Plan B, or a “safety” occupation in case his aspirations to become a rock musician didn’t pan out.

Interestingly, it was Sargent’s deliberate avoidance of big business that undoubtedly allowed him to quickly garner some of the experiences that finance career builders long to add to their resumes.

“The very first job that I got was really a perfect fit: It was a small paper-making company, and I quickly learned that they were 9 months away from an IPO,” recalls Sargent, who was hired as a cost accountant but quickly found himself reassigned to oversee the implementation of a new accounting system intended to add some muscle to the company’s post-IPO reporting regimen.

This was the type of early career experience that later helped Sargent to open the door to more senior finance and accounting roles, such as the operations controller role he took on at Spectrian, a Sunnyvale, Calif., technology company. After years of serving government and aerospace industry customers, Spectrian, in the mid-1990s, moved to supply its cellular technology offerings to commercial customers in light of the growing infrastructure opportunities driven by cellular phone usage.

Not unlike in Sargent’s first career chapter, Spectrian went public within months of his arrival, increasing the demand for improved visibility into the numbers and challenging the finance team to routinely produce metrics that could help management to better set performance expectations.

“I really consider it my inflection point in becoming a CFO and a leader,” explains Sargent, who adds that it was his breadth of visibility across the company and his awareness of being part of a team of highly skilled finance professionals that whetted his appetite for more and turned his finance career into Plan A. –Jack Sweeney

CFOTL: You first arrived at EPAM in 2017, can you tell us what was top of mind as you entered the office? What were some of your early priorities? 

Peterson: I joined a company that was growing rapidly, that's got pretty solid profitability in it, a pretty capable finance organization. You kind of look under the hood, I guess, and what you're trying to do is make improvements without breaking anything. One of the things that happened is, the company had grown really quickly. And I think over a period of time sometimes you'll under invest in certain functions and I think that was probably the case with finance. I started by making some strategic hires, so strengthen the external reporting, the controllership and the tax schemes. And then from a reorganization standpoint, I've done a lot of things, but much of my career has been in FP&A, so I work with a head of FP&A who already had some ideas. When we organized the FP&A group, to not only support corporate leadership decisions, but to be able to take information, decision making down to the BU level and be more supportive of the different business units while of course continuing to support the senior leadership.

Then I would say one other focus I introduced and not only with the FP&A team, but with the broader finance organization is to really focus on being more future or forward looking. I introduced a regular cadence around forecasting and processes that I guess would allow us to identify problems or bumps in the road. And the idea was it would give us enough time then to do something about it or if we didn't do anything, we couldn't do anything about it, at least we knew what was coming. That's really probably what I brought to the company in maybe my first year here.

Back in 2004, on the very day that Ormat Technologies, Inc., began trading on the New York Stock Exchange, Eyal Hen began working in as an assistant controller for the geothermal energy company in Israel.

The transition to being a public company opened a transformative chapter not only for Ormat but also for Hen, who—after having been with the firm for only a few short weeks—agreed to relocate to company’s new Reno, Nevada, headquarters.

“It was a very small office at that time, with only seven people,” recalls Hen, who would for the next 11 years help to build out a U.S. finance team while accruing growing worldwide responsibilities for Ormat’s electricity-segment.

Along the way, Hen says, a number of unforeseen developments helped to advance Ormat’s steady U.S. expansion, including the U.S. government’s response to the 2008 financial crisis.

“Ormat benefited from the response after it received $600 million in cash grants to build renewable energy power plants,” explains Hen, while citing the American Recovery and Reinvestment Act of 2009, which stipulated that energy companies be offered government grants instead of tax credits.

“This was an enlightening moment for me, as it demonstrated how much impact a government can have when a company is prepared,” remarks Hen, who says that Ormat went on to build renewable energy plants in rural parts of Nevada and southern California.

After serving several years as a vice president of finance, Hen would leave Ormat and step into the CFO office for the first time at a life sciences company before being named finance chief for Rekor Systems. –Jack Sweeney