CFO THOUGHT LEADER

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615: Validating Your Proof Points for Investors | Jeff Epstein, (CFO Emeritus) Oracle, DoubleClick, King World Jul 12, 2020

Show notes

In the mid-1990s, when Jeff Epstein was busy satisfying the M&A appetites of media clients for First Boston, one of his smaller, but more boisterous clients asked him to join the firm as its CFO.

“It was the type of situation where if they had gone to a recruiter, I would never have made the resume cut because I had never been a CFO and I had never even worked for a CFO,” explains Epstein, who was 32 when he entered the lively entrepreneurial realm known as King World Productions. A one-time family-owned company, King World had seen its stature grow inside New York’s competitive media landscape as the firm began producing giant hit TV shows such as Wheel of Fortune, Jeopardy and The Oprah Winfrey Show.

“It was actually a small company with only about 300 employees, but they had three of the highest-rated, most profitable shows on television, with about $300 million of revenue and $60 million of operating income,” recalls Epstein, who would go on to add consecutive CFO career chapters at DoubleClick, Nielsen (Media Measurement), and Oracle Corp., a mix that fortified his footing in both the tech and media worlds—but also revealed little preference when it came to company size.

“King World had been a family business that had only recently become a New York Stock Exchange company when I joined them, so I had to put in place some basic procedures, but Oracle had been around for many years and already had very sophisticated processes,” notes Epstein, who today exudes as much enthusiasm for Oracle’s approach to simplifying and standardizing its internal processes as he does for the entrepreneurial instincts of King World chairman Roger King.

“Three minutes from when an idea came out of my mouth, Roger King would have picked up the phone and be pitching our largest customer, ” says Epstein, whose CFO tenure there lasted 6 years—a span of time during which King World would triple its value and ultimately end up being sold to CBS Corp.

It was following the sale of King World, that Epstein would open the career chapter that permitted his CFO career to grow beyond a single industry.

“DoubleClick was an early Internet advertising technology company and wanted a CFO from either media or technology, so I had the media experience part,” comments Epstein.

Today, as operating partner for Bessemer Venture Partners of Menlo Park, Calif., Epstein marvels at the continued evolution of the two industries that shaped his CFO career:

“Two years ago, global Internet advertising surpassed global television advertising revenues to become the biggest media opportunity in the world—so if you’re around long enough, you see some incredible things.” Sign Up for our Newsletter

614: In Pursuit of Data's Deep Impact | Matt Borowiecki, CFO, Biofourmis Jul 08, 2020

Show notes

When asked what led him to open his latest career chapter as CFO of Biofourmis, Matt Borowiecki quickly mentions the 2018 sale of MassMutual Asia Ltd. to Yunfeng FG.

After helping to piece together a string of strategic plays for MassMutual, Borowiecki was instrumental in effecting the Yunfeng FG deal, which was a standout for him personally as well as one that many industry analysts at the time deemed transformational for company.

Having helped to spearhead the transaction, Borowiecki was subsequently asked to relocate to Hong Kong and lead international strategy and corporate development for the company. With his deal-making realm vastly expanded, Borowiecki might have been expected to rocket down MassMutual’s transformational M&A track for several more years.

However, the move to Hong Kong challenged him in ways that he had not necessarily anticipated. Seeking to discover new strategies for MassMutual to extend its reach in the region, Borowiecki frequently found himself in meetings with local Hong Kong venture capitalists and private equity firms.

“I really started to understand the power of data science and how insuretech, fintech, and healthtech really were transforming,” explains Borowiecki, who found his career ambitions evolving and coalescing around the broader notion of making an impact on industries at large.

Knowing that his M&A experience would serve him well inside the start-up realm, he soon saw a new career chapter come into focus.

“Quite candidly, the exposure that I had to very different consumer patterns and thinking about health and wealth in different ways piqued my interest in the Biofourmis platform,” explains Borowiecki, who adds that the basic premise of Biofourmis is to enable patients to compare their own physiological signals to metadata from a vastly larger population pool in real time.

Says Borowiecki: “We call them ‘Biovitals’—they’re effectively a real-time picture designed to help clinicians to predict and prevent serious medical events. For example, heart failure is one of our focuses.”

It seems that as one career chapter closed for Borowiecki, yet another opened. –Jack Sweeney

613: Helping Others Get the Big Picture | Anders Fohlin, CFO, Medius Jul 05, 2020

Show notes

Early in his finance career, Anders Fohlin discovered that he could ratchet up his capacity to consume information and problem-solve simply by drawing pictures.

However, what had originated more as a personal observation would eventually evolve to something more as he discovered that his visuals could serve others.

“I started to regularly draw processes on white boards and paper to make things very visual for everybody and help others to get the full picture,” explains Fohlin, whose knack for creating visuals and goal of making things more visible “for everybody” led him to begin viewing routine meetings as opportunities for visualization.

Says Fohlin: “I found that process maps and gathering people in the same room was a really good way to spark energy and collaboration and have people feel that they were important and doing something more than just shoveling coal.”

Fohlin adds that his early efforts to create greater collaboration and inclusion ended up opening the door for him to various senior finance roles and eventually led him to the CFO office at software developer Medius.

Among the guiding principles that Fohlin says have influenced his leadership style and approach over time is the notion of transparency.

Ten years ago, while a senior finance executive at NASDAQ, he participated in a series of meetings to discuss the adoption of an activity-based costing model. “We would sit around the table and go product by product to explore ways in which we could improve,” he recalls, “and this was done with representatives from all of the different functions.”

Part of the approach involved sharing numbers more widely across the organization and downward to the workforce at large.

“If each employee can see the overall picture and what aligns their daily activities with the strategy and vision of the company, then they make better decisions,” explains Fohlin, who adds that today—as a CFO—he’s still drawing pictures. –Jack Sweeney

612: The Rewards of Customer Insight | David Wells, CFO, ENDRA Life Sciences Jul 01, 2020

Show notes

Back in the mid-1990s, David Wells was a financial analyst for a Bay Area supply chain management company that boasted an impressive list of Silicon Valley marquee customers.

Counted among their clients was a large chip maker whose customer relationship upkeep had over time become Wells’s responsibility. Because this was a coveted customer, Wells always sought to be highly responsive to any of the chip maker’s requests for information, but he increasingly found his company’s pricing model out of step with the customer’s needs.

“There was a lot of confusion and a lot frustration over what the prices for our services and products should be. Basically, we needed a much more sophisticated pricing model that the customer would accept,” recalls Wells.

Faced with growing customer unrest, Wells and a colleague created a new pricing model that was carefully tailored for the chip maker’s business.

Says Wells: “It was very intricate and more specific, but it was modeled exactly the way the customer saw their business.”

The customer quickly gave the new model a thumbs-up, and all was well—until roughly 4 months later, when Wells realized that the new model was about to deliver to his company a windfall that would generate 4 to 5 months of revenue within only 6 weeks.

“When I saw what was happening, I went to the customer and said, ‘Listen, this model that we built … there’s kind of a flaw in it. It’s a flaw in our favor, but we didn’t intend for this to happen and we don’t want you to view us as being unethical,’” recalls Wells.

To Wells’s surprise, the chip maker was not concerned about the imminent financial swell of its purchases. It was instead highly pleased to have had a model created specifically with its needs and requirements in mind.

“What this taught me was that as a CFO you’ve got to understand the customer and you’ve got to understand your business,” explains Wells, who believes that finance chiefs must first have visibility into customer engagements to better understand the inner workings of relationships with them.

He continues: “If you can distill it down into tools that will then quantify the activity, then as CFO you’ll be in perfect shape to make the right decisions both for the customer and for your company.” –Jack Sweeney

611: An Acquisitive State of Mind | Jon Nguyen, CFO, Kyriba Jun 28, 2020

Show notes

Jon Nguyen got his first taste of M&A-related work in the early to mid-2000s when he served as the finance partner for the auto lending unit of HSBC.

“In consumer lending, you end up doing a lot of portfolio purchases rather than equity ones, but I have become more involved in the execution of deals over the past 8 years,” says Nguyen, who, distinguishes the past 8 years as a standout chapter -one that has allowed him to certify his M&A credentials and enter the CFO office at Kyriba.

Turn back the clock 8 years, and Nguyen is vice president of finance for Mitchell International, a $600 million software and service business. As the company’s FP&A leader, Nguyen was tasked with supplying key insights to management decision-making behind the sale of Mitchell to KKR in 2013. Meanwhile, 5 years later, Nguyen was once more in the M&A diligence mix when KKR sold Mitchell to Stone Point Capital. Along the way, Nguyen’s M&A resume quickly expanded.

“At Mitchell, we were very acquisitive, and during my tenure there, we acquired 12 to 15 companies,” says Nguyen, who frequently became charged with leading the integration of Mitchell’s latest bounty.

In mid-2018, following the sale of Mitchell to Stone Point, Nguyen joined cloud treasury and finance solutions company Kyriba as senior vice president of FP&A. Roughly a year later, he was named Kyriba’s CFO—a development that came on the heels of Kyriba’s sale to private equity firm BridgePoint. There’s little question that Nguyen’s latest career chapter has a familiar ring to it and is perhaps part of a larger M&A volume that he first started creating 8 years ago.

Says Nguyen: “It’s interesting how life can take you where you belong.” - Jack Sweeney

610: Getting a Read on Economic Recovery | Michael Borreca, CFO, LYNX Franchising Jun 24, 2020

Show notes

Finance leaders who remain skeptical of the prospects for economic recovery inside the 2020 calendar year may want to consult LYNX Franchising CFO Michael Borreca.

“I don’t think that it’s going to take us to 2021 to get back to March sales levels,” says Borreca, who doesn’t hesitate to credit three nontraditional metrics for influencing his current thinking on the subject.

The first is the volume of disinfectant currently being purchased by franchisees of JAN-PRO—owned by LYNX—which boast of being the largest commercial cleaning franchiser in the country, with over 8,000 small business owners.

“The more our franchise network is buying disinfectants, the more this means that more businesses are starting to reopen. They are doing a deep clean ahead of time, and then customers are being welcomed in,” says Borreca, who counts the lengthening commuting times surrounding LYNX’s hometown of Atlanta, Georgia, as yet another unconventional metric pointing now toward a recovery.

The third metric influencing Borreca’s upbeat economic outlook is the growing digital sales leads for Intelligent Office, a virtual office business that LYNX acquired early last year. In addition to its à la carte virtual office assistant services, Intelligent Office also provides businesses access to furnished office spaces and meeting rooms.

“Folks are looking for private space where they can go to get out of the house and work, but ours is not an open coworking environment,” explains Borreca, who says that as leases expire, the pandemic is already leading many companies to rethink how they use and pay for space. - Jack Sweeney

609: Minding Your Financial Ps and Qs | Matt Ellis, CFO, Verizon Jun 21, 2020

Show notes

It’s a story that Verizon CFO Matt Ellis seems to enjoy telling and one that he has undoubtedly related more than once before.

One evening while in high school, Ellis was working at the fish counter of a local supermarket when he received some feedback from the store manager.

Earlier in the day, the man had asked Ellis to clean a number of shelves beside the counter, but Ellis had soon become busy with fish patrons and hadn’t able to complete the task.

More than 30 years later, Ellis easily retrieves the store manager’s words: “I’m not disappointed that you didn’t get it done—I know that you were busy with your normal stuff. What disappoints me is that if you had only told me, I could have arranged to have someone else to do it.”

This is a classic management lesson that many business leaders have communicated before, but when Ellis presents it, the message is endowed with renewed relevance for finance.

It is easy for us to imagine Ellis retrieving the store manager’s lesson to enlighten a young finance analyst—or perhaps even his own approach as he prepares to brief Verizon board members on looming strategy snags.

“This taught me two things: One was the value of communicating bad news as early as possible, and the second lesson was the way in which he gave feedback—ranting and raving is not the way to get through to people,” explains Ellis, who even today seems to muster genuine appreciation for—and perhaps even marvel at—the store manager’s evenhanded demeanor.

It’s not surprising that Ellis shares a lesson that reveals the power of communication in finance. This is no doubt a skill he acquired early in his career and that has contributed to his ongoing ascent in responsibility and reward.

Having worked beside CFOs at Tyson Foods and Verizon for nearly a decade, Ellis arguably understood the CFO role better than most when he eventually became a CFO himself, at Verizon.

Asked what advice he would have given himself in the first week of his tenure, Ellis responds that the parts of the CFO role about which he was most uncertain turned out to be those that up to that point had not been part of his experience.

“It’s the interactions with the other members of the senior leadership team that become different,” he reports. “It’s the importance of one-on-one communication—not the group meetings to which I had become accustomed before.”

Here, too, Ellis’s communication skills have no doubt served him well. –Jack Sweeney

608: Opening the Acquisition Chapter | Jody Cire, CFO, AllCloud Jun 17, 2020

Show notes

When the Sarbanes–Oxley Act was enacted 18 years ago, it required the Securities and Exchange Commission to create regulations to define how companies should comply with it—a mandate that would end up impacting the careers of finance professionals well into the future.

CFO Jody Cire was one such professional. Back in 2010, Cire found himself in Boulder, Colorado, after having been relocated from a role in Germany as KPMG’s lead audit manager for SAP AG. In light of his recent large enterprise experience, KPMG had been eager to assign Cire stateside in order to scratch the Sarbox itch of some of its largest customers.

Within a year, Cire found himself knee-deep in massive Sarbox compliance projects with a number of prestigious clients.

Still, something was missing.

Says Cire: “It just wasn’t where my personality or my curiosity really thrived. I just didn’t enjoy it and began to express that.”

Meanwhile, his appetite for assignments involving start-ups and high-growth firms had never wavered, allowing him to confidently exit KPMG and step into a corporate role as vice president of finance and accounting for Boulder-based cybersecurity firm LogRhythm.

During most of his career, Cire’s accounting and technical knowledge had made him a standout. At LogRhythm, he would be responsible for helping the company to develop a successful exit strategy, which eventually was implemented in 2018 when it was acquired by private equity firm Thoma Bravo.

“We were already over $200 million—Thoma Bravo wanted some fresh blood and new management because there had to be some housecleaning and stripping out of costs,” says Cire, who served as LogRhythm’s interim CFO before joining cloud solutions provider AllCloud last year. –Jack Sweeney

Cire: We established a 2020 budget that was approved when we had a board of directors meeting on January 6. We were 6 days into 2020, and we already had an approved budget. I’ve never been able to accomplish a budget approval so fast in my life. Meanwhile, we also had an internal management plan. Unfortunately, in 2020, this doesn’t win you any prizes because within 6 weeks the world had completely changed. Right? So, in March, we suddenly found ourselves in a reforecasting period involving the general management of our regions, as well as the CEO and myself and my FP&A team. Together we had look at what we saw and what amount of cutting we might need to do.

When it comes to our priorities going forward, we get a lot of inbound interest from potential investors. What they like about AllCloud as a company is that we have a senior leadership team that is structured very well. We’ve got people who have built and sold businesses before, so we are viewed as a good platform play for additional acquisitions. But to do this, there has to be a good succession plan. There have to be good people below me. so I have to continued to build my teams and to build systems that allow for easy integration, an easy bolt-on of other companies. This is what we are currently focused on and will continue to be focused on for certainly the rest of 2020 and probably through the first half of 2021.

We’re still, to this day, probably two-thirds–based, 60% to 65%–based, in Israel, with a big presence also in Germany, Romania, Canada, and the United States. We closed a round of funding last December, our first round of preferred stock. We’ve already bought one U.S. company. We will use that series round in December to buy another U.S. company.

607: Exercising Discipline to Expose Trend Lines | Angiras Koorapaty, CFO, Reversing Labs Jun 14, 2020

Show notes

When a new CEO is recruited to lead a company, it’s not uncommon for the incumbent CFO to be replaced.

However, there are certain network-savvy CFOs who are able to muster enough influence with their boards to easily discourage incoming CEOs from implementing their displacement as part of sweeping the C-suite clean.

Angiras Koorapaty was not one of these well-connected CFOs. Or at least he wasn’t about 20 years ago, when he found himself forfeiting a finance leadership position to a newly arrived CEO’s CFO pick.

“This was a pivotal moment for me at the time, and it led me to do some reflection and to think about my career,” explains Koorapaty, who says that he later realized that as a CFO he had been too focused on the company’s internal operations and had failed to build important relationships with board members, investors, and other stakeholders.

Says Koorapaty: “As a result, there was a change in finance leadership.”

The eviction prompted Koorapaty to take action. Eager to put the experience behind him and open the door to new opportunities, he began working with a business coach, an advisor who specialized in coaching CEOs but understood the CFO role well.

Koorapaty says that he personally “set the agenda” and identified the areas that he wanted to address—but that the coach held him accountable.

“Oftentimes, I found him to be a pain in the neck. I did not always look forward to our calls, but I stuck with them. This made me a better CFO and a better partner for CEOs, and—most important—it made me a better communicator with my boards and a better relationship builder,” he explains.

Several CFO tours of duty later, Koorapaty is now CFO of ReversingLabs, a cloud-based security and networking company based in Cambridge, MA. “When I joined the company, a number of board members approached me with their views,” recalls Koorapaty, who says that he listened carefully before adding a number of items to his list of CFO priorities. For Koorapaty, better communication begins with listening. –Jack Sweeney

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606: Leveraging the Value of Culture | Will Costolnick, CFO, Hire Dynamics Jun 10, 2020

Show notes

Years from now, when Will Costolnick thinks back to the start of his CFO career, he will likely count the 12 months that preceded his appointment as CFO of Hire Dynamics as part of the same chapter, for—not unlike many of his CFO peers—Costolnick first found his footing at his new employer by slipping into a vice president of finance role for a year or two.

In Costolnick’s case, the interim role lasted 12 months, or just long enough for Hire Dynamics to reformulate its management ranks and expand its C-suite.

Still, Costolnick hit the ground running by using his interim credentials to begin putting in place processes that would accommodate new growth, which was indeed a priority for satiating the staffing firm’s newfound appetite for acquisitions.

Four years ago, Hire Dynamics had but 10 offices in the Southeast; today, this number is 47. The growing office numbers follow a recent spurt of deal-making by Hire Dynamics, which today boasts of being the Southeast’s second largest commercial staffing firm. Clearly, the timing of Costolnick’s arrival was no accident. Moreover, the firm’s newly charged CFO had spent four of his previous six years evaluating acquisition targets for LexisNexis Risk Solutions.

“We looked at 40 acquisitions during that period and closed on eight,” explains Costolnick, who served as lead finance analyst for the company’s internal mergers and acquisitions group.

“I think that this was really a pivotal moment for me. I would be sitting in a room with the leaders from product development, marketing, and sales, and I got to observe them as they looked at these targets strategically,” says Costolnick, who later served as director of finance for the Atlanta-based firm.

While acquisition targets are no doubt part of Costolnick’s world these days, so too are the processes and technologies that in the future will permit Hire Dynamics to satisfy the demands of an organization many times its present size. –Jack Sweeney

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