CFO THOUGHT LEADER

As the newly appointed CFO of agtech start-up Cooks Venture, Ankur Agrawal lists one of his favorite duties as designing menus. Of course, we are referring to the menu of performance measurements featured on the poultry company’s maturing business dashboard.

“One of the beauties that comes with joining a new company is that you get to build from scratch,” explains Agrawal, who says that he’s relied on some of his earlier experiences using dashboards at Pepsico and Blue Apron to help Cooks Venture to build a better one.

According to Agrawal, a successful dashboard begins with understanding what measurements are needed inside a company’s different business functions. At Blue Apron, Agrawal says, the firm’s finance leader improved the company’s dashboard design by first asking functional leaders across the company, “What are the two or three measurements that you are looking at?”

“Once he got that list from everyone, he said, ‘All right, now let’s create our dashboard.’ I’ve tried to take a similar approach in which we talk to people and try to understand what they need to see,” explains Agrawal, whose tour of duty at Blue Apron offered far more than lessons in dashboard design.

As a finance director for the innovative meal-kit company, Agrawal worked closely with Blue Apron’s cofounder and COO, Matt Wadiak, who left the company in 2017 to establish Cooks Venture.  

Says Agrawal: “We had worked closely for four years. We had a great partnership and complemented each other very well. We had been talking for a while, so when he started this company, essentially it became the right time for the business and for me because I had been looking for the right opportunity.” -Jack Sweeney

Along his path to the CFO office at technology firm Trintech, Omar Choucair’s segue from radio to high tech was among his most consequential career transitions.

“There were not a lot of radio companies based in Dallas, Texas, at the time, and there was this young but growing tech company. While it was a calculated risk on my part, I liked the people, and the executives were hard-charging, which I also liked,” says Choucair, when asked to recall some of the decision-making behind his leap to the high-tech realm.

Today, as Trintech’s finance leader, Choucair has a list of CFO priorities that includes making performance measures more accessible across the organization.

When it comes to Trintech’s approach to FP&A, Choucair is typically analytical: “I think that the bones are there and the data are there, but the difficult part lies in organizing the FP&A team around the question of how we get this put together into a form that people can really look at and use to make decisions.”

Choucair says that he wants people to second-guess the factors currently driving performance and that they should be routinely asking the question, “Why did this happen last week or last month versus three months ago?”

One recent development that is helping to energize performance measurement at Trintech as well as across the Software-as-a-Service (SaaS) realm is the broadening publication of KPIs.

“Today, versus a couple of years ago, we now have many of these public companies publishing their KPIs through their Investor Day presentation decks or their 10-K and 10-Q financial filing disclosures. So there's a lot of information that we can now mine in order to track how we’re doing when compared to everybody else,” explains Choucair.

CFOTL: Tell us about your experiences inside the high tech industry? Choucair: Trintech is my third technology company as CFO. Immediately before this, I was with a software company that was another private equity–backed firm that sold digital advertising on a subscription basis. We had a platform that was a B2B play and very competitive with a lot of the other technology companies that were selling into B2B with marketers all across the U.S. Before that, my first CFO opportunity was with a technology software company that distributed TV commercials and other short-term content on behalf of advertisers and marketers to television stations and cable outlets. So, I’ve been in an interesting space in that I’ve been in three different technology companies and the last two were SaaS. The first one was software, but it was sold by the drink.

I think that what’s interesting about this business is that there’s a significant opportunity on the large enterprise side. The office of the CFO has changed tremendously in the sense that there are so many different applications that you can bring to automate a lot of the functions, whether it’s your financial planning, your tax compliance, and so forth. It could be your payroll; it could be your travel; it could be your HR. With all of these additional SaaS-based applications today, maybe only a third or 25% of them were even available two or three years ago. In terms of where we think we are today, we think that we’re in the second or third inning of what we can do with the office of the CFO in terms of automating and creating this ROI for CFOs and automating the way that they close the books.

Nestor: Energy Focus is an LED lighting and controls company. LED lighting is like comparing a smartphone to a rotary phone. LED lights are actually extremely high-tech—it's almost like having a laptop inside the light. If you were to take one apart, you would be amazed at how many computer components and wafers and chips are in there. These lights are not a commodity. They are very differentiated. Unfortunately, the industry historically has sold them very much like a commodity, through the same channels as fluorescent and incandescent lights. Energy Focus does not. One thing that sets us apart is that we use a direct sales model, which does give us, we think, a competitive advantage. We will soon be launching a new product that has dimmable and tunable LED lighting. It allows you to leverage your existing wiring without having to use Bluetooth or wifi or do a big rewiring in a facility. This is coming out in the market soon, and we think that it will be revolutionary. The people who have seen the demos have been very excited about it. This type of approach is what sets us apart.

 I think that we're a very unique company that is positioned very well in an industry that's going to be growing extraordinarily rapidly over the next 10 years. The key to success is growth, profitable growth, and we will do that. I really want to return Energy Focus to cash flow break-even—this is a very important goal for the next 12 months. We will be getting this new product launched successfully, and of course I'm always focused on generating shareholder returns. One of my key objectives that is the underpinning of everything that I do is generating shareholder returns.

CFOTL: Tell us about this business - what does it do and what are its offerings?

 Richards: Centauri is a government services business. We've been growing at about 20% a year, on an organic-only basis, for the past four or five years. We just reached just under $500 million in revenue in 2019, and I'm looking to continue growing in the 20% to 30% range in 2020. We're really focused on space and missile defense and where those domains intersect and create sort of an ecosystem in the defense world. We focus on employing what we believe really is our strength, which is the top technical and specialized talent needed to support the missions of our customers. What makes us different from other government services providers is our focus on the people. I think that a lot of government services companies see the billable staff as not really employees of the company but just products that are being sold. When one contract goes away, so do their products, and when you get a new contract, you go hire new people. We really focus on our technical talent as part of the company. They're not tied to a specific contract or project, but we will develop their career, invest in them from a training and professional development perspective, and move them between projects so that they get enhanced skills that allow them to move up in their career. This allows us to retain a lot of the really critical talent that our customers need and move them between various kinds of mission sets over time. This really separates us from the other sort of body shop types of government services businesses. The next 12 months are really about process optimization. We're setting goals right now and objectives for 2020 that are really based on looking at what we're doing and figuring out how we can do it better. How can we measure this? How can we identify that we've successfully improved the way that we do business and operated within the CFO organization to better support the company's growth through better and stronger processes and optimizing the way that we do business?

CFOTL: Share with us a finance strategic moment?  Coletta: The most recent strategic moment that sticks with me goes back two years to when I moved to our North America organization as CFO. We were on the battlefield of innovation and the cloud business, and we were carrying a big share of the company's business, with high expectations on the street already. We had a business that had been a bit bumpy in the beginning of the year, but we had a solid team that was always seeking to improve itself. To me, it was, Okay, what do I bring to the table and how do I change the dynamic here? The good news was that we had a lot to work with, but the bad news was that when you are public and in a very exposed environment, you never have as much time as you’d like. It's very important not only to deliver quickly, but also to change or invert some trends. I really make sure that I bring value to the business. My team and I give advice and make fact-based decisions that really form a success plan for the remainder of the year at any given time. The strategic moment for me came at the end of the year. We had a very sound acceleration and great financial results, and the team got recognized as Finance Region of the Year. We had gotten employee engagement going up, as well as leadership trust. Service attitudes with regard to the business were way above the benchmarks, and all of this was performed with quality, so we had gained in predictability, efficiency, energy, and credibility. Obviously, the credit goes to the team all together, and this takes an entire leadership team really rising to the occasion. But it's quite powerful to see how dynamics can change and how you can sustain success when you focus on the right things. This strategic moment for me was then when I entered that office and got so much responsibility put in front of me. There were a lot of areas to improve—I won’t say “fix”—but to improve. At the same time, we had a very high run rate, and some areas were doing fairly well. We had a business environment that was quite steady, a big customer base, and so on. So, how do you really drive change in a short period of time, which in this case was the seven months left in the year to make an impact and turn the ship, so to speak? We have been riding this wave ever since. We have a lot of positive momentum across the board on the business front and also in finance, and I think that inverting some of the trends at the right time was critical. You learn a lot about yourself. You also learn a lot about the ability to drive change and people. To me, this was a very strategic moment in my career in terms of really having the ability to build on everything that I had learned before and everything that I had seen in different capacities in order to really move the needle quickly.

CFOTL: What are your priorities as a finance leader over the next 12 months?

Freedman: Here at Room to Read, we've just launched our 2020–2025 strategic plan, of which one of the core parts is the continued build of our financial sustainability. I'm super excited and proud that we are launching a five-year, $10 million initiative—we're calling it a Future Fund—to which we're asking our donors to contribute. In addition to funding our day-to-day programs, we're looking to build out funds that will be unrestricted and allow us to get to six months' operating expense coverage, which is best-in-class. This would allow the organization to really build out its operational reserves to give us the wherewithal to weather ups and downs in the financial markets as well as to take some small risks with innovation to try some things out, test some things—to learn quickly and, if necessary, to fail quickly, as our board says—and to then adapt. Having those extra months of operating coverage will really make a difference for us. My own organization has a leadership role in this, in partnership with the development team. We'll be talking to donors and working with all sorts of organizations to describe the need for having that kind of operating expense coverage to give us real sustainability for our future.

Less than a year after his arrival at Splunk—a fast-growing, San Francisco–based software developer—CFO Jason Child appears to have been fully repatriated to his native land.

To be clear: The “land” to which we refer is not the code-crunching zone of software development but the turf of business growth and scale—a locale in which Child resided for more than a decade while serving in multiple finance leadership roles at Amazon.

Child first joined that company in 1999 as a corporate controller before being reassigned to the firm’s FP&A function. During his 12 years at Amazon, the online retailer grew into a colossus, with annual revenue jumping from roughly $1 billion in 1999 to $50 billion in 2011, the year following his departure.

Since his stint at Amazon, Child has occupied the CFO office at multiple companies, including Groupon, where, less than a year after his arrival, the company would raise $700 million in an initial public offering—the second-biggest tech IPO in history at the time, behind only Google’s.

Still, as Child points out for us, he had yet to nab a CFO position inside the more traditional software development realm, where his “growth and scale” credentials appear to always be in high demand.

At Splunk, where sales grew 38% year-over-year in 2019, Child appears to have found a software match. – Jack Sweeney

Less than a year after his arrival at Splunk—a fast-growing, San Francisco–based software developer—CFO Jason Child appears to have been fully repatriated to his native land.

To be clear: The “land” to which we refer is not the code-crunching zone of software development but the turf of business growth and scale—a locale in which Child resided for more than a decade while serving in multiple finance leadership roles at Amazon.

Child first joined that company in 1999 as a corporate controller before being reassigned to the firm’s FP&A function. During his 12 years at Amazon, the online retailer grew into a colossus, with annual revenue jumping from roughly $1 billion in 1999 to $50 billion in 2011, the year following his departure.

Since his stint at Amazon, Child has occupied the CFO office at multiple companies, including Groupon, where, less than a year after his arrival, the company would raise $700 million in an initial public offering—the second-biggest tech IPO in history at the time, behind only Google’s.

Still, as Child points out for us, he had yet to nab a CFO position inside the more traditional software development realm, where his “growth and scale” credentials appear to always be in high demand.

At Splunk, where sales grew 38% year-over-year in 2019, Child appears to have found a software match. – Jack Sweeney

CFOTL: What was the business opportunity that brought you to Splunk?

Child: When I found out that the Splunk job was open, I jumped at the chance just because I had seen that Splunk really has a chance to be one of the next generational software providers and that it just has a really unique approach to managing the largest datasets. In the software business, we don't have COOs. There's typically a TRO, which we have, and a president of sales. We've got the technology and engineering organizations, of course. My team is trying to really build up the business operations and the transformation teams. I'm taking on those teams, which is a recent decision that we've made. I want to see the finance function become the team that really helps to drive our operational cadence and our progress because this company is growing. Our ARR growth is over 50%—we're at $1.44 billion. We have pretty high growth and already pretty large numbers, so it's all about getting the operational cadence, getting the dashboarding and the weekly business reviews and all of the right operational reviews in place to make sure that all of the right info is in place. Things are breaking every day somewhere, and being able to identify as early as possible where things are breaking and where resources and attention are necessary is critical to being able to fulfill our growth objectives. That's on top of the normal things, like being tied to controllership, having great transparency with investors, and having an efficient and timely close process. We have all of these kinds of table stakes, but the goal is really to help the finance organization to have a front seat at what I call the truth-seeking table. We just want to tell it like it is. We want to provide metrics that tell what is happening in the business, not what we want to have happen, so we have to partner with every part of the business to do this. This is our focus for this year. We're off to a good start, but we have a lot of work to do.

When finance leader Carolyn Koehn looks back on her career to identify the experiences that she feels best prepared her for a CFO role, she shares a candid observation: “I went to places no one else wanted to go.”

Such was the case in the late 1990s, when she moved to Bogotá, Colombia, for Nortel Networks, after having helped the company’s finance leadership understand why she was a good match for a sudden job opening.

“I was the only interested candidate who wanted to go,” recalls Koehn, who says that her initiative and willingness to relocate helped her to become short-listed for other roles in Nortel’s Latin American finance operations. When a more senior role opened up in Mexico, Koehn’s Bogotá experience helped trump that of a second interested job candidate.

“When I look at those two opportunities in hindsight, they honestly were like mini-CFO roles, where you are pulled into everything from facilities and supplier relations to local communications, customer meetings, and more,” says Koehn, who in 2003 became a finance director at Dell, where multiple finance leadership roles would eventually bring her to the position of VP of finance for all of Dell’s global sales compensation.

“A lot of people would look at this as a thankless role, but it’s one of the most critical ones when it comes to turning sales strategy into execution,” she explains.

“This was about taking 31,000 salespeople and applying $1.5 billion in commissions,” adds Koehn, who credits the role with having challenged her “soft skills” as she became tasked with bringing different parts of the organization together to better inform her decision-making. A number of years into her sales comp tenure, Koehn began hearing about yet another opportunity in a different land. After spending most all of her career in helping to grow hardware and infrastructure technology businesses, Koehn became interested in a CFO role at one of Dell’s software-as-a-service businesses, Boomi. Not unlike the role in Bogotá, it was a match. –Jack Sweeney