CFO THOUGHT LEADER

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770: When Founders Make a Difference | Nitesh Sharan, CFO, SoundHound, Inc. Jan 26, 2022

Show notes

When Nitesh Sharan exited Hewlett-Packard after 15 years of diligent career-building, he assumed—like many seasoned finance executives have done—that his finance skill set would be applicable to just about any industry or company.

However, Sharan recalls that when he stepped into a senior IR and treasury role at athletic footwear titan Nike, Inc., this assumption was sorely tested.

“I had to relearn finance in a way because it was not just about the science or about your gross margins, profits, and cash—it was about the art and the science together,” observes Sharan.

“At Nike, the IR function was a very strong partner with communications and the brand, which was a wholly different element of IR that I came to appreciate,” comments Sharan, who back in 2016 executed the intrepid career segue from HP, a company known for its engineering and maniacal focus on product, to Nike, a company known for its marketing and maniacal focus on brand.

Still, Sharan says, the two companies shared something very much in common: iconic founders and the cultures that they had built.

“At HP, we had a founder’s culture in which Bill Hewlett and Dave Packard were embedded in everything. Even with the mergers and divestitures that the company has seen, HP is still the iconic founders' company of the Valley,” remarks Sharan, who adds that Nike founder Phil Knight's imprint is similarly part of the company’s culture today.

“When I went to Nike, I felt one step closer because Phil Knight's footprint is still so deep there—so much of the founder's culture has been embedded,” notes Sharon, who reports that his experience in working at the two founder-led companies has influenced his thinking when it comes to businesses at large.

“I really believe that the most dominant companies are founder-led—you can see it in the markets,” explains Sharan, who last year opened his latest career chapter by stepping into the CFO role at founder-led SoundHound, Inc.

Concludes Sharan: “I just became attracted to the founder's culture, and, in a way, this is what catalyzed my transition to SoundHound.” –Jack Sweeney

769: Beyond the Boardroom | Herald Chen, CFO, AppLovin Jan 23, 2022

Show notes

When Herald Chen was growing up in a town not far from Pittsburg, he dreamed of someday running the small town’s steel mill. Years later when he was graduating from the University of Pennsylvania, the steel mill no longer occupied Chen’s maturing career aspirations.

“My two job offers were to either go make soap for Procter & Gamble at a manufacturing plant in Baltimore or go to Wall Street,“ remembers Chen, who adds that the offers for the seemingly different jobs came as a result of having graduated from UPenn’s Management and Technology program—a curriculum that offered a dual degree in engineering and finance.

Chen chose Wall Street and in 1995 landed at KKR, the private equity firm that had feasted on leveraged buyouts in 1970s and 1980s.

Recalls Chen: “I had a front row seat for meeting many CEOs and CFOs and invested behind a couple dozen of them, so I learned a lot about what the good, the bad, and the ugly look like in these companies.”

Twenty-seven years later, KKR can arguably be seen to have been the mother ship of Chen’s finance career, a place that over time he would leave and then return to as the investment house provided him with the wherewithal to open new professional chapters—the longest being from 2007 to 2019, when he headed KKR’s Technology, Media, and Telecom practice.

Along the way, Chen demonstrated a rapport with C-suite members and company boards that distinguished him from other investors, a trait that led to a growing number of invitations to sit on different company boards.

“I had figured out that I wanted to be building businesses, but I also knew that I wasn’t the smartest or brightest or most charismatic person in the room, so maybe the best way for me wasn’t actually sitting in the CEO seat but instead was investing and sitting on boards and helping CEOs,” comments Chen, who has held a number of board seats, as well as served as board chair for such companies as Internet Brands/WebMD, Optiv, Epicor, BMC Software, and Mitchell International.

With a boardroom track record that few of his CFO peers can match, Chen attributes his success in part to being a good listener. “I would invest behind CEOs and CFOs whom others just didn’t understand—they just didn’t comprehend what these people were trying to do—because I would find that I could create a lot of value with them just by taking a little extra time to hear them through,” remarks Chen.

When asked to offer advice for CFOs seeking to lower the temperature of certain boardroom discussions, Chen shares a story involving notable KKR financier Henry Kravis: “When I was at KKR, I made a mistake in some of the numbers one time. It was late in the transaction, at the point where on Wall Street you’d expect to get yelled at and there would be this big blowup—but I remember Henry Kravis just getting very calm and saying, ‘Hey, we’ll get through this and come out the other side.’” –Jack Sweeney

Increasing the Velocity of Your Flywheel - A Planning Aces Episode Jan 21, 2022

Show notes

Steve and Jack are joined by friend of Planning Aces Bryan Lapidus, who is today director of FP&A for the Association for Financial Professionals. Bryan discusses 2022 planning priorities, while offering guidance to FP&A teams tasked with helping their organization advance into the new year’s uncertain environment. This episode features commentary and FP&A insights from Planning Aces: CFO Jason Child of Splunk and CFO Cassandra Hudson, of EngageSmart.

768: How Real-Time Data Is Changing the Performance Conversation | Michael High, CFO, Deep Water Gulf of Mexico, Shell Jan 19, 2022

Show notes

Back in 2012, when Michael High was heading up corporate planning across 30 countries for Shell, the energy company’s CFO made it known that it was time for Shell’s business leaders to reconsider their ritual of renegotiating annual business targets.

To that end, Shell’s finance leader let it be known that the business units could skip the company’s corporate planning process in the coming year, as an affirmation of their commitment to the targets they had agreed to the year before.

“I actually think that this was the right insight at the time, but it generated a ton of knock-on consequences over time,” explains High, who commends the finance leader’s willingness to take head on what’s recognized in business at large as the budgeting process’s greatest vulnerability: target renegotiation.

Still, the consequences were real.

“When we went to turn on the planning system in 2014, most people didn’t remember how it worked. There was a series of intricate steps—something like 146 steps and different jobs required to get the IT application to do everything that it was supposed to. And, of course, if you do it only once a year, nobody remembers all the right steps,” comments High, who notes that the circumstances also exposed how talent often factors into corporate planning.

“If you think about the FP&A community and the IT community that supports FP&A, you realize that these tend to be high-turnover roles. They tend to be career-developing roles. So, you’d put people in them for maybe 2 to 3 years, typically. Well, by the time we got around to doing business planning in 2014, 80 percent of the organization that either had facilitated the planning process or controlled the IT systems had turned over,” recalls High.

Today, High views as a painful lesson the subsequent late nights and weekends required to get Shell’s corporate planning process back on track—times when many members of Shell’s FP&A team paid a high price. “I was accountable for the process, so it was a leadership failure on my part,” he states.

However, High observes that something more did arise from this consequential episode. Over the next few years, High says, he began to note how a shift was under way within organizations as the regular enhancement of cloud applications began to surpass the functionality improvements of legacy ERP platforms. Meanwhile, when it came to corporate planning, he became focused on how the talent demands of certain IT systems had traditionally put the planning process at a higher risk.

According to High, he was determined to “de-risk” technology in planning and eliminate IT complexity.

To better evaluate some of the new cloud applications, High began attending different conferences, including the annual gathering of the Association of Financial Professionals (AFP)—where the cloud vendors always highlighted how they were zeroing-in on corporate planning’s pain points.

This helped High to see how the adroitness with which certain cloud applications can access, correlate, and display company data could once and for all put an end to certain planning rituals such as the renegotiation of targets.

Concludes High: “What you have the potential to do today is to really change the nature of the performance conversation and the results discussion. You can go from having a static set of numbers produced outside of the room to a discussion during which you can pull up live data and talk about it and actually seek answers to questions on the spot.” –Jack Sweeney

767: On the Path to Being a $1 Billion Company | Bill Zerella, CFO, ACV Auctions Jan 16, 2022

Show notes

Bill Zerella’s path to the CFO office began at a company whose customers largely belonged to a bygone era. At the time, Simplicity Patterns was the largest pattern company in the world, and its most devout customers were sewing machine owners across the United States and Canada who enjoyed making clothes for themselves and their families.

For Zerella, a 20-something-year-old auditor, the critical career decision to join Simplicity was a no-brainer not because of the business opportunity being presented or the position being offered but because of the source of the proffer. The company had recently hired a former Fortune 500 finance leader by the name of Bill Lewis, who was looking to throttle up the company’s business model. Zerella was ready to climb on board.

“I probably learned more from him during the 5 years I was with that company than I’ve learned in the past 25 years,” comments Zerella, who today is a seasoned tech finance leader who has served in a string of CFO roles, including one with Fitbit, where in 2015 he oversaw the company’s $841 million initial public offering (IPO).

Still, when asked about the consequential experiences that allowed him to advance upward, Zerella is drawn back to his years at Simplicity.

“It was a low-tech company that basically just printed sewing patterns—which might not sound interesting to most—but it was incredibly lucrative and probably one of the most profitable that firms I’ve ever been part of,” reports Zerella, who started in an auditing role but quickly found himself reassigned to FP&A as CFO Lewis looked to beef up the company’s performance measurements. However, Zerella’s arrival in the FP&A planning realm coincided with Simplicity’s adoption of one of the desktop computing era’s most disruptive technologies, spreadsheet application Lotus 1-2-3.

In the months ahead, Zerella’s mastery of the tool would allow the former auditor to move the Simplicity finance team beyond calculators and pencils as he led the automation of the company’s entire planning process—and received multiple promotions.

In fact, the former auditor held the position of treasurer at the time of his departure to accept his first CFO appointment—only 5 years after his arrival.

“Looking back, I probably got there too soon—I probably could have used a little more training,” recalls Zerella, whose Simplicity career was also notable for having permitted him to witness firsthand the transformational power of tech—which itself would lead to his relocation only a few years later to a locale he will now likely always call home, Silicon Valley. –Jack Sweeney

766: Making Decisions with the Customer in Mind | Cassandra Hudson, CFO, EngageSmart Jan 12, 2022

Show notes

Back in 2008, Cassandra Hudson was interviewing for a senior accounting role at a small tech firm in Boston when the CFO casually shared some “insight” into the company’s future.

“The CEO really wants to take this company public, this is probably never going to happen—we’ll likely sell in the next couple of years,” Hudson recalls the CFO remarking, before he added: “Usually, finance people don’t stay in the event that a company is sold—we just leave and go on to the next one.”

At the time, Hudson says, she didn’t know what to make of the CFO’s comments, especially when they accompanied a job offer.

One IPO and multiple CFOs later, the Boston tech firm was sold to developer OpenText in late 2019 for $1.4 billion.

“It was a much longer journey, but we did end up there,” reports Hudson, who in 2020 stepped into her first CFO role as the culmination to a remarkably linear 15-year career path at the Boston tech firm, which itself grew from less than $10 million to more than $400 million in annual revenue during Hudson’s years on board.

Today, as CFO of EngageSmart, Hudson looks back at the succession of promotions and job titles and experiences that have punctuated her climb upward to senior management and the merits of making a 15-year career investment within a single company.

“The path was definitely not always certain, and there were moments when you would reassess,” comments Hudson, who remembers receiving a challenging international operations assignment from a newly hired CFO—and doubting whether her experience was a good match.

“My sense at the time was ‘I don’t think that I can do this, I don’t even know if I want to do this, I think I’m done here,” explains Hudson, who adds that the CFO reassured her that she had all of what was required to complete the assignment.

Today, looking back at her job interview at the Boston tech firm, it’s clear that the previous CFO perhaps was misjudging the firm’s IPO prospects, dogged future growth trajectory, and ultimate sale timing.

Still, he did mention that there would come a day when it would be time to “go on to the next one.” –Jack Sweeney

765: Never Waste a Crisis | Jean Laviqueur, CFO, Coveo Jan 09, 2022

Show notes

Unlike many of his finance leader peers, Jean Lavigueur has little difficulty in identifying where and when his path to the CFO office began.

It was back in the early to mid-1990s, he recalls, when—after he had spent nearly 10 years with PwC—a charismatic entrepreneur client named Louis Têtu convinced him to join his supply chain start-up.

Although this company was soon thereafter sold to Baan, Têtu and Lavigueur found that they had unmistakable chemistry—or at least this is what we must assume, given that 25 years later, the two Canadian entrepreneurs have built not one but two other successful companies together.

The first was Taleo, a talent management company that the two men cofounded in 1999 and took public in 2007 (In 2012, Teleo was sold to Oracle for $1.9 billion). Their present firm is AI-powered ecommerce company Coveo, which recently raised $215 million when it went public on the Toronto stock exchange.

Today, as a seasoned CFO, Lavigueur implores his CFO peers to widen their lenses.

“With every crisis, there is an opportunity,” he observes, before recounting how nearly a decade ago, Microsoft—one of Coveo’s largest development partners—acquired his firm’s largest rival, precipitating a nail-biting challenge that led Coveo to make a strategic pivot.

“We used the crisis to accelerate toward the cloud,” explains Lavigueur, who adds that the company fueled its new cloud ambitions in part by forging a stronger relationship with Microsoft rival Salesforce, whose offerings—unlike those of Microsoft—were entirely cloud-based.

Advises Lavigueur: “When you see a crisis, use it to get better.” –Jack Sweeney

764: When Growth Is the Only Constant | Jen Herdler, CFO, Impact Health Jan 05, 2022

Show notes

When it came time for Jen Herdler to get back into the workforce, she signed up for a refresher course in financial modeling through a weeklong classroom experience in lower Manhattan.

There she would become reacquainted with an old friend: Excel. However, her fellow classmates were another matter.

“I’ll never forget that first day when I walked into the classroom and discovered that everyone was at least 20 years younger than me—I felt so uncomfortable and out of my element,” recalls Herdler, a seasoned finance leader who had put her career on hold roughly a decade earlier to raise a family.

Herdler says that her weeklong immersion among 20-somethings grew only more unsettling when the class was asked to individually tackle different modeling tasks, an exercise designed to stress-test the spreadsheet’s latest functionalities.

Says Herdler: “Their speed always surpassed mine.”

However, the discussions that routinely followed the Excel exercises began to expose something different to Herdler.

“I realized that the communication skills that leaders need to explain their ideas were as critical as they ever had been,” comments Herdler, who notes that the discussions also made her realize how her past experiences in both business and life had enhanced her judgment and enabled an enviable advantage in making business decisions.

Looking back at her classroom experience, Herdler says that her biggest takeaway perhaps had little to do with business modeling.

“The technology is always changing,” she observes, “but business and leadership fundamentals do not.” –Jack Sweeney

763: Of All the Nerve | Pete Mariani, CFO, Axogen Jan 02, 2022

Show notes

Like many of his finance leader peers, Pete Mariani credits a senior operational role with helping him to plant both feet on the path to CFO office.

However, unlike many of his peers, Mariani found his transformational role to be in Japan.

Back in 1998, he was a director of finance for Guidant, a maker of cardiovascular medical products that was looking to grow its footprint in a number of markets offshore—including Japan, where it had recently acquired one of its distributor partners.

However, unlike many of his peers, Mariani found his transformational role to be in Japan.

“I gave an immediate, ‘Yes!,’” recalls Mariani, when asked whether there was any hesitation before accepting the offer that would advance him into a vice president of finance position at Guidant’s soon-to-be-established Japan subsidiary.

Operational experience was one of the incentives that Guidant had promised Mariani, so before long the finance transplant had numerous functional areas within the subsidiary reporting to him, including warehousing and distribution, customer care, IT, legal, and compliance.

As functional areas became established and the American company successfully aligned its culture within the international setting, growth became a natural by-product.

“I think that when we began, we had about 50 employees in Japan—4 years later, there were more than 300,” reports Mariani, whose Japan career chapter would end in Year 4 when he returned to the States after having been named controller and chief accounting officer for the company.

However, upon his return, more than a promotion lay in waiting.

“We landed back in Indianapolis on the same day that they passed Sarbanes-Oxley,” remembers Mariani, citing the devilishly complex compliance legislation that would occupy many of his waking hours in the months and years ahead. –Jack Sweeney

Bonus Replay: The Courage of Your Convictions | Joe Wolk, CFO, Johnson & Johnson Dec 31, 2021

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728: The Courage of Your Convictions | Joe Wolk, CFO, Johnson & Johnson

728: The Courage of Your Convictions | Joe Wolk, CFO, Johnson & Johnson

Aug 22, 2021

Joe Wolk was about 5 years into his 23-year career with Johnson & Johnson when he was encouraged to take a manufacturing operations position at a newly acquired J&J company in Vacaville, California.

One hot July day, Wolk recalls, he and his wife drove up to Vacaville to visit the plant, where he ended up taking a seat across from the newly acquired company’s plant manager.

As one of Vacaville’s initial J&J transplants, the young finance executive sensed that his arrival was being viewed less than enthusiastically.

“Within the first 90 seconds, he says: ‘Hey, you know what? I don’t think we need you out here,’” Wolk remembers, citing those words as the plant manager’s first remarks.

Thus began one of Wolk’s least favorite but—as he explains—most rewarding career experiences.

“The first 4 months in that job were like going to the dentist every day,” says Wolk, who tells us that ultimately the reward from the experience was a lesson in when and how to stand your ground.

The lesson began at a team meeting where Wolk tried to offer the plant’s management some practical advice with regard to how to prepare for an upcoming visit from senior J&J executives.

At the time, Wolk says, the plant was working to address a number manufacturing issues as it tried to determine how best to meet customer demand.

Wolk recalls the plant manager’s response to his advice: “We’d like to meet your wish list, but we don’t have time for this right now.”

Instead of just accepting the manager’s feedback, Wolk reports, he arranged a private meeting with the manager, where he boldly elucidated the items occupying his “wish list.”

“If they come out here next week and we can’t provide certain answers, we’re going to have a mess on our hands,” were among the words that Wolk says that he used to prod the plant manager’s thinking.

In the end, the visiting J&J executives were satisfied with the plant team’s answers, and Wolk’s reputation grew in the plant manager’s eye.

“From this point on, he didn’t take a meeting without including me,” concludes Wolk, who uses the story to underscore how finance executives must be ready to summon the courage of their convictions. –Jack Sweeney

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