CFO THOUGHT LEADER

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778: Finance: Not a Function but a Profession | Russ Porter, CFO, IMA Feb 23, 2022

Show notes

Looking back on the 28 years that he spent inside IBM’s finance function, Russ Porter notes that his career climb paralleled the evolution of FP&A inside the giant technology provider.

Turn back the clock to the early to mid-1990s and, Porter tells us, many of IBM’s FP&A professionals were more or less serving as budget managers for the company’s many business units.

However, in the years that followed, they began being tasked with broader, more operational duties.

“FP&A became the gearbox for the financial and operational management of each division,” explains Porter, who describes the role of IBM’s FP&A professionals as becoming more “navigational” over time.

“Each week, I sat down with my general managers—we would go through all of our sales performance numbers and review which contracts were coming on and which ones were coming off,” reports Porter, recalling the routine.

Along the way, Porter recalls, FP&A professionals seeking advancement within the company would need to demonstrate that they could do more than drop red flags when problems surfaced.

“FP&A would very often be the centerpiece of conducting troubled contract reviews,” remarks Porter, who adds that finance professionals were expected to not only make recommendations regarding what actions might be required to remedy a struggling contract but also follow up to determine whether the prescribed actions were being taken.

For Porter, who eventually oversaw FP&A for IBM’s $30 billion global technology services division, the troubleshooting experiences gleaned during contract review sessions became even more valuable as his growing leadership responsibilities no longer permitted him to sit in on them.

Says Porter: “I knew what was going on at the ground level in terms of how the team reviewed a contract, so I was able to say, ‘Here are the questions that we should now be asking in order to get the answers that we need to better manage the broader portfolio.’” –Jack Sweeney

777: A CFO's Unfinished Business | Isaac Ro, CFO, Sema4 Feb 20, 2022

Show notes

After spending 16 years as an equity analyst (the last nine of which at Goldman Sachs), Isaac Ro could not escape the fact that he was busy and bored.

The same work that had once challenged his every faculty had become more or less an exercise in pattern recognition.

“Good management teams are good, and bad ones are bad,” observes Ro, recalling the cynical mind-set that had been stalking his professional life inside the medical technology sector for nearly 2 years.

Still, Ro didn’t leave.

“I loved working at Goldman, and I believed that if ever I were going to leave, I wanted to be running to something and not from something,” explains Ro, who admits that he had a self-imposed “high hurdle” to jump if he were to consider future opportunities.

To Ro, the classic equity analyst segue to corporate investor relations chief would be “just a different version of the same gig.”

“I needed to spread my wings wider and do something sufficiently different,” he remembers, “but I needed someone to sponsor me.”

Ro leaves little doubt that he had a CFO role in mind and that he had concluded that the best route for distinguishing himself from his IR-destined peers was through his existing relationships with successful management teams.

One such relationship that Ro had kept in place over time was with the management of a medical technology company that he had helped to take public in 2013.

“I had sort of mentioned to them over the previous several years that if an opportunity for me with them were to arise, I would appreciate a call,” reports Ro, who goes on to say that in early 2019, he received calls from a number of this firm’s management team members, who outlined how they were ready to launch yet another new medical technology company that they characterized as “similar but bigger.”

“The founders knew what I had to offer and wanted exactly that, and you really need this combination to have a chance,” comments Ro, who would step into the CFO office at newly formed Thrive, Inc., in June of 2019 and help to drive the sale of the company—less than 2 years later—to Exact Sciences for $2.15 billion.

Still, despite having helped the Thrive management to achieve an impressive exit, Ro’s job satisfaction wavered.

“It just felt like I had a lot of unfinished business as a CFO,” recollects Ro, who adds that he determined that the best way to broaden his CFO resume was to move beyond start-ups.

Taking the advice of a Thrive board member, Ro says, he then purposely focused on opportunities within firms that were already generating “significant revenue” and that had aspirations to go public.

It was this prescription that led Ro in early 2021 to enter the CFO office of Sema4—a company with 900-plus employees that was generating roughly $200 million in annual revenue.

“Sema4 is a very natural progression for me when it comes to keeping the learning curve steep,” notes Ro, who happily observes that he seldom gets bored these days. –Jack Sweeney

The Move to Better - A Planning Aces Episode Feb 18, 2022

Show notes

Steve and Jack discuss how the goal of planning teams and organizations should always be moving beyond the accepted practices or tools to something better. Featuring commentary and FP&A insights from Planning Aces: CFO Bill Zerella of ACV Auctions , CFO Scott Walker of Clarity Software & CFO Michael High of Deep Water Gulf of Mexico, Shell

776: Assessing Risks Beyond the Numbers | Nipun Soni, CFO, BillionToONe Feb 16, 2022

Show notes

When Nipun Soni tells us that he spent 5 years at Oracle Corp., during which time he helped to perform due diligence on some 40-plus M&A transactions, we can’t resist asking about the “big” deals that grabbed business headlines—such as Oracle’s 2009 acquisition of Sun Microsystems, Inc.

Although Soni no doubt understands our curiosity, he can’t help but tamp down our expectations a bit after we ask: “Do you recall ‘the visit’ to Sun’s campus?”

His reply? “With high-profile public company mergers, you actually don’t visit. You try to keep it under the covers. You don’t want people to know about it before it happens.”

Still, our curiosity lingers around “the visit” because this is when the ice is broken and where finance is frequently represented more than any other functional group within the acquiring company.

Soni is happy to expand: “Well, as soon as the transaction was announced, we were actually at the Sun campuses. We met with Sun’s broader team, their leadership, and we tried to break the ice between the two broader finance teams just by saying: ‘Hey, welcome to our broad Oracle umbrella. We really look forward to working together and learning about this different business model.’”

However, BillionToOne’s CFO makes it clear that some of the biggest lessons from his 40-plus M&A transactions at Oracle and numerous subsequent other ones that today populate his collective career portfolio often came from deals involving smaller private companies.

“You don’t want to suddenly find yourself in a position where you inherit a few questionable sales transactions from an acquired company that begin tainting the overall revenue recognition of a company like Oracle,” explains Soni, who adds that the lack of infrastructure within smaller firms often makes such transactions riskier—and all the more interesting.

"What is it that we should be looking for?,” “How do we evaluate the synergies between the two companies?,” and “What are some of the beyond-the-numbers risks that must be thought through?” asks Soni, as he seeks to better expose the experience he believes helped to propel him upward in his career and ultimately into the CFO office at BillionToOne. - Jack Sweeney

775: Back to the Future | Joan Hilson, CFO, Signet Jewelers Limited Feb 13, 2022

Show notes

Of all the CFO career routes that our finance leader guests have shared with us, very few have have rendered a path as circuitous as the one blazed by Joan Hilson, CFO of Signet Jewelers Limited, the world’s largest specialty jewelry company.

When Hilson assumed the CFO role at gem giant Signet in 2019, she was entering a business that had charted several evolutionary chapters—including an early one that she knew only too well.

Back in the mid-1980s, Hilson had left public accounting to become controller of a 100-store chain of jewelry stores known as Sterling Jewelers. The regional chain would soon thereafter complete an IPO that put it on a path to grow to more than 1,000 stores, a feat that it would accomplish in part through the acquisition of several chains, including Kay Jewelers. Later, the business would be rebranded as the Signet Group.

In 1992, when Hilson left the jewelry retailer to accept a vice president of finance position with Limited Brands, she had no clue that her career would eventually lead her back to the fast-growing, ambitious jeweler that had first whetted her appetite for retail. Thus, when executive and specialty jeweler were reunited in 2019, Hilson’s career journey took on the storybook quality—seldom achieved in corporate finance—that derives from the protagonist returning to close a figurative loop.

For Hilson, though, the intervening years were perhaps less of a loop and more of a 27-year stint of diligent career-building that included CFO tours of duty at Limited Brands’ Victoria Secret Stores (2003–2005), American Eagle Outfitters (2005–2012), and David’s Bridal (2014–2019).

Asked to supply us with her 2022 CFO priorities, Hilson responds: “To continue to grow my team and create an experience that allows them to grow personally as well as professionally.”

It’s perhaps not surprising to hear such team-oriented goals as the priorities of this finance leader, who, during her 1980s career chapter with the jewelry giant, became the company’s first female vice president. –Jack Sweeney

774: When How You Tell It Matters | Heather Dixon, CFO, Everside Health Feb 09, 2022

Show notes

It was a moment of insight that Heather Dixon remembers having not once but twice during the untold number of hours she has spent in examining how divisional numbers were being “rolled up” to be reported.

In the process of rolling up certain numbers, Dixon noted that parts of a division’s business would be exhibiting outstanding performance, but when the division reported its results, the parts were frequently hidden.

Observes Dixon: “These divisions were really doing a lot better than how things appeared on the page.”

For Dixon, whose resume includes chief accounting officer stints at both Aetna and Walgreens, the reported numbers were frequently not the problem—instead, it was how the companies were accustomed to explaining their results.

As Dixon explains it, a moment of divisional insight at each company prompted finance to mobilize a company-wide effort “to tell the story better.”

Says Dixon: “We went through a recalibration internally when we said, ‘Let’s look at all of the things that we do as a company and pull them apart and figure out how to put them together in the right way.”

According to Dixon, “the right way” is an approach that helps investors to better understand the company.

“If the market understands what you’re doing and they understand the pieces of your company, they can give you a multiple that values each division of your company separately—and they can really expand these multiples for the segments that exhibit performance that deserves higher numbers,” she notes.

What began as an examination of how one division rolled up its numbers ultimately became a wake-up call for the company’s reporting at large:

“What I have twice seen in my experience is that we were able to take the multiple for the overall company up. Again, same company, same building blocks, higher multiple—all because we decided to report the information in a little bit of a different way.” –Jack Sweeney

773: Serving an Organization of Proactive Decision Makers | Darrell Cox, CFO, Vena Feb 06, 2022

Show notes

For many organizations, capturing real-time data is no longer a goal but now a reality. However, for those firms determined to accumulate these real-time bits and digital details, the old adage about house guests and fish seems to apply: After 3 days, the former begin to smell like the latter.

This is an aroma that has become particularly unsettling to CFOs who find themselves increasingly being tasked with untangling the organizational snags that frequently stall business meetings and curtail the flow of real-time data insights to key decision-makers within the organization.

To help us to better understand the efforts afoot to liberate the flow of data and remove this foul scent, we were pleased to once more catch up with Darrell Cox, CFO of Vena, who never hesitates to expose the complexity of the organizational collaboration required for Vena to empower its decision-makers with the data on which they rely to scale correctly and look beyond the next quarter. –Jack Sweeney

772: Inside the M&A Quarry | Andy Watts, CFO, Brown & Brown Feb 02, 2022

Show notes

Asked to highlight his experience in mergers and acquisitions, Andy Watts doesn’t need to weigh and measure the many deals that he has helped to execute over his three-decade-long finance career. Instead, Watts quickly points to the 2000s, when, as CFO of a division of Thomson Reuters, he sold off businesses responsible for nearly half of his division’s $120 million in annual revenues—a respectable feat that is perhaps even more impressive in light of the four new businesses that his division acquired during this same 12-month period.

“I got a really good frontline view of how to do M&As, and while I stubbed my toe on a number of them in the process, in the end we had them running like a Swiss watch and knew exactly how we were going to get the value out of them,” remembers Watts, whose 12-year career at Thomson included something of a surprise chapter that he now credits with having helped to open the door to an operations role.

“I was sitting in a business review, and I began ‘barking on’ about how we were treating our customers—so the division president turned to me and said, ‘Okay, why don’t you go fix it?,'” recalls Watts, who notes that his initial his response was to try to step on the career break.

Says Watts: “I said, ‘No, wait!’ But then she responded, ‘There is no one else who has expressed that level of passion about our customers and the experience that they deserve.’”

Over the coming years, Watts would oversee the company’s customer onboarding processes and the relationship management interactions that governed Thomson’s customer experience. Looking back at the role that afforded him the title of Global Head of Customer Administration, Thomson Reuters, Watts realizes that this experience allowed him to complete his eventual trek to the CFO office. In 2014, he would leave Thomson and step into the CFO office at Brown & Brown, where a transformative acquisition was in short order added to the menu. –Jack Sweeney

771: Embracing Change | Brian Kinion, CFO, MX Jan 30, 2022

Show notes

Twenty-four hours after Brian Kinion’s first earnings call as a CFO of a publicly-traded frim, his aspirations as a finance chief quickly became deflated as Vista Equity Partners made clear its intent to buy the company, a developer of marketing automation software known as Marketo.

“Mine became a very different role than what I had anticipated—almost all of the executives with whom I had worked left, but I stuck around for another 6 months to help the team take it from public to private,” remembers Kinion, who nevertheless views his Marketo career chapter as one of the most formative steps along his vocational path.

To Kinion, who had joined the company several years earlier as vice president of finance, his Marketo sojourn was important because it allowed him to check the “CFO” box, thus guaranteeing him a coveted edge when it came to future CFO appointments.

What’s more, Kinion says, Marketo was where the full breadth of his past experiences could finally be put to use and where he finally came to “own the financial model”—a leadership leap made possible by then-CFO Fred Ball, who Kinion says made no secret of his mission to develop others.

Ball had led the company through Marketo’s successful IPO in May 2013 and occupied its CFO office as annual revenue at the firm grew from $14 million in 2010 to $210 million 5 years later.

“He told me, ‘Come in and take my job, and even if you don’t end up taking it, I’m still I’m going to train you to be a CFO somewhere else,’” explains Kinion, who in 2017 would exit Marketo to accept a CFO position at Upwork, where once more he became the CFO of a publicly traded company after the private firm’s IPO in the following year. –Jack Sweeney

When HR Becomes a Borderless Function - A Workplace Champions Episode Jan 28, 2022

Show notes

Brett and Jack discuss how the leadership narrative benefits hiring, and why department hiring budgets may someday soon be replaced. Featuring the commentary and insights of workplace champions CFO Cassandra Hudson of EngageSmart, CFO Nitesh Sharan of Soundhound and CFO Michael High of Shell’s Deep Water Gulf of Mexico.

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