Today, we are talking with Almera Mahmood, who’s the CFO at Prolific, as she shares her thoughts on behavioral economics, a CFO perspective, and why it’s important for CFOs to get to the root cause and understand the behavior that’s helped driving the organizations. Welcome, Almera.

Almera (00:37):

Hey, Chris. How’s it going? Thank you so much for having me. I am really excited to be here and talk about this fun topic.

Chris (00:45):

Yeah. I was exchanging some messages with you on LinkedIn. I was reaching out, you were telling me something you were passionate about, and you dropped behavioral economics. I was so curious about that, right from the beginning, because there’s a lot of topics, a lot of conversation, a lot of CFOs hot things right now are AI, talent, value proposition, and this one was so interesting.

(01:06):

I think my first question I have for you is when you think about behavioral economics, what is that? And what’s applicable for the office of the CFO?

Almera (01:16):

That’s a great, Chris. Behavioral economics is something that is actually very old. But, it has resurged here in the last two decades. So many different fields and functions are using it. Marketing, we’re seeing the marketing function use it to sell. The sales function, and so forth. And even in finance, there’s a lot of application in finance, with respect to how people approach investments, and are people risk averse, and so forth. A really cool application of behavioral economics is not just external, but also internal. So what behavioral economics really is just a study of why people make decisions. Why do people make the decisions that they do? What influences them? Why do people navigate outside the natural laws of supply and demand? And how do we capture, or even measure emotion, and how does that play into decisions?

(02:20):

So from a CFO perspective, a CFO is constantly having to communicate, cross-collaborate, influence, and it’s really important for a CFO to also use the applications of behavioral economics to really be successful.

Chris (02:37):

I love that. It’s crossing over to the non-traditional stuff that we learn from business school. Business school-

Almera (02:44):

It is.

Chris (02:44):

MBA, all the things that it tells you not to do. I love you point where you said it crosses over, capturing that behavioral aspect of it.

(02:52):

Almera, for me, I think given my background in leading high-growth finance organizations, primarily in software technology and other industries, I’ve always looked at it that the CFO of the future is putting that chief feelings officer hat on. You got to get into the warm and fuzzies. You’d be surprised how many CFOs globally that I meet, and you ask them, “How are you getting in touch not with your direct team, but inside the business? How are you driving culture?” To your point, a lot of these behavioral aspects, it may go contradictory to what you learned in business school. For finance people, that blows their mind a little bit because we’re so used to hey, it’s very quantitative, it’s very number driven, it’s very black-and-white. But it seems to me, this behavioral economics of it says that hey, there’s going to be a little gray in that decision making that you have to be comfortable with, you have to be confident, and you have to have a level of connections.

(03:50):

My next question, you talked about this a little bit, is what are some of those use cases or examples that you see behavioral economics being super successful for CFOs inside of their business?

Almera (04:02):

Absolutely, Chris. We talked about how behavioral economics uses psychology to understand why people behavior the way that they do.

Chris (04:09):

Nice.

Almera (04:10):

So let’s take a step back and look at what that means in finance function. What’s the purpose of the finance function? What is the CFO’s role? It’s to ultimately strengthen KPIs. But, that doesn’t all fall within the ability or the reach of just the CFO or the finance function’s domain. It is something that takes a team effort. Being able to … Sorry, I don’t know if I cut out for a second. Being able to communicate, being able to work as a team to achieve organizational objectives is key. So that means that everyone has to be aligned, and everyone has to be on the same page when it comes to decision making. Every single person is different, every single person is wired different. Every single person approaches decision making in a different way.

(05:05):

Utility is a concept in behavioral economics. Utility is what are the choices people are going to make, and what are they going to give priority to? That is a key part of understanding, and what a CFO has to understand, and just the finance function in general, because the entire function is interaction and collaborating across the organization. It’s so important to understand, at a function level, what drives each organization, as well as at an individual level. What are the choices people are going to make? This also involves explaining numbers to a non-finance audience, and involves communicating with people who haven’t grown up with numbers. So how can people in finance be successful in communicating, and reaching, and basically getting everybody aligned towards that common, whether it’s a KPI, common goal, and so forth.

(06:00):

This is really where behavioral economics. Whether an individual is working across the organization or directly with the team, it’s important to understand why their behaving the way they do. One of the most … Talking about the ranking of the choices. Why are people going to prioritize profitability? Why are people going to prioritize a different type of KPI?

(06:22):

Let’s take a look at, for example, the finance function talking to a sales organization. So when a finance function is talking to a sales organization, there’s going to be … What does a sales organization focus on? It focuses on growth, sales, top line revenue. Those are the things that are top-of-mind, and that will be connected to the sales team will not only be focused on that, but often times incentivized based on that.

Chris (06:47):

Definitely.

Almera (06:48):

When a person, whether it’s a CFO or somebody within finance, is communicating with someone in the sales organization, they do have to understand that utility. They are going to prioritize anything that is focused on revenue, on sales, on growth. So in the conversations, getting their attention when communicating by focusing on those metrics is going to be key.

(07:17):

So what happens after that bridge is built? That’s where the bridge making happens. The bridge making happens is by prioritizing the discussion and the KPIs around the things that are going to matter to that sales organization. So once that bridge is built, now the runway is open for more conversation. You’ve built that credibility, “Let’s talk about what’s next.” Maybe the finance organization wants them to think about the credits, or the pricing, or the discount. Now, it opens up the avenue to go straight into some of those deeper topics once you have their attention, once you have their trust. But if a finance professional is going to approach a sales professional and go straight into discounts, you’re going to lose them before you even start the conversation. They’re going to say, “Excuse me, I don’t care if I gave them a 50% discount. I just won a $2 million deal.” That’s where it is really important to build that bridge. That’s one example of a finance professional interacting with a sales organization.

Chris (08:15):

Almera, I was sitting back here taking notes. This idea of utility, you just blew my mind with that. The way you articulated that … This is where finance teams fail. I think, too many times … I’ve always looked at it, Almera, when I worked in high-growth organizations, the sales and marketing piece were always my primary business partners. I think they were always my primary people because I knew what their priorities were. I knew how to influence them in what I needed to do. I never knew what the word was until I had this conversation with you.

(08:52):

I think the biggest takeaway in that sales example that you mentioned is, finance, we don’t only have to know the financial utility in the business. We got to know revenue growth, we got to know task priority, we got to know cash runway. We got to know this whole other element of people, and personality, and psychology utility. When you go into those different conversations across the … Because HR, it’s going to be completely different. You can’t go to an HR person and be immediately like, “Hey, we’re paying too much for people. We need to start getting rid of people.” HR’s going to be like, “Why is this finance person … “

(09:29):

When finance teams continue to go into that, we continue to perpetuate the same personality, the same prospect, the same value that people see inside of finance. This utility aspect of it, being able to diagnose that. This is where I think finance people have a leg up is if we can quantify and say, “Hey, if I’m working with sales,” and you laid it out. They care about growth, they care about making money, and they care about their commissions. I always looked at it to say WIIFM, that’s a sales approach. What’s in it for me? When you understand that for the audience that you can relate it, it gets to the point that you mentioned. Now, you didn’t build a barrier, you built a bridge to that conversation. And now, when you want to get into that deeper contracting conversations or, “We don’t need to be discounting 60%,” you’ve already built that, I would say, social utility with that partnership that built that bridge, to now you can navigate that bridge together versus what you mentioned. Coming directly in-

Almera (10:36):

Yes.

Chris (10:36):

And saying, “60% discount is bad, we shouldn’t be doing this,” when you didn’t take that time to understand. I love the way that you broke that down.

Almera (10:45):

Oh, hey, you learn over time. We’re all evolving, and we’re all growing in our professions. It’s trial and errors. And it’s also observation. We learn through watching others, and we learn also by trial and error ourselves. So we’re trying to find that brand that matches us most, and what feels authentic, and the best way to really just work as a team, and achieve organizational objectives.

Chris (11:08):

Definitely, definitely. I love this specific use case that you gave.

(11:11):

So taking it back to the team, the finance organization itself. I think a lot of the CFOs, VPs of finance, FPNA, accounts, all the finance professionals globally that are going to be listening to this. If you could give them that one-step guide, hey here’s the first … Getting to having that conversation with sales may be too much of a stretch for them. What’s that one or two things that they could takeaway to say hey, if you want to start implementing this social utility, if you want to starting bringing in behavioral economics in your finance organization, here’s the quick start guide. What would be the steps that you would recommend those CFOs or finance professionals to take?

Almera (11:54):

Sure. No, that’s a great question, Chris. Behavioral economics is so rich. It’s so rich. It gets into all the different biases people are prone to. And in some ways, we’re just starting to scratch the surface, and learning more about this field, and it’s application to business.

(12:11):

But what I will say is that, for me naturally, and I realize it’s over the course of maybe the last two, three, four years or so. But, for me naturally, I think the framing effect comes into play.

Chris (12:24):

Oh!

Almera (12:24):

I think that’s a very important one for other finance professionals. And also, the nudge effect.

(12:32):

So let’s talk about the framing effect. I can show up with a P&L of all the GL codes, and all the numbers, and say, “Here, look at all these numbers on a page that are very tiny. And look, here’s what the net income is.” I’m going to most likely lose everybody.

Chris (12:50):

Thanks.

Almera (12:51):

Before [inaudible 00:12:52] has even started. So while that information is extremely important, it needs to be part of the discussion, it needs to be part of the package, but we also know people have a very limited attention span. And for someone who hasn’t been professionally trained in numbers, they’re appetite is going to potentially be even less for numbers.

Chris (13:12):

Definitely.

Almera (13:13):

So that is something we just, as professionals, have to be aware of. So what does that mean? How do you frame the information in a summary page, or in a deck, or however we are trying to communicate and trying to get the information across? You’re going to frame that information in the way that it is the most impactful. The nudge effect talks a little bit about using the same information, but presenting it in a way where you are highlighting the things that people need to be paying attention to.

(13:49):

There was a study done about tackling obesity, and there’s been so many different laws and regulations that have tried to tackled child obesity. There was an experiment done, and what it had done is … It said okay, in a cafeteria, children are able to make all these food choices. What are they going to do? They’re going to go straight for the brownie. However, if we rearrange the same food choices in a way where all the fruits and vegetables, and all the good choices are in view, and you have the desserts and maybe not-so-great choices not necessarily out of view, but in a place where they’re not as front of view, then … After they had tested it out, kids were actually starting to make better choices.

(14:33):

So let’s take that application to a board presentation, or to a financial reporting package. I’m constantly having to take a look at all the information and say, “What are the key points? What are the key points I want to drive home? What are the key areas I want to highlight?” A lot of finance professionals are doing this. They’re trying to figure out what KPIs, information, pieces of data do they need to highlight. What are the things that management has to pay attention to? What are the things the board has to pay attention to? What are the things internal teammates have to pay attention to?

Chris (15:04):

Yeah.

Almera (15:04):

And for me, sometimes that is different depending on the function. So if I’m talking to marketing, that’s different. Like that sales example, and in your example, the HR example. When I’m talking to HR, yeah, the conversation is never the dollar-per-headcount conversation, per se. Because [inaudible 00:15:23] culture, and cohesiveness, and organization are very important. It’s about … Actually, where I work, [inaudible 00:15:30], they do a really fantastic job of making sure people are really aligned in the right roles. But you have to approach the conversation in a different way with every single organization. That’s where you’re really going to see that bridge built, and then the opportunity to go deeper, and talk more.

(15:45):

So really, that nudge effect, and then that framing effect are ones that I lean on constantly. Those are ones that I would advise for finance professionals to use. And they probably naturally are using those, and not even realizing it.

Chris (15:57):

Almera, what you just said, I’ve already been using those, and never realized it was the framing effect and nudge.

Almera (16:04):

Right.

Chris (16:05):

Literally, you’re connecting so many dots me for me right now because I think I’ve organically done these things, just like you said, trial and error, and just working with so many different teams, and building so many different organizations, that I really never knew that I was framing.

(16:21):

I always would position … If you’ve got 10 different things, I’ll do this now with my team. When we’re working with clients I’m like, “Get down to the three things.” When I’m talking with the CEO, business owner, or founder, I don’t want to be the smartest KPI person. I tell my team this. Our job is not to be the smartest finance person that they’ve ever seen. We’re meant to be their business partner to help them solve business problems from a financial lens. That’s exactly what we need to do.

Almera (16:50):

Chris (16:51):

I always challenge me team, and even myself. If I can’t distill down 10, 20, whatever the KPIs are to, “Here are the three most important ones,” and position those. Because it comes down to choice. I’ve always read this thing about when you give people more than three options, it becomes overwhelming for them to choose. People are like, “Oh, this is too much.” That’s why it’s small, medium, large. That’s typically where people lie. That is your example of the framing effect. You’re positioning that stakeholder, or that business partner, or that banker, or that private equity person and say, “Hey, here are the three things I want you to focus on.”

(17:30):

The nudge aspect of it is, “Here’s going to be the self-service of it,” and I’m going to have that front-and-center. Maybe it’s with HR and you’re looking at employee engagement, and you’re like, “Hey, I want to look at different things.” That nudging effect can be the same thing, just looked at from different angles. Might it’s positioning, maybe it’s conversation.

(17:49):

I think another way, if I was just to add onto the nudging effect where it’s been helpful for me, is having allies even outside the organization. If I’m really trying to drive deal completion and contracts being really accurate on the sales process, I’m going to probably partner indirectly with an operations person. And then, that way, people are seeing the same issue, but they’re seeing it from different angles and perspectives. And now, you get that buy-in and say, “Hey, finance is looking at it this way, because they want to make sure we have revenue recognition. But also, I see customer support gets a lot of complaints because it’s not really clear in the contracts.”

(18:30):

When you’re able to not only nudge from a different perspective that you’re doing, but also to bring others in that situation, so that way that stakeholder can get multiple perspectives of it. Yeah, I think those two are super valuable for finance professionals. And like you said, the way you ended it is, “You’re probably already doing this stuff, but don’t even know that you’re actually doing it.”

Almera (18:53):

It’s true, it’s true. Okay, let’s take a look, also … As you were talking, I thought of another example. Let’s take a look at FPNA. We are constantly, every month, every quarter, we’re looking at variance to plan, variance to prior month, variance to prior year. We have three, four different views of the performance. So depending on the conversation, we can use each one to drive whatever objective we’re trying to hit.

(19:20):

If it’s a forward-looking conversation, we need to talk about the variance to the plan, or variance to the forecast. If it’s a conversation where we’re celebrating our performance, let’s talk about our year-over-year growth. Let’s talk about how we grew 10% in sales, and how our fixed costs only grew 2%, and so forth, relative to that. And even, then that’s framing right there.

Chris (19:41):

Yeah.

Almera (19:42):

Someone come can, “Our fixed costs grew 2%.” Okay, that sounds negative. But if we frame it in a way that says, “Hey, we grew sales 10%, we grew gross margin 8%, and our fixed costs only grew 2%.” So there really is a way to frame it to get the desired, not feedback, but just the emotion really out of people. That’s what builds the bridge. That’s what builds the bridge. Knowing who I’m talking to, knowing my audience, not only on a functional level but at a personal level. Because even after the function, there are different motivators for each individual. So different people are motivated by different things, and just comes through time, and through building trust, and so forth. But you have to find that bridge. What is that bridge, what is that thing that’s going to connect me to that person? And then, how can that then be an opportunity to have a deeper conversation about maybe an issue, or something we do need to look at, or a cost that is growing. But if I go straight there, not going to happen.

Chris (20:49):

Yeah, you’re going to lose it. Part of what you’re saying right now, too, is setting the stage. I think a lot of times, working with clients, and then working obviously in finance, you’ve got to set the stage. It’s like setting the movie of what kind of movie is this going to be? I’ve been in organizations where we talk through difficult challenges that we’re facing. Maybe we lost a key customer, or a pandemic happened, or you’re not growing as much as you thought you were, or you lost a key employee. There’s always ways to even take negative and turn that into a positive. But then, a lot of times, I struggle with this and fail at this, where there’s something really positive and it ends up taking a negative. It’s always setting that stage to be able to know hey, this is what I’m trying to drive. When the end credits are rolling to this movie or this conversation, what do I want people to leave to take away?

(21:40):

And a lot of times, finance people, we want to leave our business partners to take away that it’s, “We command the numbers.” That’s an important part, I’m not discounting that. But more so than anything right now is we think about the value of the CFO of the future, we need to put on … Yeah, the chief financial officer hat, hugely important. But I think of that other hat, of that chief feelings officer, which gets to a topic of IQ versus EQ.

Almera (22:06):

For sure.

Chris (22:08):

I think CFOs need to level up that EQ, and probably tone down that financial IQ a little bit. Let’s resize that. Because right now, it’s 80% IQ and 20% EQ. Let’s focus on bridging that emotional intelligence that we have inside the organization, coupled with that financial IQ. I think that’s a real game changer. Yeah, so that’s where I think CFOs of the future, around IQ and EQ becomes hugely important.

Almera (22:37):

Chris, that is fascinating. I love how you were talking about IQ versus EQ, because it is so connected to all of this. You are spot on. I have, over the course of my career, been in so many different meetings where a finance professional is exactly what you said. Appeared to be the smartest person in the room, knows all the data, and while that is extremely important, we need that. We need that. It is important. But, we don’t need to show that all the time. We have got to connect to our audience, and we’ve got to show that there is this human component to each of us as well. So yes, we know the data inside out, we know the numbers inside out. But we have to pull ourselves out of all of that and say, “Okay, when I’m here, I am not trying to prove that I know all this. That’s why I’m in the job.”

Chris (23:29):

Yeah.

Almera (23:30):

“That’s why they hired me. I’m in the job because I can do this. But now, I’ve got to help support them, be an advisor. What are the key pieces of information that are going to help this project, or help this organization, or help this objective move forward?” That’s where we need to be thinking outside the box, and transition into that. A lot of great finance professionals are already doing that, but that’s exactly what you said. That’s where the EQ comes in, definitely.

Chris (23:55):

Yeah, 1000%. Almera, I’ve loved this topic so much. My last question for every guest that I always ask, and this is the one for you. What is your number one hot finance trend and why?

Almera (24:08):

Oh, I’m going to say what is very common right now, which is AI.

Chris (24:14):

Almera (24:19):

Who would have thought? Who would have thought?

(24:19):

With all these different forecasts, Chris, saying that just the business world is going to completely change in three years. That’s where I think behavioral economics is even more important, because a robot can calculate numbers. A computer can calculate trends, and regression analysis, and all kinds of things when it comes to even very complex forecast models. But what’s going to take longer to understand is human behavior.

Chris (24:48):

Nice.

Almera (24:48):

Why people act the way they do, what motivates people. Some of these things can’t be measured. Some of these things just come from human, person-to-person contact. So those are the things, in my opinion, that are least likely to be phased out by AI. So that is where we need … This is actually how I encourage my team a lot about this. I say, “I don’t want you guys to just be doing the numbers. Make Excel do the numbers, make the system do the numbers. I want you guys thinking outside the box. I want you thinking about what comes next. I want you solving problems, I want you fixing processes, I want you connecting with others in the organization. Do not spend all your time calculating. If you are, we’ve got to solve that.” That is where all of us, as finance professionals, if we focus there, again, I don’t see that getting phased out anytime soon, but probably at least risk right now of being phased out. That angle of AI is why I will say it’s very important for finance professionals to pay attention to.

Chris (25:48):

1000%. I think technology and AI can do the calculations, what it can’t do is build the communication, the collaboration, and the connection. It talks through everything that you talked about in this conversation, around focusing on the right scene, setting the right stage. Making sure that we’re thinking about emotion intelligence of the business and connecting with the business. I think this has been such a great conversation.

(26:12):

Almera, if people want to learn more about you, learn to connect with you, want to learn more about how you institutionalized and implemented behavioral economics on your finance teams, where can they find out more about you?

Almera (26:23):

Sure! Sure, Chris. Just holler at me over at LinkedIn. I am on LinkedIn, Almera Mahmood is the name. I am happy to connect with people.

Chris (26:32):

Awesome, awesome. Almera, thank you so much for your time and enjoy the rest of your day. Thank you so much.

Almera (26:38):

Thanks so much, Chris. I appreciate it, this was a lot of fun. Thanks for having me.

The post Behavior Economics Explained from a CFO Perspective appeared first on Mesh.

Today we’re talking with Steve Robertson, the CFO at HDMI Licensing Administrator, as he shares his thoughts on the first 90 days as a new CFO, a playbook for success, and why it’s important for CFOs to make sure they focus on the people, the process, and the partnerships inside of their organizations. Welcome Steve Robertson.

Steve Robertson (00:43):

Thanks for having me, Chris. Good to see you.

Chris Ortega (00:45):

Yeah, man. Coming in and like I said to all the listeners, all the accounting finance, FP&A CFO professionals, I had the honor of sitting and seeing one of your presentations earlier this year, and it was really about that playbook and that guide, it’d be the first 90 days of success. I think not only for CFOs, but anybody walking into a finance leadership role, that first 90 days is so critical to people. It’s so critical about setting the tone, it’s so critical about getting the understanding of the business and really laying down that framework. Jumping right into it, my first question that I want to have for you, Steve, is what are some of those important things that a new CFO needs to focus on in those first 90 days?

Steve Robertson (01:27):

In thinking about it, the CFO role is really interesting, especially the first one, because typically someone’s jumping into this role having 10, 15, 20 or more years of structured finance and accounting experience, right. Going from that to actually being one of the two or three key decision makers in the entire company takes a little bit of an adjustment, right. There is a steep learning curve anywhere you go, whether it’s your first CFO role or your 10th CFO role, to be quite honest. So really the major expectation as you come in is really to meet and greet, to learn, to listen, to integrate and perform as quickly as you can. It’s really important to learn the company language of the new company that you’re in. You may have been super successful going up the corporate ranks in Company X, now you’re CFO of company Y, and a lot of times the corporate culture, the corporate DNA is fairly different.

(02:29):

So you can’t treat it like bandcamp, take your playbook from company X and be 100% successful in company Y, and I’ve done that, sometimes successfully, sometimes not successfully, in prior roles. You really need to listen and learn and meet folks and talk to them, have coffee with them, do happy hour, whatever’s politically correct, so that you can understand how each of the key internal and external constituents work. So that you can take what you’ve learned and accumulated over your career to create your own playbook as to how you’re going to be successful, how your team’s going to be successful, moving forward in your new CFO role.

Chris Ortega (03:08):

Yeah, man, I think that’s awesome and I love how you broke it down and learning the business, and one of the pieces that I want to dive into a little bit more from that you talked about was not one thing that you said, was like, “Hey, I got to go in and try to look at the financial statements, go in and look at EBITDA, look at revenue growth.” And this is what I love your perspective on, it’s taking a more qualitative view versus a quantitative view. What are the quality of the people? What’s the culture? What is the leadership style?

(03:38):

When I look back over my experience in leading high growth SAS businesses and coming into finance roles, I remember the first one, this is a long time ago, when I was coming in as the first finance leader, I was coming in, and the mistake that I made, Steve, was that I came in and in the first 90 days I didn’t take that approach of learning. I was like, “We got to change this, we got to go get this system.” I came in not about trying to understand, I came in and was trying to, like you mentioned, run that playbook that I was running before, and I was like, “Nope, we need this system, we [inaudible 00:04:10], we need to go do this, we need to have this.”

(04:11):

And it was like that shock absorbent, and I remember my direct manager who was the leader of our America’s operation, he sat me down and was like, “Chris, everybody understands that you have all of this experience and this knowledge and you know how to do this, but you’re missing out on the opportunity to connect with people. You’re coming in, massive amounts of change, and of course you’re going to have a lot more success and buy-in from people when you build that connection first and driving the change.” So talk a little bit more about that people aspect of it. What are some things or some best practices that those new finance leaders, those new CFOs can do to better connect to the people of their team and then also inside the business?

Steve Robertson (04:56):

Yeah, you bring up, your example was I think it’s a common example, right? A lot of times CFOs are brought in because they have a certain experience base and they have a certain perspective, and companies are typically looking for some type of change. Whether it’s a privately held company that’s looking to eventually go public, and they want to glean from your experience in getting them there in the right way, or it’s a public company that’s looking to either grow or change, dealing with M&A or things like that. And it’s really important to, “Let me step back.” There’s what I would call, “Put your pants on, type things,” like you described that you absolutely have to do when you come in.

(05:37):

You’re the CFO, so everyone’s going to expect you to understand at a primal level overall financial health of the business. So you do need to come in and you need to make sure that you understand the financial statements inside and out, that you understand the budget and the forecasting process from the bottoms up. Because when you’re going through the interview, you’re getting a high level of that, but then once you start, you’re responsible for all aspects of that. So really understanding it, getting into the weeds those first few weeks with your team to understand what is the financial help? Are the cashflow forecasts off or are they on? And if they are, why are they off or are they on? You need to understand those types of things.

(06:21):

What are the key accounting practices that the team is following? Certainly for public companies, you can read 10-Ks and 10-Qs and get things at a high level. But speaking to your team, speaking to the audit partner, speaking to your insurance agents, your insurance brokers, your bankers, your investor relations firms to understand what issues, what color commentary is there to all the things that you’re reading in the Ks or the Qs. Or with private companies, really diving into those areas that you’re ultimately going to need to document in a 10-K or 10-Q should you go public down the line. How did the last couple of audits go? What were the issues? How are the internal controls? What do I need to focus on and prioritize? And how is cybersecurity and AI addressing things? And I’m sure we’ll cover this downstream, but these are sort of things that you absolutely have to understand. That’s one, you have to do that, right.

(07:18):

The other thing that we alluded to, and I think you can’t miss this opportunity, is really meeting and creating good relationships with the key stakeholders. There’s internal stakeholders such as your direct reports, which you have to get with right away, right. First week or two, you’re really focused on them so you can understand the strengths and weaknesses of your organization and figure out what the gaps are so that you can start planning your CFO playbook for your first year to two to three, et cetera.

(07:51):

There’s all the external constituents, your peers, obviously the CEO and the board, but also the other C-suite folks that you’re going to need to partner with. And then the key outside stakeholders, like I said, your audit and tax partners, key investors, analysts, investor relations, all those people that will help you tell the story of the company from a financial perspective. I think those are key, and for a first time CFO I think is really important that not too many people really focus on, is make sure that you have a mentor, someone that had the CFO seat before that you trust that you can go to as you’re going through your first several weeks and say, “Hey, I’m seeing this, what do you think? Who you can bounce ideas off.

(08:34):

This is not a new sort of playbook that you’re jumping into as a first time CFO, there are other people that have been in your seat that can provide really good feedback. And I’m sure the audit committee chair or the qualified financial expert on the board would be someone that you definitely would want to form strong relationships on the outside. But I think having a mentor that’s on the outside that you can really confide in and ask questions and validate some of the things that you’re seeing or the conclusions that you’re drawing, and the next steps that you want to take, I think that could be really helpful.

Chris Ortega (09:06):

Man, that’s awesome, dude. Breaking down those three elements, the tactical piece, right, diving into the budgeting, diving into the forecasting, diving into the systems. The second piece that you talked to is the partnership side; internally, externally, outside stakeholders, and your third piece of advice, Steve was spot on. I think too many times people walk into a lot of roles, there’s people that done this countless thousands of times, man, you don’t have to go reinvent the wheel and leverage that knowledge. And this brings up a fundamental gap that I think a lot of leaders have, and I face this, right, maybe you face this in your career, it’s when you get to that highest level of the CFO or whatever that highest level is in your finance organization, people just think, “Hey, the CFO is always going to have all the answers,” and no CFO is going to always have the answers.

(09:54):

And that mentorship side that you talked about, being able to leverage great people and just say, “Hey man, I’m maybe dealing with this challenge around this monthly close process,” or “I’m dealing with this challenge and dealing with these difficult bankers,” or, “We’ve got these audit challenges.” Being able to create a community of people, I call them my personal board.

(10:20):

I learned this concept from a great CFO, her name is Shannon Nash and she’s a CFO at Wing. She talked about creating a personal board of advisors of great people that you can go to get mentorship, get advising on, because I think a lot of times you come into this new role and you feel like you’re on this island by yourself, it’s no man, go leverage people, go reach out, go connect, go say, “Hey, I’m struggling with this, I know that you probably have experience with this. What are some things that you’ve learned.” Now you don’t have to reinvent the wheel, I got a situation, let me see how that applies. Maybe I have to customize it a little bit more to the situation I’m in, but now you can accelerate. So that idea of mentorship, man, is super important.

Steve Robertson (11:02):

No, you bring up a good point, and Shannon is great, in fact, she’s a good mentor of mine as well. And the good news is as you state, there are a lot of resources out there for CFOs that you can leverage immediately to get that type of soundboard, if you will, or repository of information. There’s a lot of organizations such as Financial Executives International, FEI, that a new CFO can join, and you typically have monthly in-person and virtual meetings where you discuss current topics, things that most modern CFOs are dealing with, and that’ll also have websites and sort of FAQ type chat rooms where you can actually deal with things like specific financial technical accounting topics and how you’re interpreting them, things like that. They’re readily available, it’s just a matter of making sure that you gain access to that type of information.

Chris Ortega (12:03):

And I love your point around that because there’s so much resources out there, and this is where I get to where you don’t have to start from scratch. You don’t have to go connect with people that is, “Hey man, I’m struggling with this, have you encountered this or have you not encountered this?” I think that’s a good point to make.

Steve Robertson (12:21):

I think the key distinction for me is, and you said it, is the CFO is expected to have all the answers, I don’t know that’s necessarily the case, I think the CFO is responsible for getting the answers. A lot of the answers they’re going to have, but the ones that they don’t have, they should be able to, like you said in Shannon’s case where you have a board of advisors, you need to know where to get the answers, and be able to come back and provide those answers in a timely and relevant manner. So that is the role.

Chris Ortega (12:51):

And I think to me, one of the things that you talked about that’s hugely important, that probably traditionally wasn’t as important, like cybersecurity and this prevalence of generative AI inside the finance organization, right? That has been, now typically when you think about the office of the CFO, we’ve always been the risk people, anything around business risk when it comes to operational insight, this whole cybersecurity element now, whether you’re at a tech company or not, this is becoming a huge portion of it to where, does that sit in a combination with the CTO or the CIO and the CFOs? But because cybersecurity is a risk portfolio, that’s something you got to be knowledgeable about. So tell me a little bit of your experience coming on as a new CFO, right. What are some things that CFOs need to be thinking about as it relates to cybersecurity, in their first 90 days?

Steve Robertson (13:48):

I think the first thing you want to do is, again, for public companies, there’s all sorts of requirements in terms of documentation in the public documents, your 10-Ks and your 10-Qs, really it’s understanding your risk profile relative to cybersecurity because we’re seeing major conglomerates get taken down by phishing expeditions and things like that. I sat in a recent director’s conference at Stanford that said, of those publicly traded companies that got caught in fishing ransomware, there was something north of 70% of these companies ended up paying the ransom, right. Because the access to data is so important for these companies, they have to be up and operational, that shit is what it is. So from a CFO’s perspective, where do we sit on the risk spectrum? Are we a 1?, meaning really low risk, we’ve got all sorts of safeguards in place, our insurance coverage is sufficient if something were to happen, or are we a 10 and we’re loose, we have a long ways to go to safeguard our access.

(14:56):

Because that’s what I am as a CFO, that’s what you are as a CFO. Your number one responsibility is to safeguard the assets and generate long-term value, typically shareholder value for your investors and your stakeholders. Understanding where you sit in the risk band is really important. And then if you’re in the high risk category that you automatically know that it’s going to be a major priority to figure out what it’s going to take, and to inform the board and the rest of the executive team what it’s going to take to get us from high risk to low risk. What it’s going to cost, what sort of resources, what other departments are going to need to be involved in this process so that the transparency is there.

Chris Ortega (15:43):

Yeah, man, and I love that point too, and I love your example of that insight, that data insight that you gave around that Stanford conversation that’s super insightful. I was just reading, and I forgot the tech company’s name, but it’s a large tech company and they came across a cybersecurity threat and this is how it came in. I remember the article and it was talking about how one of the bad actors described themselves as a high level executive and they just went through the support system. So they called customer support and says, “Hey, I’m Chris Ortega, I’m the CFO at ABC company.” And he said, “Hey, I need you to send me to reset my password. Can you reset and send me to this email?” And the customer service person was like, “Oh my god, this is the CFO of the entire company, I need to give them information and access.” And it was as quickly as that, and it brought this entire company down, it literally brought it down.

(16:39):

And that’s a great example of where I think it’s a partnership side. I don’t think cybersecurity is just the responsibility of the CFO. It is definitely one of those things that you got to partner with it, you got to partner with business, you got to partner with operations, you got to partner with HR to make sure you have all the training, that people know what phishing things are. Because having a business, if you’re a tech company, having that tech company down or users not able to access stuff, that’s a huge liability for the organization. So I think as we can as CFOs, branch out and extend that partnership, which is that second element that you talked about in that playbook. “Hey, how can we partner together to know I can bring in the financial acumen of what this risk can have to the business. You can bring in the technical acumen of what we need and systems and processes and procedures and people to, we need to mitigate that risk. How can we partner and collaborate together?”

Steve Robertson (17:40):

Absolutely. So as we talked about since your first 90 days coming in, I think the key thing is understanding the financial health of the business and really try and determine the top four or five areas that could impact that, both positive and negative. And I think cybersecurity is definitely one of those areas that most CFOs should definitely make sure that they understand where the company sits from a risk perspective.

Chris Ortega (18:09):

Love that man. And looking at that playbook, again, deciding those top five factors, I think within 90 days you have a great assessment. So when I shared that example where I completely failed and fumbled because first month in there, I’m trying to make all this change. The second time I come into this really high growth marketing platform company, I was like, “I am not going to make any changes, I’m not going to make any recommendations, a great mentor told me this, one of my personal brand people. He says, “Chris, when you walk into the next role and walk into this next leadership opportunity, seek first to understand, then be understood.”

(18:50):

And when I came into this next opportunity and I spent the 90 days, I’m surveying the people, I’m sitting in the meetings, not just finance, I’m sitting in sales meetings, sitting in operational meetings, and after that 90 days, I remember meeting with the CEO and the COO and we sat together and I said, “Hey, look, based on my assessment of looking at the people, the processes, our partnership, our platforms that we’re using, performance and profit optimization strategies that we’re doing, here’s where we’re at, here’s our baselines, here’s the baselines of everything that we’re at. Here’s the next things that we need to be doing to go from baseline to improve.” Or if there’s things like this is going really well, nothing to change there. Now you’ve got a course of action to execute on, right. Now you’ve got a more baseline through data, through relationships being built, through information to go through, I love your analogy of those five factors to look at, because that to me, that’s the place to start. Now you go build your baseline assessments on those five key factors.

Steve Robertson (19:53):

No, absolutely. You get a really good opportunity in the first 90 days. In some instances you get a little bit of a pass in terms of making big strategic decisions because no one’s going to expect you to know everything that you should know as a CFO the first 90 days you come in. So it’s a great opportunity for you to really build that connective tissue with the key stakeholders, your team, really understand how they work, what kind of coffee do they like, right. Are they early risers or are they late risers? The CRO and the CMO and the VP of R&D? How do they digest financial information? What kind of information are they getting? Is there a standard dashboard that we can provide to them that’s easy for us to create and disseminate to them? It’s a great opportunity to really understand the DNA of the company and to figure out how to infuse your personal DNA into the DNA of the company.

(20:54):

Because if you do that, you start to build credibility. Once you’ve built credibility within the company, then change can happen more organically and with collaborative buy-in. And I think that is super important, because a lot of times if you come in and make a bunch of changes, scorched earth, bandcamp, “I did things here, it’s going to work here.” You create a lot of resentment because in most cases, everyone’s worked really hard to get the results that they’re getting before you walked into the door. And acknowledging that and determining what still works and keeping that going, and then working together with the team, whether it’s your own team, the executive team, the board or whatever, and then taking it to the next level of optimization, of performance, will really help most CFOs get off to the right start.

Chris Ortega (21:47):

Oh yeah, totally man. And that aspect of it is when you talked about the credibility, that is so important to establish, and the other point that you mentioned, you get that passed in the first 90 days is, all CFOs finance leaders listening do not come in that first 90 days and say, “Hey, we’re completely making an ERP change.” Do not do that, right. And this gets into my next question I want to talk to you about, right, that’s one of those missteps, do not come in and just immediately be like, “Hey, for the last 10 years of my career, I’ve used X system, we don’t have X system here, so one of my first priorities is getting rid of that system.” I can’t tell you how many times Steve, I’ve seen CFOs and I see it, right. And it gets down to this myth that they think technology is going to solve all their problems.

(22:36):

So they come in, “I used this technology at the last and it was great, so we need to throw out this whole technology and we need to get the technology that I’m comfort with.” So my next question to you is, what are some of those common pit falls that you’ve seen, or these are the things, do not make these mistakes in these first 90 days. Because they significantly limit your impact and they significantly limit your ability to build that forward-thinking finance organization. What are some of those missteps that you’ve seen?

Steve Robertson (23:08):

I think the biggest misstep that I’ve seen, or maybe I’ve even dealt with in some of my early executive roles, is trying to boil the ocean. Meaning you walk in the door day one and it’s this fire hose of things that you need to understand and execute on. A lot of times, I think it’s easy for high level executives to set this priority list, 20 things that I’m going to get done. 20 is too much, what are the 3 or 4 things that you really need to knock out of the park? And oh, by the way, what are the three or four low-hanging fruit things that you can knock out that can show value very quickly? I really think that it’s all about focus when you come in. We talked about it in March when we were at that convention together, the mantra a mentor told me was, the three Ps, right; people, process and priorities.

(24:09):

So I think it’s really coming in and being focused, and understanding that yes, there are 20 or 25 major things that need to be done, but what are the top 4 or 5 things. At the end of 90 days, you should be able to articulate what are the 4 or 5 things that really need to get done that first year you’re on board, and how does that impact your CFO strategy? How you’re going to run your organization, what’s working really well? Where are the gaps? I think that focus will really will help new CFOs come in and be successful because you can’t be successful on your own, you need your teams. The whole concept of building the relationships and really understanding what people do, and not draw assumptions at the outset, but after you’ve learned how things are doing. In your ERP example, how is the current ERP system running?

(25:06):

I may have a bias for NetSuite and someone else is on QuickBooks Online. How is QuickBooks Online working in this environment? What changes can be made to better optimize it? If the team is more experienced and trained on QuickBooks Online, what is their impact? What’s their input? What are the pros and cons there? If you have opinions about NetSuite and that’s what you’ve used in the past, get their thoughts on it. Because again, I think as a CFO, you’re like the military or a high performing sports team. You’re the captain of a high performing team, and in order to get the best performance in military situations or in sports situations, it’s not necessarily that you have the best 11 people, but you have 11 or 12 people that are on the same page, that are doing the same things, thinking the same way and marching to the same drum beat. Those teams can achieve a lot more than 11 super talented individuals that are not on the same page, and I think you and I have seen that time and time again.

Chris Ortega (26:13):

Steve, I was sitting here taking notes, man. And for all the listeners on that, you need to go back and rewind everything that Steve just said to that. That is absolute lottery winning advice. And I want to tie it now to your sports analogy that you mentioned. What are those 3 to 4 home runs that you want to have? These are the 3 to 4 home runs I want to knock it out the park. And then what are those 3 to 4 at bats? I just want to get on base, being the low-hanging fruit that you mentioned, right. Because your analogy of boiling the ocean, we all struggle with this, man, I struggle. Here’s the thing about being a super talented, awesome CFO like you, Steve, is that priority list is always going to be more than what you have capacity to get done, it is always going to be that way.

(27:01):

I’m leading a global fractional CFO and advisory service company and my priority list, I’m never going to get through, have a day where I feel like I got through everything I need to get done. But if you’re able to, like you said, have that focus to say, “Here are the 3 to 4 home runs that I just want to knock out the park, and that takes time, and here are the 3 to 4 at bats that I just want to get so I can add value to the organization. And also as well too, get some confidence in yourself, you want to get that snowball and that train going, and what are the 3 to 4 things that I know that I could just get at bat and people are going to be like, “Man, I’m so glad that we got this kind of CFO that I’m working with.”

(27:40):

And I love how you broke that down, and your analogy of that high performing team. We’ve all been in roles where you got people running in different directions. It doesn’t matter how talented you are, how much skills you have, how much passion, how much experience you have, and my mentor always told me, I think it’s a famous quote, “If you want to move fast, move alone, if you want to move further, move together.” That’s the way to do it. Hey me, Steve, I have one last question for you, and I always ask my guests this question, what is your number one hot finance trend and why?

Steve Robertson (28:13):

AI. Now, the thing is I’m in Silicon Valley, right, so I should be on the forefront of Artificial Intelligence and machine learning and all these things, but I’ve been in maybe five, six conferences over the last 12 months, and you’ve been in a lot of those as well, and Artificial Intelligence and cybersecurity are the two topics that are prevalent across, and not just finance related, but a lot of business related. Because it has such potential to impact everything that all of us are doing today. Some of the fear is that it renders some of our finance team irrelevant, right, because in theory, ChatGPG and Artificial Intelligence can do some of the tasks that maybe some of the lower level staff that you have does today, it doesn’t necessarily replace the analytical side of things. But I do feel that today’s CFO definitely needs to be current on the latest trends, and AI is not going anywhere.

(29:19):

It’s tough to say whether it’s going to be as impactful as the Terminator movies, it’s going to take over certain cities and things like that. Probably not, but it will fundamentally change how businesses are thinking about how to move forward. And I’ve already talked to CFOs of certain Fortune 500 companies that do have the budgets to explore this aggressively. AI, CFOs need to understand how it could help you be better, stronger, faster, for sure.

Chris Ortega (29:50):

Yeah, man, I think every guest that I’ve asked that on the show, man, it’s like AI pops in there and I would agree a 1000%. I think AI is obviously here to stay, it’s not going anywhere, man, so definitely agree with you on that. Steve loved the conversation so much, man. Hey, if people want to learn more about you, if they want to connect with you, if they want a deeper dive, more into this playbook mentality and all the things that we talk about, where can people find you? Where can they connect with you and where can they learn more about you?

Steve Robertson (30:19):

Certainly, I’m on LinkedIn so that you can certainly find Steve Robertson on LinkedIn. That’s probably the place that you can find me the easiest, I would say.

Chris Ortega (30:29):

Awesome. Yeah, and I would recommend that all those accounting, finance, FP&A, CFO, VP, leaders, definitely connect with Steve. Steve, it’s been an absolute pleasure man, having you on this podcast. I was sitting here taking notes of so much different wisdom and insight to set people up for success. Whether you’re walking into that new CFO world or you’re walking into that new finance leadership role. Steve, thank you so much for being part of CFO. Trends, man. Thank you so much.

Steve Robertson (30:53):

Thanks again for having me, Chris.

The post CFO Playbook: First 90 Days appeared first on Mesh.

Welcome to another CFO TRENDS. Really excited for this conversation. Today we’re talking with Lance Rubin, who’s the founder of Model Citizn, as he shares his thoughts on the fresh CFO and how data and financial modeling can really help level up the baseline value of the Office of the CFO. Welcome Lance Rubin.

Lance Rubin (00:39):

Thanks Chris. And a pleasure to be here even though it’s late at night. It’s worth for late nights. Thanks, mate.

Chris Ortega (00:43):

About this topic today. I think it’s coming off of a summit. I was just at here in LA about a week ago. The title for this podcast is going to be, “The Fresh Future for CFOs.” And when I was thinking about this topic, I’m like, “Man, there’s no better person to talk about this topic with than you.” You’ve been in the finance modeling space, CFO space for so long. I know we’ve done a lot of podcasts together and this Fresh Future. I think CFOs now really have a tremendous opportunity to transition from the value we used to provide with the numbers.

Lance Rubin (01:19):

And risk as well. I think there’s opportunity, but there’s huge risk if they don’t.

Chris Ortega (01:24):

Yeah. And I think that’s where it comes down to the business as well too. So jumping right into it, one of the questions I just want to have and get your insights on is what do you see is the biggest challenge that is holding back courage CFOs to adapt a lot of these future mindsets, these skills, and this value proposition in the business? What do you think is that biggest challenge?

Lance Rubin (01:46):

So there’s a couple of parts to it, but if I have to say the single most challenges that don’t have a clear strategy for leading change. So I think that they all understand the why of, “Why they need to change?” They’ve read the rhetoric. Rhetoric’s been around for a long time. I don’t think that they’re very data literate either themselves or the team. So I think you can’t build a strategy and know where you’re going and have a vision for finance if you don’t understand the fundamentals of data.

(02:15):

And then it’s navigating that constant change. They all know they’ve got to do it, they just don’t know how. I’m a great believer in Simon Sinek’s Golden Circle and how, why, and what. They all know the why. They know they need to add more value. They know need to get rid of manual projects. That’s obvious. And often that’s the thing that holds people bought. They don’t know their why. They don’t know the purpose. So they understand the why. They can understand conceptually the what.

(02:42):

In terms of, “Okay, we need to have rolling dashboards, we need to have rolling forecasts.” They can understand that. It’s that middle circle that many of them don’t know how to do it. “How do I execute and deliver when I’ve got…” I might have Xero, I might have SAP, I might have NetSuite, I might have any number of different ERP or accounting systems and I only know how to use one of those. So that’s the first charge.

(03:09):

I’ve got all these tools. I’ve got Excel, I’ve got Google Sheets, I’ve got Power BI, I’ve got so much tech coming at me. I’m like, “Okay, where do I start?” So the how becomes very difficult because they just don’t understand, “How to assess technology? How to pick the right technology?” And technology is one thing. There’s three things. There’s people, process, and systems. So how do they pick the right systems, how do they pick the right people, and how do they get clarity on the right process?

(03:35):

And I just think that’s holding them back, so they don’t have a vision of, “How to do it?” They may have a vision of, “We need to, we should.” Or they go and pay expensive consultants to try and do it, but every time we’ve come in to build models and build things, we’ve seen this problem, we’ve seen this challenge. And whilst we only building one element of that, which is the financial models or the data analytics, there’s a much bigger data culture that needs to be embedded in the organization. And that’s for the CFO to lead and they’re not.

Chris Ortega (04:06):

Facts. Yeah, man, I think you’re totally right and I love how you broke it down. The first point that you mentioned was not having that clear strategy around change. That has been probably I think one of the biggest changes that the Office of the CFO has had. I get the opportunity to not only with fresh that P and A work with a lot of different clients, but I get to meet so many different CFOs across the globe and you hit the nail right on the head. They know why this change is here, they know what it’s related to, but it’s like that first step of getting that train off the track is, “Okay, so how do I start this train? How do I start thinking about this stuff?” And I love how you broke it down to where that middle gap of, “How to execute it?”

(04:47):

‘Cause there’s a lot of great CFOs that I think just have this paralysis. There’s technology everywhere, there’s generative AI, there’s this talent development change, there’s this changing value proposition in the business, and they’re just stuck. They’re like, “I know all this stuff I need to do. I know why we need to do it.” But I’m just like, “I don’t know where to go.” If you were to give that first step for a CFO that says, “I’m with you Lance, I know the why. I know the what.” What’s that first step to get them down the road of understanding the, “How?” How would you advise or coach or lead organization that says, “We need to take that step.” What would be your insight?

Lance Rubin (05:32):

I’m about to do it actually. I’m about to go back into an organization and actually become an interim CFO for six months on a contract and I’m going in not to become a CFO full time, but to go in and basically revamp, I’m calling it my revamp project. And the first thing I’m going to do is start simple with Excel because everyone’s got it and use Power Query. That’s it.

Chris Ortega (05:56):

Nice.

Lance Rubin (05:57):

It is so simple. It’s one of the most powerful automation tools and you are extracting data from anywhere. It doesn’t even matter what system it is. You can just even get an Excel dump from a system, do some basic transformation and I just get the basics of automating a monthly process, a daily process or any annual process just with that tool. That’s no external money. I’m not going to spend anything. I’m going to upskill the team, so I’m going to invest my own skills. I’m going to train them. I’ve been training people on how to use Excel for a very long time.

(06:32):

Now I know how to do it really well. If I was a CFO and I didn’t have those skills as in it wasn’t me, it was someone else, then what I’d say to them is, “Go get someone to teach your team how to use Power Query.” It’s the biggest investment. It’s a half a day, one day training session. The ROI on that would be not only infinite, but it’s going to be a very big percentage because the training I did just recently this week in Melbourne and I was showing people Power Query of a group of 25 people, four people had used it. And every other financial modeling trainer I speak to and every other Excel trainer I speak to says the same thing. Most people are not using it. They’re jumping into Google Sheets ’cause Google Sheets is more innovative and it’s cool and the business loves Google Sheets, but Google Sheets is not a powerful data tool. It’s not.

Chris Ortega (07:22):

Not. Definitely. I agree.

Lance Rubin (07:22):

It’s not. It’s anti. I’m actually going to call it, “Anti-innovation.” For finance.

Chris Ortega (07:27):

Wow.

Lance Rubin (07:28):

I’m going to call it out. I’m going to say it on Twitter, “Well, you hear it, you’ve heard it first here?”

Chris Ortega (07:31):

We heard it first from Lance. Google Sheets is anti-innovative.

Lance Rubin (07:35):

Anti-innovation. Now, yes, it’s great for connecting other data sources in the cloud and other stuff, but the first thing’s first, let’s just get the data prepared. Let’s extract it properly, let’s transform it, and let’s load it. ETL, that word or that acronym is seldom understood and known by CFOs. And that’s where it’d start. I’d start at the data process, start small, start at the monthly process and just grow from there because you’re going to save so much time.

(08:07):

You can then reinvest that in modeling, in dashboarding, in automation and you can then invest to investigate further. So every organization is going to be slightly different and that’s also the thing that’s quite challenging. CFO will go from one organization to another and be either have a great team around them, have people that have got great skills, that’s an easy role for them to do ’cause they just can point and shoot, and stuff gets done. Or they can go to another organization and the team’s incompetent, or they haven’t invested in skills and training, or they don’t have the right systems, or they ban Excel, which I’ve heard before.

(08:45):

A very large company in Australia, a major company banned Excel and moved everything onto Google and the finance team kicked up a stink and pushed back. And they eventually reversed it because it made it so difficult for people to work with each other because finance wanted to use Excel. No. Have you had an Excel spreadsheet that was running a month end with VBA? How do you move onto Google Sheets?

Chris Ortega (09:11):

Yeah, how does that even happen?

Lance Rubin (09:12):

How does that even happen? It doesn’t. And the innovation, I get rid of automation. If I’m doing Power Query and I’m getting something locally and I have a local file, “Do you want everything on the cloud? Do you really want to put everything on the cloud? What about private information with Google?” You’re handing the keys to them. That’s what people don’t realize with Microsoft it’s not done like that. And that’s a long-winded answer, but-

Chris Ortega (09:38):

No, I love it, man.

Lance Rubin (09:39):

… I’d hit Power Query hard and broad. And I’d look at it in all aspects of finance ’cause finance is just moving data. They’re moving data from a system; they’re adding some numbers and calculations. You can do calculated columns in Power Query; you can do all sorts of wonderful things and then I’m reporting it to the business or I’m using it for conversations.

Chris Ortega (10:01):

Yeah, dude, to share a story I remember, and I would agree, I think when you think coming in and getting those quick wins, so as ACFO, if you’re a finance leader, you’re like, “Man, I’m really trying to understand the how.” Getting to using prescriptive or predictive analytics inside your business, that’s like an elephant that’s going to be a-

Lance Rubin (10:22):

Long.

Chris Ortega (10:23):

… long-term win.

Lance Rubin (10:23):

Correct.

Chris Ortega (10:25):

But you just said the first thing you’re going to come into your new organization is finding a quick win that we can make some instant value. It doesn’t have incremental costs and it’s a system that everybody’s aware of. I think that’s great advice. And I remember the first time I came across back then it was Power Query, and it was an add-on to Excel. I think it was like 27 or something. And I remember Lance, the power of it. I was at a software company.

(10:54):

I was leading the FP and A function and I remember how I stumbled across Power Pivot and it was like I was trying to put a pivot table in a PowerPoint slide and this is the 11th hour of a board meeting and my mind is just scramble and I just mistakenly went into Google and I typed in Power Pivot and it changed my life. I’m telling everybody. As a FTNA person, as a finance person, my team uses it and now Power Query is inside of Excel. It’s a data model inside of it. And when I show people this and I’m like, “Back then it was like you had to enable the COMAD and for it to come in.”

Lance Rubin (11:35):

Correct.

Chris Ortega (11:37):

And it was like, “The Wizard of Oz.” Is like you were behind the scenes of Excel and I remember producing literally software. I was having relational databases with Salesforce, and I had it with our ERP system and we were using Zendesk, and we had that connected. I remember creating entire data models on the visual map of it inside a Power Query along with Power Pivot, and I was having software inside of software. It was doing everything for me, and people were just like, “How did you even do this?” And I’m just like, it-

Lance Rubin (12:08):

Just Google. It just [inaudible 00:12:11].

Chris Ortega (12:11):

… becomes a superpower at that point.

Lance Rubin (12:13):

Man, you just took my word away. It is a superpower. I hate that written in some my notes, but yeah, absolutely. It’s game changing and yet it’s not well known. It’s crazy.

Chris Ortega (12:25):

Yeah, it blows my mind, man. And I think that leads to my next question I want to ask you about, and we talked about Power Query, we talked about Excel. I’m the same. I agree with you 1,000% on Google Sheets. Let’s just be honest. Let’s just be really bold. Finance people are always going to use Excel. They’re not going to one day wake up and be like, “Oh my God, Excel, Google Sheets…” This is me, Lance, and I’m just being honest. Anytime I get a Google sheet, I’m like, “Download to Excel.”

Lance Rubin (12:52):

Chris Ortega (12:54):

I’m like, “I’m not working in this.” I’m like, “Hey man, just-

Lance Rubin (12:57):

To perform [inaudible 00:12:59].

Chris Ortega (12:59):

… download to Excel. Let me go back to what I know.” Getting to this other topic where we’re talking about technology. We talked about it, what are some other, I would say, technology stacks or technology strategies that you will recommend for CFOs to… Again, tie it back to that, “How.” You gave that first really great example. What are some other tools and technology out there that you think can increase the value of the CFO?

Lance Rubin (13:22):

So great question Chris. If I look at my own business, so I started Model Citizn as a financial modeling consulting business and we were all about Excel, but we were also using other technologies and add-ins inside Excel. I’m a co-founder of Excel Cloud. It’s an add-in that allows me to integrate to Xero and pull data straight out of Xero directly into Excel. There’s technology inside Excel, but then there’s technology outside Excel as well. ‘Cause we can’t just also always use the same tool for every problem.

(13:51):

So I’d probably go down the path of there’s grateful small data, medium-sized data, Excel is perfect. But when you really get into the bigger side of data, then you need to look at a BI tool and be a Tableau, Domo click or my favorite and honestly my recommendation, Power BI, then don’t go anywhere else. And the beautiful thing about starting where I just said Power Query is you’ve already learned one of the pillars of Power BI, because Power Query sits in Power BI as well. In fact, I learned, believe it or not, I learned Power Query first in Power BI before I learned it in Excel.

Chris Ortega (14:31):

Wow.

Lance Rubin (14:31):

Because when we were building models, I never used Power Query. I wasn’t dealing with data and rolling, I was just building forecast models mainly. Yes, we’d have some data, but generally it was just the tool that we had already had a mapping tool that really had an assumption mapping capability, just doing a little bit of, “What Power Query does anyway.” So we didn’t really need to do that ETL process. But as data became more complex and we needed to get into the model, we started using more Power Query. But Power BI for sure, power apps is massive.

(15:04):

So I think for me, the Microsoft Stack is huge. We built some really big systems with my technology partner Potenza. So we build full stack data warehouse, Azure SQL with Power BI, we connect Excel with ODBC, and we push and pull information between Excel and the data warehouse, and we visualize that in Power BI. We custom-build software to solve solutions, to solve problems that most software does 80% of what people need it to do. We do 100. So we actually, we scope, we understand, we do all of that and then we absolutely give them what they want and what it says on the tin is what they’re going to get. And it’s not-

Chris Ortega (15:46):

Nice.

Lance Rubin (15:47):

… “Oh, it’s going to get this, it’s going to…” “Now I’m going to have to go back to Excel because it doesn’t do this part properly or I’m going to have to use another tool.” But we build it end-to-end. So Microsoft Azure, in terms of cloud, you want stuff in the cloud I think generally in terms of processing and particularly when you’re sharing information, obviously with proper security, we’ve just been building a power apps for replied an end-to-end process for tracking agriculture stock and stuff. Again, these tools are phenomenal. And then yeah, start to dabble a little bit on ChatGPT has become my next best friend like I use [inaudible 00:16:27].

Chris Ortega (16:28):

For sure.

Lance Rubin (16:28):

And it’s generative AI and mid-journey for some images and even Bing Chat I use a bit. I haven’t quite got that comfortable with Bard yet, but Bing’s been great. Yeah, so I think there’s never an end. That’s the point. So the problem is that there’s too many shiny things that we don’t know where to start. And so you start big, as you said, you start with the elephant, you start going at this generative AI stuff and hang on, you can’t use generative AI or any of those fancier tools if you don’t understand the fundamentals of basic data.

Chris Ortega (17:00):

Facts.

Lance Rubin (17:01):

And it’s crazy ’cause you’re actually missing the point.

Chris Ortega (17:07):

Yeah. And I love that too, Lance, because I think you talk about something that I think is a traditional CFOs, “This is a myth.” This is one of the things a lot of traditional CFOs are like, “Oh, I’ll just get the shiny new technology and it’ll solve all of my problems.”

Lance Rubin (17:26):

Oh God.

Chris Ortega (17:26):

I’ll go invest in the six-figure software tool that this salesperson promised me.

Lance Rubin (17:33):

Correct.

Chris Ortega (17:35):

I think that adage of that adage is lets saying, “Hey, get technology to solve all of our problems.” That doesn’t necessarily work ’cause now-

Lance Rubin (17:43):

Never.

Chris Ortega (17:44):

… and this is where I think diving in a little bit deeper, and I loved your analogy of saying, “Find where technology compliments you and bring value to the business.” That’s really the awesome point. If it makes your job less about data aggregation, data mining, all of this stuff that honestly talented people don’t want to do, and now you freed up your capacity ’cause you leveraged the technology to, “Now provide more value, now to be a better business partner, now to be more forward-looking, now to be more collaborative.”

(18:14):

That’s what really where it compliments and really shines your power in the finance organization and just, “I see it time and time again with just…” At least software vendors do a great job. They do a great job of saying, “Hey, we’re going to solve all your problems.” And then you get into it and you’re like, “Man, this isn’t what I thought it was going to be.” When to your point, you already have things at your disposal. Microsoft’s entire suite, and I just read that Microsoft, I think in Q one, they’ve already starting to pilot their own FP and A tool. And I’m looking at it where you got Excel, which is the number one FP and A tool of all time, you can’t do anything with that. It’s always default going to be the number one-

Lance Rubin (18:52):

Correct.

Chris Ortega (18:53):

… FP and A tool. And then you got power, you got the data model, you got Power Pivot, you got the Azure marketplace, you got power apps, you got the entire suite of Office 365 that now can be leveraged and now you throw a FP and A tool on top of that, which gives you your traditional budgeting planning scenario and all the other studies-

Lance Rubin (19:12):

And copilot. [inaudible 00:19:13].

Chris Ortega (19:12):

A copilot.

Lance Rubin (19:15):

A part of [inaudible 00:19:16] just like-

Chris Ortega (19:16):

You got all of that in there. You got generative AI built into your Office, built into Teams, built into… I use it for emails all the time. I get emails and I’ll just like, “Hey, summarize this email or give me the three key points of it.” And we’re trying to respond. So I think that’s where that technology helps really compliment the value for CFOs that are bringing.

(19:36):

So another area I want to go dive into outside of the technology piece is more about the people aspect of the Office and the CFO. And I know you’re coming into that six-month contract and you’re going to be making it. You talked about your first step when you’re coming into the technology side, when you look at the people aspect of that, how, ’cause talent is another element of-

Lance Rubin (19:59):

Chris Ortega (20:00):

… challenge that a lot of CFOs are facing. What would be your quick insight around… Okay, coming into your new role that you’re going to come into as an interim CFO, how are you going to look at that talent and how are you going to look at that people aspect of it inside of this next engagement that you have?

Lance Rubin (20:16):

So Chris, I think there’s two elements. The first element is absolutely skills assessment.

Chris Ortega (20:23):

Oh, nice.

Lance Rubin (20:23):

So one of the great things that I’ve done having started my business, I recognized good people and not so good people having led people before in large organizations and those that are good are worth their weight in gold.

Chris Ortega (20:37):

Facts.

Lance Rubin (20:37):

And those that are not are like… It’s like cancer, it’s really toxic, it’s not great. They start to infect other people and they have to go. There’s no other buts or maybe, so one of the first things I’m doing is a data literacy test. So I give them some data in Excel, and I ask them to do stuff with the data. I recently ran an intermediate Excel training workshop; ask them some basic questions and I worked through each of these different formulas. Formulas like INDEX MATCH, VLOOKUP, HLOOKUP, XLOOKUP, if statements, sub-product, Power Query of course, and dynamic arrays and these tools. And so that’s the first thing I need to understand where people are at. It’s funny, I don’t look at CVs anymore when I hire people.

Chris Ortega (21:27):

Interesting.

Lance Rubin (21:27):

I don’t believe them anymore. Even when someone says to me, they’ve got advanced Excel skill, they’ve graded Excel, what does that actually mean? When someone says to you, “I’m graded Excel.” What does that actually mean? No one can-

Chris Ortega (21:41):

That’s true.

Lance Rubin (21:43):

… actually, defines each work. So what I do is I say, “I don’t want you to tell me what you think.”

Chris Ortega (21:47):

Show me.

Lance Rubin (21:50):

Show me the money. Here’s a spreadsheet-

Chris Ortega (21:52):

Nice.

Lance Rubin (21:52):

You’ve got an hour, give it back to me and then I’ll see. And I took this from some of the stuff that I was doing with Modeloff back in the day, which is now transformed as the Financial Modeling World Cup.

(22:04):

And that’s what they do. They have an Esports for financial modeling and they’re doing wonderful things. And its that same mentality of I want people to learn, I want to have the best team, I want to spend my time. Now once I’ve got those that are on the bus… And even if someone doesn’t do that well in the test, but that they show innovation and they show keenness and they want to learn, then we can fix that.

(22:27):

But I need to then train them, and I need them to have a growth mindset. So a lot of it is actually, “How do they take feedback?” I’ll assess, I’ll look at all their results, I’ll have a conversation with them. And then after that I’ve got to communicate my vision, I’ve got to tell them, I’ve got to give them the comfort, I’ve got to give them empathy and understand where they’re at. And a lot of people will check out and that’s okay.

(22:52):

Older people say, you know what? “I just want to do month end. I want to come in, I want to do my balance sheet recs, and my P and L recs, and prepare the management PAC and I want to go home. And that’s it. I don’t want to do anything else.” And I’m sorry, that’s not a person. I know that’s what you do. But everything that you’ve just said can be automated. So a robot is going to do that. A robot is going to do all the reconciliations. It is going to generate all my management PACS. IT is going to potentially even generate commentary for me.

(23:22):

Now what I need the human to do is to read and understand the context and go have a conversation with people and influence. That’s what I want humans to do. I don’t want humans to be doing what they’re doing now, and that’s the journey that I’m going to take them on. And I’ve done it with my team. I’ve built a SaaS company and I know how it’s done. And I just can’t wait to go back into the finance team and look, if I was in finance and a leader like this came along-

Chris Ortega (23:50):

You are worth your way and go.

Lance Rubin (23:51):

… I would be excited as an employee-

Chris Ortega (23:53):

Oh, yeah.

Lance Rubin (23:53):

… I would be excited. Anyway, it’s going to be great, and I think it’s going to be a huge opportunity for people, for the organization, and let’s make it happen. They have a couple of weeks away and maybe we have a follow-up session on the podcast, but I can’t wait. Like I said before, “People, process, systems.” People are arguably the biggest component of that.

(24:18):

Not knowing you can have the best process, but if the people aren’t on the bus, forget the process and that will circumvent the process. If you’ve got the best systems in the place, if people aren’t on board to adopt new skills and use those systems, complete waste. So people are actually the most important out of the three and you have to focus on them first. That’s why I said the biggest challenge is that vision, because the vision talks to the people, doesn’t talk to anything else.

(24:44):

It might involve technology, it might involve process engineering, but it talks to the people. And the people need to get their hands around, understand it, feel like they’re being heard and really come on the bus and come on the journey. ‘Cause I think there’s exciting places we can go. And God [inaudible 00:25:02] wrote a post this past week about he was in an accounting firm and people wouldn’t go home to their families ’cause they had year-end and the people-

Chris Ortega (25:12):

I’ve been there, man.

Lance Rubin (25:13):

… I’ve been there, we’ve all been there. We’ve all had those. You just said it earlier. You had a board pack to get rid of it middle of the night, and you suddenly put Power Pivot and Google and found this thing. We’ve all been there because we didn’t have the leaders, we also didn’t have the tools.

Chris Ortega (25:29):

That’s true.

Lance Rubin (25:30):

And won the leaders, yes. But also, the tools weren’t around that we’ve got now. When I started there was Lotus 1-2-3 and there was Excel 95. Excel was just starting. And as we say, Power Query’s been around for a decade. So I’ve got a number of excuses to give to the leaders of finance. If you haven’t-

Chris Ortega (25:46):

It’s been around [inaudible 00:25:48].

Lance Rubin (25:49):

Yeah, it’s been quite a bit. But some of these other tools, yes, not so much so dynamic arrays hasn’t been around that long. Lambda has been about 18 months, which is the new formulas within Excel that spill formula automatically. So it’s really important that they do get on that journey and join the ride because it is a fresh start. It’s a great new way and a great place to work and it will be. And lots of people are leaving it because leaders are not embracing it.

Chris Ortega (26:17):

Yeah, I love that piece of it, man. I think in summary, what you said is establishing the baselines. Me, when we work with clients, when we come in and work on the same thought, it’s always about, “Where are we at?” I think you got to answer that question is, “Where are we at?” ‘Cause that’s going to inform you where we want to go. And it’s a hard reality. It is having a hard conversation with yourself to say, “Hey, maybe I’m not the technology CFO that I need to be.” Or, “Maybe I’m not the advocate of a training and development of the leader I need to be.”

(26:51):

And I think one of the takeaways that I think every finance professional… Whether you’re a CFO, whether you’re an FP and A, whether you’re an accountant, no matter what profession you are at finance, taking away from you that you got to establish those realistic baselines of where you’re at, “Where am I at now? Where do I want to go?” And then the most important piece of it is what you’re going to implement is, “How do I get there?” That is that fundamental piece.

(27:14):

“I know where I’m at, I know where I need to go, how do I need to get there?” Well, we talked about it. And being able to baseline and have that skill assessment and have the people on the train that are like, “Hey, I’m committed. I know this is something fresh and different. I know it’s going to be a journey. I know at the end of the day I’m going to level up my skillset and value to the organization. And I think you as a leader, bringing that to the organization and bringing that to the people.”

(27:38):

Man, I’m hearing you talk about it. I’m excited for you. I’m like, “Dude, this Liz, is about to do some amazing stuff. He’s about to make a tremendous impact and he is about to be a tremendous leader to help some finance professionals.” So appreciate that, man. Hey, one last question I have and we closing it up. I always ask every finance guest these curious to know this from you is what is your number one hot finance trend and why?

Lance Rubin (28:03):

Data literacy. I think data literacy is so critical. Look, I think data has been important for a while, but I think it’s becoming an even bigger importance because of AI. So firstly, many people don’t actually understand how AI works. I think it’s just like this magic robot or something that does stuff. The reality is AI works because of data. Nothing else, but data.

Chris Ortega (28:35):

Facts.

Lance Rubin (28:35):

It doesn’t work because it’s just software. It works because of data. ChatGPT has got the entire internet in a large language model, and it’s got algorithms and it’s got tokens, and it understands how sentences join together and how relationships work. And it can convert that, and it can process that very quickly. Now if I didn’t know that data is actually at the core of AI, then I’m just going to believe the AI all the time.

(29:04):

If I give the AI rubbish, it’s going to give me roche, just like the lawyer in the US who stood in front of the judge and started quoting all these cases and the judge said, “Hang on, I’ve never heard of these cases. Where did you find them?” And he said, “Oh, I got them from ChatGPT.” He said, “Well, what do you mean they don’t exist?” “Oh, but isn’t just ChatGPT, the internet. And I just Googled. Then I thought it was the same thing as Googling, find these cases.” “No, you numb nut. It’s not.”

Chris Ortega (29:29):

Yikes.

Lance Rubin (29:29):

And that’s a lawyer.

Chris Ortega (29:30):

Lance Rubin (29:31):

And that was all over me. There’s going to be some people that are going to really not get what AI does and misuse it and abuse it like that lawyer. Hopefully in accounting and a finance, we’re a bit more savvy. But I think there’s also a risk here that we are almost too scared. So we’re like, “We don’t want to… No.” I was on a podcast recently for a meetup where we were talking about AI in the future of financial modeling with some other leaders in the financial modeling sector, and I think we had almost 100 people on and we-

Chris Ortega (30:02):

Nice.

Lance Rubin (30:03):

… did a poll and there was literally 10% or less had tried ChatGPT. And this is only going back two months ago when it was the rate. Now it’s gold down a bit, but it then it-

Chris Ortega (30:16):

Yes, [inaudible 00:30:16].

Lance Rubin (30:17):

So it’s hung up. People are too scared in finance to even try these tools ’cause maybe they’re scared about, “Is the data going to go out? What’s going to happen?” So I think there’s that other side of understanding data where there’s security issues and how to use these tools smart thinking about data. So data is at the center of all of this, but understanding data and data literacy is critical. So when I say data literacy, I don’t just throw it out as a word. Data literacy needs understanding the contents and the artifacts on data, understanding the process of data. It’s not just, “Okay, I understand data. It’s a bunch of spreadsheets or it’s tables or it’s a database.” No, it’s not. It’s much more than that.

(30:57):

It’s the data culture, its data visualization, its data processing, its data cleaning, it’s advanced data analytics. And AI and predictive analytics, which you were talking about earlier, it’s all of that. It’s not just one element. Data dictionary. “How many organizations have a data dictionary? Do they actually understand what does a word mean in a system and what does that word mean in another system?” And all they say the same thing. “Or we had a client where they had conversion?” If I tell you what does conversion mean?

Chris Ortega (31:27):

I immediately go to sales and I’m like [inaudible 00:31:29]-

Lance Rubin (31:29):

That’s where everyone goes.

Chris Ortega (31:30):

… an opportunity.

Lance Rubin (31:31):

Absolutely. That’s where everyone goes. What happens if they’re a coffee manufacturer and they’re converting raw beans to processed coffee?

Chris Ortega (31:39):

That’s true.

Lance Rubin (31:39):

What?

Chris Ortega (31:39):

It can be completely different.

Lance Rubin (31:41):

Very different. Thought conversion, but now it’s a conversion in a production process. So you have to understand the context of the data. So you’re bringing it in, “I’m getting this date from the system.” Okay, what is it delivery date? Is it order date? Is it invoice date? Is it payment date? There’s four different dates and it’s just dates. So actually, understanding date, these things are important. If I’m looking-

Chris Ortega (32:03):

So important.

Lance Rubin (32:04):

… at cashflow… “Oh, so the date we invoice is the date we get paid?” No, it’s not. I wish it was, but it’s not the date that they ordered. Hang on. That’s not even the date that anything got sold yet. That’s just the date that there was an order put in once they’ve signed the invoice or they’ve paid or something else. I think that these are the things which are important. Data literacy is such a critical skill and Power Query is a very powerful data tool. And so that’s why I’d say for me, that’s where I’d start because it’s, “Are you data literate? Yes, or no? Do you understand what a data diction is?” A basic conversation that you can have with anyone. “Do you know what an ETL is?” Most people will say that, “Do you know what an API is?” Blank face.

(32:47):

So I think these questions are actually quite easy to work out whether someone’s data literal or not, just by asking those core questions. “What is the governance around data? Is there a data steward? Who’s their data ownership? Is there… What about all the different hierarchies of data, gold, silver, bronze, and all of the elements of data. Where do I fix data? Do I fix data source? Do I fix data in the report?” These are things that are critical in terms of data literacy. So it’s a very big topic, but I think it’s one that’s not invested enough in finance. I think the IT people are very familiar with it, but in finance, we got data illiterate. We think-

Chris Ortega (33:25):

Wow.

Lance Rubin (33:25):

… data’s a spreadsheet. We just think, “Okay, data’s a spreadsheet. It’s just information out of a system. That’s data. That’s it. I know data. I know P and L. I know balance sheet; I know data.” No, you don’t. You don’t understand the full ecosystem of data into it. And that’s the hot trend I’d say. I think anyone who’s wanting to get a role in finance today or in FP and A in particular, ’cause FP and A is very heavy on data, particularly for modeling and forecasting, and budgeting, and analysis, then absolutely need to understand data literacy.

Chris Ortega (33:59):

1000%. Man, I agree with you. And you hit it on the head. We’re so comfortable in our P and Ls, our balance sheets, our GLs and all that stuff that we think we have a command of it, but as you just identified, there’s so much more layers of that onion around data. And the thing about it is it’s not to highlight to say, “Your data literacy is okay, that’s okay.” ‘Cause now you have the opportunity to say, “Hey, I’m data illiterate, but now I know Lance, now I know Model Citizn, now I know these great organizations that can help my entire finance or not just myself. It can help my entire finance organization level up our IQ when it comes around to data literacy.

(34:43):

Yeah, man, highly recommend. That’s an awesome approach and a challenge that I think a lot of people has, and it’s great to have resources like you and Model Citizn and other people to help support that. Hey, man, Lance, I can’t tell you enough, man. First off, man, congratulations. I wish you nothing, but the best, and from our conversation, I’m super pumped for you and the finance team that you’re about to take over. You’re about to make such an impact not only in people’s careers, but I think in this businesses’ organization.

(35:10):

I think you’re going to come in and bring such a fresh perspective, fresh set of tools, fresh set of mindset, fresh set of vision, and you’re going to be a tremendous leader across that organization and with that team. But hey, if other people want to learn more about you, learn more about how they can be data literacy, learn more about Power Query and financial modeling, how you guys use it, where can people follow you? Where can they learn more about Model Citizn? How can people connect with you?

Lance Rubin (35:35):

Chris, great question. Probably the first place I’d say is LinkedIn. We have a LinkedIn group, sorry, I’ve got a LinkedIn page, but also, I’ve got about a hit 22,000 followers.

Chris Ortega (35:45):

Oh, nice.

Lance Rubin (35:47):

All organic. I didn’t pay anyone to go get those followers.

Chris Ortega (35:51):

Dude stop paying for followers. People don’t do that.

Lance Rubin (35:54):

When I see other people with 8,000. Okay, that’s just Simon Sinek. That’s different. Fuck [inaudible 00:35:59].

Chris Ortega (35:58):

I see some people sometimes Lance, with 150,000 people and I’m just like, “What?”

Lance Rubin (36:04):

Yeah, LinkedIn for sure. Our website Model Citizn, it’s M-O-D-E-L-C-I-T-I-Z-N, no, E in citizen .com. I dabble on Twitter or X. I’m there a little bit just watching the world unfold in front of us with all the craziness. But otherwise, I have a Facebook page, but just you can email me lance@modelcitizn.com. But yeah, the key thing is just social media is to stay connected and I’m prolific on LinkedIn, as you’ve seen, I’m posting almost two or three times a week. It just depends on how busy I am. But I will post on Google is anti-innovation and we’ll see how that one goes down.

Chris Ortega (36:45):

Let’s see, it’ll go. I think if you did a poll Lance and say Google or Excel, which one is anti-innovation, that’ll be very prerogative. But yeah, man. Hey, thanks for your time and to everybody listening to all those accounting finance, FP and a CFO professionals, Lance, I’ve been a follower and a fan of yours for over a decade now. I remember conversations going back since we talked, man, highly check out Model Citizns, make sure you connect, follow with Lance.

(37:09):

If you want to increase that data literacy, if you want to get that Power Query knowledge up, if you want to increase your skillset around financial modeling, highly recommend Model Citizns and checking out links and the team. Hey man, thank you so much for being a part of CFO TRENDS, man. I really appreciate the insights. I’ll sitting here taking notes and got some great insights. So Lance, thank you so much for being a part of CFO TRENDS.

Lance Rubin (37:30):

Pleasure, Chris, and thanks for the opportunity to come talk to you [inaudible 00:37:33].

Chris Ortega (37:34):

Awesome. Thank you for listening me. Join us for our next episode where I’ll be talking with Steve Robertson, the CFO at HDMI licensing administrator, as we talk about the first 90 days as a new CFO, A Playbook for Success.

The post What the future holds: Power BI Modeller edition appeared first on Mesh.

Today we are talking with Lauren Bahr, who is the VP of Finance at Occupier as she shares her thoughts on setting up a high performing finance team for startups and why it’s important for finance teams and finance leaders to make sure they self-assess where they are in their startups, scale up and business maturity. Welcome Lauren Bahr.

Lauren Bahr (00:40):

Oh, thank you so much. I feel like we have been cooking this up for months and it’s finally here because I think I met you at a conference maybe two years ago at this point, and then we’ve just been LinkedIn friends ever since, and so obviously love watching everything that you’re doing as well. And so I’m so excited to be here, finally.

Chris Ortega (01:02):

Thank you so much again to all the listeners. We’ve been cooking this up so this meal’s about to be… Get ready, this is about to be a great meal served up to you and I’m super excited. So yeah, the topic today is setting up a high performing finance team for startups. My background has always been in startup, scale up enterprise level companies and I’ve always come in as the first finance person in the organization, build, shape, scale, exit, right? I’ve done that so many different times in my career in leading high growth businesses.

(01:31):

So whether that’s software technology and other high growth companies. And I think right now we’re coming into this different recipe of what it means to set up that high performance team. We got technology changes, we got talent changes, we got value proposition changes, so there’s a lot of different change that finance leaders and finance teams are going through in terms of how you build that high performance inside your team. Lauren, my first question to you is what are some of those key factors through your experience that you’ve seen in building high performance teams inside of startup organizations?

Lauren Bahr (02:08):

Yeah, first part is a little bit of self-reflection and looking at the business and what the business needs from you. So what are the operational demands? Okay, what is your team going to spend the most of its time on supporting the business? And then another question is, okay, what hit you get wrong? There may be just two or three things that you absolutely can’t get wrong. What are those? You’re going to want to make sure that you have people, processes in place to support that short list of items. And that could be different for every business, maybe your medical company and allocations between subsidiaries is important. Okay, not important to me. I don’t have one subsidiary at Occupier, but for other folks, for me, I really need to make sure that I land quote to cash, that I, like everyone else in the world wants to get paid fast.

(03:04):

And so how do we make sure that is streamlined as possible versus maybe, hey, accounts payable, while it’s important to pay your vendors, it’s important to pay on time, it doesn’t have the same rigor for me versus a quote to cash. And so I think the first thing is identifying, okay, what can’t I mess up here? And once you’ve outlined those priorities, you could start to build your team and your tech stack around those initiatives.

Chris Ortega (03:35):

Yeah, I think that’s great. And I think a lot of times, and I’ve had this right, I’ve come into finance organizations and anytime I’ve come in, And I learned this the hard way. I remember the first time I came into a new organization, I just led a software company, we got through a skill in that and I was coming in and I remember coming in the first week, I was in my suit, I was completely different. I was like, I want to make an impact. All these great ideas and things I wanted to do. And I remember the CEO of the business sat down with me and this is in the first week Lauren, and it’s never a good thing when you get a meeting pop up with your direct leader about… And it was like finance alignment. I was in the first week. I was like, what did I do? I’m just doing onboarding. I’m doing the onboarding stuff and get my email set up. What did I do wrong?

Lauren Bahr (04:27):

I’m here.

Chris Ortega (04:30):

I walk into the meeting with him and he says, hey Chris, listen, two things. We know that you have all of this experience and you’re going to bring such great ideas, but one of the first things that you need to do, and I just want to caution you, and I love how he always say that. He always say, I caution you, which is always that yellow light. It is like, you’re not at the red light yet, but your gain is learn the business first, right?

Lauren Bahr (04:53):

Right, yeah.

Chris Ortega (04:55):

And this is exactly what you talked about. Go find those processes, go find those value add things. It’s like what do I not need to mess up? What do I need to make sure that I’m walking into this finance organization to say what is going right? And I always call it even a leading fresh FP&A. It’s baseline assessing, what are the baselines of where we need… What do I need to get, what do I need to make sure deliverables are on time? What is that recipe as a baseline that I need to make sure that me or my team does not mess up? And I think that’s such a great pivotal point to start because once you know those things, and we all know walking into… Whether you’re the first hire or you’re seasoned or maybe you’re VP of finance coming into an organization that’s ready to level up their value in terms of leadership, but it’s also a way of getting those quick wins.

(05:47):

When you’re coming in, you can’t hit the whole runs. First in 30, 90 days, you’re just trying to get advanced and get in the book. And that could be ways to continue to deliver that value is hey, Chris or Lauren came in and we continue to have a high level of business partnership or like you said, the quote to cast process or the invoice to cast or whatever you call it, you making sure that rhythm wasn’t messed up.

Lauren Bahr (06:12):

Yeah, totally. There’s so many things that you can do in the first 90 days for quick wins, but I a hundred percent agree with you. The most important thing to do is learn the business and get out there and talk to as many people as possible because those people are going to be the ones educating you the most about the business.

Chris Ortega (06:32):

Definitely, another question I have going on to that is I think when people talk about high performance, it means a lot of different things. You ask a room of 10 different finance leaders what high performance is, and it’s a lot of different ways. Some take it technology, some take it people, some take it as hey, we get the financial statements done in day three, right?

Lauren Bahr (06:51):

Yeah, that is pretty nice [inaudible 00:06:58]

Chris Ortega (06:57):

My question is… We have some clients that’s halfway through the month and I’m like, what? That doesn’t make sense. So my next question is, if you were to define your viewpoint of high performance in the finance organization, what does that mean? What does that look like? What does that feel to the business?

Lauren Bahr (07:13):

I think there are certain things that you have to do well, there’s the base case. You have to close the books, you have to pay people and you have to pay them right and on time. So those are the level. If you’re going to get a C-grade, those are the things you have to get right.

Chris Ortega (07:32):

Yeah, those are table stakes.

Lauren Bahr (07:33):

Table stakes, exactly. When you start getting B or A-level grades, that’s when you’re actually starting to influence decisions, I think, and being able to actually help departments solving things that maybe they have come to you in conversation saying, yeah, these are the things I’m challenged on right now. These are my roadblocks, and if you’re able to help navigate them through that or talk more about the business as a whole, I think it’s a pretty cool gig we’ve got going on here.

Chris Ortega (08:07):

Oh, it’s awesome. It’s really awesome.

Lauren Bahr (08:10):

What? You are totally able to see everyone in the organization and how everything is intertwined and connected, and so if you can bring that knowledge to everything, sometimes I don’t want to say I’m the glue… We’re the glue that holds everything together, but in a way being able to talk to someone about what they’re doing at the job is an important thing, and so I think that’s what really brings you up to that B, A level.

Chris Ortega (08:37):

Yeah, let’s go a little bit deeper on that. So A-level finance organizations that are driving high performance, what is that? I love how you broke it down, table stakes. See, hey, you get the 2.0 and the GPA, right? I know there’s probably a bunch of schedules out there, but hey, I came from an era, there was a 4.0 system and 2.0 was the C, right? And 3.0 was the B, right? When you think of A, which is those top performing finance team that you’ve led, that you built, and that’s the key point. I think there’s a lot of great C and B finance team, the C and B leaders, but I know you, I follow you, you are definitely that a kind of leader and to be that A kind of finance organization. What are those differentiators?

Lauren Bahr (09:22):

I think the differentiators is… Actually, this may sound strange, but for me it’s been allowing me to have time with data and have time to think about the business and analyze. And so instead of focusing on monthly general entries or the operational side of the business, which I definitely have an influence in setting that up and making sure that’s successful. Again, table stakes, but I think for me to have more of an influence at my company, what has allowed me the most opportunity to do that is to have time just with data analyzing trends and saying, hey, this is unique right here. Bringing that to our co-founders or head of sales or head of marketing and things like that. So that’s been the biggest driver for my success.

Chris Ortega (10:18):

I love it, and I would agree a thousand percent. I think one of the biggest differentiators of that A-level is that balance of tactical versus strategic execution, right?

Lauren Bahr (10:28):

Totally.

Chris Ortega (10:28):

And when you think about it, let’s break this down from… And I love the analogy you have from C, B, or A, right? If you’re a C performing finance team, you’re probably 80, 85, 90% tactical versus strategic balance, right?

Lauren Bahr (10:43):

Totally. a hundred percent.

Chris Ortega (10:44):

Yeah, you’re in the weeds. You’re doing the ASC 606 commission entries and you’re reconciling the prepaids and you’re download. You’re in that balance where you’re probably eight 90% tactical and 10% strategic, which ultimately creates where you’re very reactive to the business, right?

Lauren Bahr (11:03):

Totally, totally.

Chris Ortega (11:03):

When you get to that B, you maybe 60/40, but you’re like, hey, we got a little bit of automation. We got closed pretty much down. Or maybe we have an accounting leader that’s really in a tactical execution and we’re like 60/40 between strategic versus 60% tactical, 40% strategic. That A level, you’re like the inverse of the C, you’re like 80 to 90% strategic and 10% to 20% tactical. I love how you mentioned that point because getting that time to do, that’s really a differentiators. I think there’s a lot of people that are listening to this that says, Chris, I may be a C player and I want to be an A player. And I think the number one thing that you can do to catapult you to that A level is getting that time back, re-shifting the deck to say, where am I spending my time, energy, and effort, and where are my resources and where my team are, and how can we bring in whether it’s technology or bring in resources or bring in knowledge, bring in alignment to help us rebalance that tactical versus strategic balance.

Lauren Bahr (12:05):

Yeah, a hundred percent. I think you have to add advocate for yourself and your value as a finance org, and that’s the value is the time and being able to analyze and just… Things don’t happen overnight. If you don’t have time to analyze the data until it’s 11 o’clock at night, that analysis probably is not going to be the best. If you do it on Monday and Tuesday and feel a little bit better, then it’s probably going to be a better result. And so I highly recommend, especially for startups, even though it may feel, because this is how all finance people are, it may feel like, hey, I’m a CPA, I can do these journal entries. It does not take me that much time. It’s not that hard. It’s not a merit of the fact that you can or can’t do it. It’s a merit of you should not be focusing on that. That is below your pay grade. You need to focus on more strategic initiatives.

Chris Ortega (13:00):

I love that, Lauren, and that’s great. Yeah, just because you can do it doesn’t mean it’s the right effective use of your time.

Lauren Bahr (13:07):

Totally.

Chris Ortega (13:08):

And I think this segues to the next question that we talked about, right? We talked about what makes a C, what makes a B, what makes A, high performing finance organization is startups? My next question is what do you think are some of those challenges that FP&A, finance, accounting, CFO leaders that are trying to build high performance teams, what are some of the challenges that they… Man, Chris, I faced these challenges, that’s why I can’t move from a C to an A. What are some of those challenges that you see in your perspective?

Lauren Bahr (13:37):

Yeah, I don’t know when this ever goes away, but resources and time constraints always. So you have to ruthless prioritize everything. And we touched on this and having the value of an accountant fast. Okay, finding that accountant might be hard because this person needs to be a Swiss army knife because they need to be incredibly comfortable with a wide range of activities. They need to be a self-starter, they need to be able to work with ambiguity because they’re going to be doing things that they have never done before. And they’re probably going to do that all of the time when they work here and they have to know accounting. And so the list goes on and on. Range of people that may be a great fit for that role may be a little bit diminished, but that’s the type of person that you need also to help you be successful.

(14:31):

And I think as you start to grow the maturity of the business and the revenue of the business, then you start to bring in these more specialized folks, tax, FB&A. Before you get there, you have to juggle with, okay, I’m going to do FB&A, I’m going to do tax. But then I think too, you have to self reflect and say, hey, we’re going to run the risk here and going blind into some of these areas because okay, despite Lauren Barr being a CPA-

Chris Ortega (15:05):

And a superstar,

Lauren Bahr (15:07):

And a superstar, tax Is not her jam.

Chris Ortega (15:09):

Me too. I had to take regulations twice.

Lauren Bahr (15:14):

I almost left the exam mid-exam because I was like, there is no way I am passing this, but somehow I was blessed that day. So taxes is not my thing. So I know as soon as I go to a place, I’m going to have to outsource it because I don’t want the risk of that because I’m definitely going to miss something. And also, I would not like to prioritize my time on tax.

Chris Ortega (15:39):

Being a recovery CPA myself, I did that a long time ago when I was in audit. But I love how you broke down those challenges and let’s go into… And I think one first one, you said resources. I would venture to say that finance is no longer just a cost element. I think we have a lot of capabilities to be a revenue value added producing business, but we’re always going to have the resource constraint. Because here’s the thing, when Sales are going great and you’re in a high growth startup and sales are going good, you’re just like, hire more salespeople. I’ve never had the opportunity where the CEO, business owner or founder was like, hire more finance people. That’s never been the case. So I agree on that resource. And then also as we talked about in the previous… The time, right? Finding that good balance between strategic and tactical. I would add a third challenge in there is that expectation setting.

(16:30):

And you talked about this because when you’re at a startup business and you’re the jack of all trades, that’s my jam. I love being the jack of all trades. I love not being a single focused person as just like, hey, I’m only really good at this, the Abilene and the HR, contract reviews. But also you talked about it is like, I know my gap is anything tax related and I can talk about it, but when it gets into the depths of it and how we’re treating… And this is where software companies like Occupier become great, with a ASC 842 right?

Lauren Bahr (17:03):

Exactly.

(17:06):

I don’t know this. If you don’t know lease accounting, I would highly recommend every finance accounting, CFO professional. If you’re dealing with lease accounting issues and you don’t have that expert in house, go check out right now Occupier. Go check them out. That is everything you need to handle everything around lease accounting. But that’s where you compliment. And I think that’s where that expectation gap and that challenge comes, is because you may be at a startup, but you’re the single finance person and the CEO, the business owners, maybe you’re board, maybe the investment people, they expect you to do everything. And you got to say, look, I am not the best… I can’t be the best in everything, but I want to bring more resources. And maybe it’s contract resources, maybe it’s fractional resources to say I need to have that empowerment and that enablement to bring on the skills passes, talents and expertise that I need to help cover the gaps. And I just think a lot of finance, these people don’t step up and say that. They don’t raise their hands, hey, I need help.

(18:07):

These finance people are wearing super hero capes. They’re like, I can do it all.

Chris Ortega (18:12):

Yeah.

Lauren Bahr (18:13):

You can, but maybe you shouldn’t.

Chris Ortega (18:18):

Definitely, I think it is that balance. And in the high performance teams, you move so fast. I think all the different software companies and startup companies I’ve been a part of, when you reach that scale up, it’s a critical point. And that’s where you talked about this other point in maturity, and I want to go into that piece of it. When you continue, when you’re a sea company, you go to startup, you go to… Scale up is always my favorite place, where the momentum is there.

(18:43):

That’s where you start to really see a lot of the foundations that you set in the finance organization really start to accelerate, right? So when you think about how does that financial maturity change as you move from a startup to a scale up and maybe to getting to that enterprise level?

Lauren Bahr (19:00):

I think the financial maturity changes as you start to grow the company. I think processes naturally start to break more. And so you might have to have more people in charge of not breaking those things. And so I don’t know, especially for us, we’re experimenting a lot. And so we have to be nimble with reacting to our sales, our marketing, how our product team works together, and the things that I’m building now, while I would love for them to be the foundation for success, I know that they may not be what carries us through to BDIPO and things like that because of how fast our business is moving. And so the maturity, I think of it as, okay, at what point do you need to get additional things? When you started the startup, you had two or three things. As you grow, you’re going to need four or 5, 6, 7 things. Hey, if you IPO, welcome to controls, you’re going to have to start doing that. And the list gets bigger and bigger. And that’s why you have to have people that support those things.

Chris Ortega (20:16):

Yeah, I love your analogy where you said, as you continue to mature in your finance organization and as your business continues to mature, you’re going to start uncovering, oh, we didn’t do this one. And the thing about it is, I think this is the thing I love about always being in startup scale up, and seeing it, that startup and scale up phase is like, now you have the opportunity, and it gets back to the first point that you mentioned.

(20:42):

You have to go back and self-reflect, right? You have to look back and say, Hey, what got us to a series A level and maybe it’s 80 million of revenue not going to be… That may not even be the same leadership team in the organization. That may not even be the same value proposition inside the finance team to get us to that next level. And you’ve got to come to that harsh reality and say, hey, I know for us to get to that next level, I need to bring on people that have more core competencies and business collaboration or are great communicators or people that have a great data technology insight that they can provide to the business. Because what got us too is I needed people that were curious to scratchy. That’s what got us to this level.

(21:23):

So that recognition and to that self-awareness and self-reflection, as you mentioned, you got to take that point. I think at different phases as I built teams and got us to scale and ultimately to acquisition, I’ve always looked at different transitions and I call them moments in time where it’s, hey, this is the moment of time, it’s season that we’re in. What have we already harvested in this season and what other seeds that we need to plant inside of people or maybe technology, our processes, our value, our performance, what other seeds do we need to be thinking about? That way when we get to this next season, we already have those season. It’s harvest, and it’s going to start giving us the value inside the business. And it’s a great point.

Lauren Bahr (22:04):

Totally, totally. Even when you’re thinking about people, I like how you said the first people are the warriors who can do it all. And even if you can have a player that can give B level support to everything that they need to do, and at a certain point, okay, you’ll say, actually, I need a player in this role or this role based on those priorities. And I think once you hit those certain inflection points, you’ll know. Hopefully you can stop it before something bad happens. You don’t want to crash and burn, but it’s just feeling that out and when that happens.

Chris Ortega (22:45):

Yeah, and I think that’s really an important point because a lot of finance leaders, we get to a certain point and we feel like we can do everything right? And we think our team can do everything. And then you get the CEO or the chief revenue officer and they’re like, hey, you got it to this point. You guys did everything. Why do you need an extra person? Why do you need FP&A? Why do you need data analytics? Why do you need this, right?

(23:05):

And I think it’s always making sure we make that case of, yes, we needed that in this season, but now if we want to continue to provide the value, if we want to continue to make the impact across the business, and we want to continue to be looked at as those strategic finance partners, this is what we need. And coming to the table with that, sales does it, marketing does it, all the other functional elements are like, this is what I need to get to here. I think we need to take the same approach.

Lauren Bahr (23:31):

Oh, a hundred percent.

Chris Ortega (23:32):

Yeah, hey, so one last question I have, and I ask every guest this, and I’m curious to know this from you. What is your number one hot finance trend and why?

Lauren Bahr (23:43):

Gosh, I don’t know if this is a finance trend, but I think just the pure amount of new software vendors there are out there to support finance and accounting is so exciting because they’ve identified, hey, we’re ripe for change and they’re motivated to start businesses to support us. And hey, five years ago, maybe you only had one or two AP vendors. Now you have, I don’t know, 10, 12, 15, so many. Whenever you go to conferences, there’s so many of them there. But I think it’s exciting, not because I want to use all of them, but because people are trying to make the lives of accountants better, and I can stand with that.

Chris Ortega (24:30):

And I think that’s the holy balance. The great balance that we’re seeing right now is like you’re starting to see technology adoption at the tactical level. It ties back to what we talked about. If you’re trying to have those resource constraint and you can’t go invest and hire more people, but you want to find that time that you can get back, which gives you more time to go from C to be more strategic. I can’t tell you how many different vendors there are around or to cash and AP. A Lot of these tactical areas where it bogs a lot of people down. There is countless solutions out there that are leveraging predictive and prescriptive analytics.

(25:07):

They can help compliment your ERP system and just, hey, I can go find a technology partner to help me automate it, give me the resource expertise and the time back to my team. So I definitely agree, that technology landscape is super exciting right now.

Lauren Bahr (25:19):

Yeah, it’s very exciting. Even if you’re grappling with, oh, but I have to do an implementation, sometimes you have to downshift to accelerate, right? And hopefully they’ve got the implementation figured out. And so I think it’s could be worth it a lot.

Chris Ortega (25:34):

Definitely, definitely. Hey, Lauren, thank you so much for taking time out on CFO trends. I’ve deeply enjoyed this conversation. I know we can talk about so many other different things, but if people want to learn more about you, if they want to connect with you more, learn more about Occupier and how your organization can help them standardize and understand or least accounting and standards, what can people learn more about you?

Lauren Bahr (25:55):

So for Occupier, you can go online to occupier.com. We have some amazing lease accounting resources out there. We have a memo, we have amortization schedules. We have a ton of really awesome stuff there. If you want to connect with me, you can follow me on LinkedIn. It’s linkedin.com/lobahr and then I also have a podcast that I’ll release every Friday, gives you little tidbits, five minutes or less on things that are going on in my world, and it’s called the Low Bar Finance Podcast.

Chris Ortega (26:27):

Nice, yeah, and I would highly recommend all those accounting, finance, FP&A, CFO professionals, go connect with Lauren, go follow her on LinkedIn. I have absolutely been behind the scenes of being a complete fan of everything that you’re doing, love everything, and the leadership and just authenticity that you bring to the finance organization at Occupier as well too. Lauren, thank you so much for your time. Thanks for being part of CFO Trends.

Lauren Bahr (26:50):

Thanks for having me so much.

Chris Ortega (26:53):

Awesome.

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Really excited today to be joined by Kristine Lemanski, CFO at Assured Partners Aerospace as she shares her thoughts on the CFO gender gap, how we can get more women CFOs and why it’s important for allyship, confidence and making sure you create an inclusive environment to help women thrive. Kristine has always been a great advocate, a great mentor. We’ve done a lot of work together on the AICPA side and enabling finance FP&A and CFO professionals. Welcome, Kristine Lemanski.

Kristine Lemanski (00:51):

Thank you, Chris. It is such a pleasure to be here. We’ve been looking forward to this conversation for a while, so I’m happy to be here.

Chris Ortega (00:58):

Yeah, I know we’ve been getting this planned and what spurred this episode for all the listeners is I got a chance to sit with you last year, actually, it was this year at the AICPA Engage Conference. It was talking about the allyship, more women in finance, and you led a tremendous panel of finance leaders. I know Jen Rowley, who’s a great friend and mentor of mine, and this idea of, there needs to be more representation. I don’t think necessarily it’s just from a diversity perspective, but also how there needs to be more women involved in the office of the CFO. So my first question I just want to lead off with is, what do you think are some of those challenges that women face in cracking the office of the CFO?

Kristine Lemanski (01:45):

Absolutely, Chris, that’s such a great question because in order to solve the problem, we need to know what the challenges are.

Chris Ortega (01:51):

Right.

Kristine Lemanski (01:51):

While there are a lot of them, and I think it’s not just women in the CFO position, but these challenges are faced by a lot of women in leadership, so I was able to boil them down to a few that I think are really important. Number one is oftentimes, and it’s hard to make sweeping generalizations, but oftentimes, as women are hitting that stride where they might start making CFO, they’re ready to have children. At the same time, they have aging parents that they’re caring for. So many women will step back, and they take a longer time off than their male counterparts, and they step out of the workforce or they’re not raising their hands for those promotions because they have so much going on in their personal life. It’s not that men don’t, it’s just that women have it predominantly. That happens to a lot of women.

(02:39):

Along those same lines, again, if you have children, you get your children out of the house at a certain age and you’re ready to go and you’re ready to focus on your career and menopause hits. Those are very difficult symptoms to deal with sometimes and different symptoms for different women. But it can be a real challenge along those lines that some of those symptoms are visible, so it’s hard to deal with those in the workplace. So I think those are two really major challenges. A third challenge would be, and this is interesting, I was talking to a lot of my colleagues about this, I think women lack confidence. I think as the qualifications are put out there, again, depending on which study you look at, a job announcement will go out there and men will say, “Hey, there’s 10 qualifications. I got three of them. I’m good. I’m going to go ahead and apply.”

Chris Ortega (03:32):

“Let’s go.” Yeah.

Kristine Lemanski (03:32):

Women will say, “Oh, I’m missing that one, I don’t qualify. I’m not going to apply.” That’s one reason for the confidence issues. I think the other reason for the confidence issues is there’s not a lot of women CFOs, and so we wonder why that is and can we do it? We lack the confidence to say, “Oh, I can do that.” There’s not very many of us. There’s not very many women mentor CFOs out there, so it can be a very difficult step to take just from a self-confidence standpoint.

Chris Ortega (04:02):

Yeah. I love the three things that you talked about. I think it’s so important, you talked about when you get into that stage of breaking that glass ceiling and you’re almost there, family, you start to have kids, your parents, and a lot of that family dynamic begin to take on the responsibility of women in that. Then you talked about the menopausal portion of it, which is something I definitely want to explore ’cause I think it’s men… when I sat through your AICPA session, that was by far to me one of the most eye-opening aspects that I just was a blind spot. So I definitely want to talk a little bit more about that.

(04:35):

Then the third one that you mentioned is the lack of confidence, the lack of representation. I think me being a minority growing up in finance, as I grew up in high growth businesses, software companies, the further, Kristine, that I moved up the ladder when I was an individual contributor, then I was a manager, then I was a director, then I was a VP, then I was a fractional CFO, the less that I’ve seen about me. So I can definitely relate to that one. Diving into the first aspect of it, how can men, how can… I think allyship is so important, right? How do you-

Kristine Lemanski (05:13):

Oh, absolutely, Chris.

Chris Ortega (05:13):

… think others, in your first point that you mentioned around how can men and other people be more supportive of making sure that women have that balance, that they want to pursue their careers, but they may have more responsibilities at home or they may take care of their parents? What are some things that people can do in allyship to help support women in that transition that they make?

Kristine Lemanski (05:34):

Again, that’s a great question, Chris, and allyship has become a really important topic in the work world of late. I think one of the most important things that men can do is, one of the things that I admire most about you, ask the question, be interested, want to know. Because again, you can’t make sweeping generalizations. One of them is going to need something different than another woman. But one of the most important keys is flexibility, particularly for women who are caring for aging parents and/or their children because women are pretty flexible and innovative and resilient about getting their job done if they have the flexibility to make that happen.

(06:18):

There’s remote work, there’s flexible work schedules, there’s “Hey, do I really have to get on a plane, or can we handle this over a video conference?” All of those things. When I was thinking about what can be done, I think interest in flexibility. Again, as we said earlier, you can’t solve the problem unless you know what the cause is. Just because someone needs to take time off to go pick up a sick kid from school doesn’t mean she can’t get her job done. It just means she’s going to do it at an odd hour.

Chris Ortega (06:50):

Yeah, I love that. When you talk about flexibility, I think that’s so important, not just for women as they take on the household and their career and they’re juggling all these different things, but just overall professionals, right?

Kristine Lemanski (07:00):

Absolutely.

Chris Ortega (07:01):

I’ve always looked at it, and I think where a lot of people struggle in that flexibility is this idea of, “I have to be able to know what this person is doing.” I’ve had the opportunity to work with a lot of women on my team, and I’ve had a lot of great mentors that are women in the finance profession. Your first point about that self-awareness aspect of it, I’ve always taken the gap of saying, “Seek first to understand, then be understood,” and just naturally-

Kristine Lemanski (07:28):

Absolutely.

Chris Ortega (07:29):

… coming to it. I think a lot of men, you don’t know how to navigate that ’cause you don’t… If I’m being honest, it’s a really fine line where you’re just like you’re trying to balance it. You don’t want to come across that you’re not being supported, but you also want to understand, but you don’t want to feel attacked. I think for those men that want to create that allyship and be an advocate, it’s just coming in and saying, “Hey, how can I support you? It seems that you’ve got this… how can we help support you in what you’re doing and what you need to take care of?” To me, it always boiled down to-

Kristine Lemanski (07:59):

Absolutely.

Chris Ortega (07:59):

… three things. As long as you’re delivering high-quality work, as long as you’re meeting your commitments and you’re being a great partner, I don’t care where you do that in, how you do it. If you do that in Mexico, if you do it at nighttime-

Kristine Lemanski (08:11):

Absolutely.

Chris Ortega (08:11):

… if you do it at daytime, it really doesn’t matter. So I think you have to create that environment of being willing to say, “Hey, I want to be flexible to where you are,” and know that these things may come in strides and different cycles of you may… the kids start back to school. I know summertime is a lot different ’cause the kids may be at home and the schedule may change. Then you get in the fall where it’s like, “Hey, I have a little bit more flexibility now because my kid’s in school all day, their kid, most of the day, but I got to leave at 5:00 ’cause I got to pick them up.” I’ve always looked at my teams and said, “Hey, you go take care of what you need to take care of,” ’cause at the end of the day in finance, we’re not doing open heart surgery, right? We’re not doing something-

Kristine Lemanski (08:52):

Right.

Chris Ortega (08:52):

… critical like that. It’s, “Hey, go take care of what you need to take care of,” as long as you deliver and take care of what you need to do and have that flexibility in your schedule and your time, and as long as you’re still delivering, it shouldn’t matter.

Kristine Lemanski (09:05):

Absolutely. Chris, that reminds me of the story, this has been a good long time ago. I had a client back when I was an auditor and consultant, and I noticed every morning when I went into the client’s office that there was a whole group of that client’s employees sitting in the downstairs coffee shop. About two minutes to 8:00, they would get on the elevator and go upstairs. I thought, “That’s odd. They’re here early. What are they doing here?” I finally asked someone who I would trust give me the answer, and they said, “We’re required to pick a schedule here, and we don’t all have to have the same schedule, but we have to pick a schedule. We have to stick to that. So if we want to come in 15 minutes early and leave 15 minutes early, we aren’t allowed to do that.” Like it or not-

Chris Ortega (09:47):

Wow.

Kristine Lemanski (09:47):

… sometimes your leadership style is shaped by that, okay, that is not the result that you want, right?

Chris Ortega (09:55):

That leader is getting a whole different result than what I would want as a leader. Of course, this was when I was quite young in, but that story left an impression on me because those people would sit down there until two minutes before their schedule and then get on the elevator and come 5:00, don’t be standing in the door. You’ll get run over.

(10:14):

Wow.

Kristine Lemanski (10:14):

Yeah. I have always remembered that particular lesson. In this day and age, women can always do that. There’s too many other things that pull at us.

Chris Ortega (10:30):

Yeah. Yeah, and I think it highlights that flexibility aspect of it.

Kristine Lemanski (10:33):

Yes.

Chris Ortega (10:34):

I remember growing up, and one of the stories I have is when I was in accounting, and this is when I left public accounting, and I had the opportunity to work with a great controller. She was a woman, and I was just leaving public accounting, and I had my CPA. I was like, “I’m ready to jump into corporate accounting at a high-growth software company.” Her name was Melissa. One of the things I always admired about her was her stance around work-life balance.

Kristine Lemanski (11:03):

Yes.

Chris Ortega (11:05):

I remember her talking to me about it, and I was just telling her, I was like, “Yeah, I’ve got to travel.” I was living on the west side of town, the business was actually 30 minutes away. One of the things we had to have a conversation about was, “Hey, I know you want me here at 9:00, but that’s really hard for me. I stay late, I do my work.” It was really convincing her where it was like, “Chris, it’s fine. You’ve got that schedule. I leave at 5:00 ’cause I got to go pick my son up from school.” I think what we’re both highlighting is that model behavior.

Kristine Lemanski (11:35):

Yes.

Chris Ortega (11:35):

I remember earlier on how she was such an advocate for her work-life balance. Even though she’s the controller at this high-growth software company and we’re doing all this fundraising, she always made it a principle for her and the team that I was a part of and just the whole team that was like, “Look, when there’s work, but when there’s personal things, when there’s family things, that trumps that. We can help fill in the gaps. We’re going to help support you, and I want you to know that’s a priority, and I’m living that.” It’s not just one of those talk things, right?

Kristine Lemanski (12:08):

Absolutely.

Chris Ortega (12:09):

It’s she lived that in our team, and I always respected her about that because she never compromised, she’s, “Look, when my son has things or my family has things, I’m going to go do those, and that’s just what it’s going to be. I’m going to make sure things are good. We’re going to make sure we have backup plans. We’re going to make sure that there’s those things, but I’m going to get those things done.” I think what you’re talking about and what I’ve-

Kristine Lemanski (12:31):

Yes.

Chris Ortega (12:31):

… seen with that controller I work with is that model behavior. When you see it in practice and you see it in action, it hits a lot different when it’s just talking about it.

Kristine Lemanski (12:41):

Absolutely. You can talk all you want, but people will pay attention to what you do in all ways.

Chris Ortega (12:47):

Facts. Another point I want to talk about, which I think is hugely important that you mentioned as well is some of those challenges is, that lack of confidence, that lack of ability to be able to look at it, ’cause for me, I’ll tell everybody a story. I remember hiring a tremendous, at the time, she was a junior controller, she was an experienced accounting professional. I remember the hiring process, and I was looking at her skillset, and she was the ultimate candidate for the role. She was great for the role. I remember going back to her and having the salary conversation. I remember asking her, I was like, “Hey, we know at the original conversation, you were looking at this kind of salary,” and the salary that she wanted and that she said, “Yeah, this is what I want. This is what I want to make,” it was $30,000 less than what we were offering for the role. So-

Kristine Lemanski (13:36):

Wow.

Chris Ortega (13:37):

… she came in-

Kristine Lemanski (13:38):

That’s huge.

Chris Ortega (13:38):

In significantly below what we were prepared to offer for the job, significantly.

Kristine Lemanski (13:45):

Yes.

Chris Ortega (13:45):

She’s, “Yep, this is the amount that I want. This will make me happy.” I remember being in this opportunity, Kristine, I was like, “I can’t continue to perpetuate this wage gap with women.” She had the skills, she was our top candidate. I know she’s going to produce a lot of value. I remember going back to our senior leader and HR specifically, and I said, “Hey, this is what she’s asking for, but it’s significantly lower than what we’re offering for the role and her value that I know she’s going to bring in the market. So I want to get her to that baseline expect…” The HR person sits across from it. She’s, “Chris, what are you talking about?” I’m like, “I know financially we can save money by doing this, but right now, for her career and for her value and for the impact that she’s going to have for our business, this isn’t the right thing that we should do.”

Kristine Lemanski (14:38):

Yeah, that’s so important there, Chris. You asked about allyship, but you just described allyship, a perfect description of that.

Chris Ortega (14:46):

Yeah, and I remember going through that conversation with HR and the president of the Americans. They was like, “Chris, what…? It was like counterintuitive. It’s like, “Why is the finance guy saying we should…” I’m like, “It doesn’t matter financially what we need to do. This is the right thing we need to do for her.”

Kristine Lemanski (15:03):

The right thing to do. Absolutely.

Chris Ortega (15:05):

“This is the right ethical thing for making sure that we stand by like we are one.” We had company values that we are one, we always innovate. We never settle. We support each other. I’m like-

Kristine Lemanski (15:17):

100%.

Chris Ortega (15:17):

… “If we’re going to live and breathe these company values, if I’m going to live and breathe that as a leader, we need to make this decision. It’s the right thing to do.” I remember, Kristine-

Kristine Lemanski (15:26):

Correct.

Chris Ortega (15:26):

… coming with her and super excited about it, and I gave her the offer. Before we got to the compensation, I said, “Hey, we weren’t able to get you exactly what you wanted. We were able to get you more.” I remember the look on her face and I said, “Here’s what we’re prepared to offer you. Also, I’ve heard through the conversation that getting your CPA is going to be something important to you. So I went the bat for you to say after we look at performance and how things go, we’re going to be willing to invest in you getting your CPA designation.”

Kristine Lemanski (15:55):

Nice.

Chris Ortega (15:55):

Kristine, the look on her face, she was like, “Chris, I don’t know what to say.”

Kristine Lemanski (16:01):

Wow.

Chris Ortega (16:02):

I was like, “This is our commitment to you and as a leader, this is what’s the value-

Kristine Lemanski (16:08):

Wonderful.

Chris Ortega (16:09):

… you’re going to bring to our team.” That moment for her in her career has spiked. She’s a controller now.

Kristine Lemanski (16:16):

Wow, she’s-

Chris Ortega (16:16):

She’s leading a global business.

Kristine Lemanski (16:17):

Amazing.

Chris Ortega (16:17):

She has blossomed, right?

Kristine Lemanski (16:19):

Absolutely.

Chris Ortega (16:20):

I share that because talking back to the confidence side, we have the ability to be able to instill that confidence. I think women traditionally are not the best negotiators. A lot of times like men, we come into the conversation and we’re like, “What’s the best price?” We’re more willing to negotiate, right? I think that-

Kristine Lemanski (16:37):

Right.

Chris Ortega (16:38):

… side comes to we got to be able to make the right decisions that’s best for the person, not best always for the business, right?

Kristine Lemanski (16:46):

Right. Absolutely.

Chris Ortega (16:47):

We got to make sure we’re making that. So-

Kristine Lemanski (16:49):

I think it’s so important.

Chris Ortega (16:50):

… thinking about the confidence and lack of confidence in that, what would be some advice? I know I just shared a story about that to the listeners can go do, but what are some other practical strategies or tactics that others can do to help instill that confidence and moving up in the finance organization?

Kristine Lemanski (17:06):

Absolutely. I think there’s a lot of things that we can do to instill confidence for ourselves. One of the things that I tell my team is we’ll say, “I don’t know how to do that.” Amend that self-talk, “I don’t know how to do that yet. I am perfectly capable of learning how to do this. I will never find out unless I try it.” I cannot remember this study, so apologies for not knowing the exact study, but there was a study where men and women were put in a room and asked to solve certain puzzles and that sort of things. The initial results of that study would indicate that women aren’t good at solving puzzles. Digging in that actually wasn’t the problem at all, women are very good about it. They’re great at solving puzzles, but the situation was if they thought they couldn’t do it, they wouldn’t even try.

Chris Ortega (18:03):

Oh.

Kristine Lemanski (18:04):

So one of the best things you can do for your self-confidence is try. Failure happens. It’s an excellent teacher. Yes-

Chris Ortega (18:13):

Facts.

Kristine Lemanski (18:14):

… if you try things-

Chris Ortega (18:14):

Facts.

Kristine Lemanski (18:15):

… if you take a risk, you might fall in your face. I promise two things. You will learn from that, either you will pick yourself up or somebody will be there to help you pick up, and you will learn from that and move on. Next time, I promise you’re going to do it right if you’re diligent about learning why you settle. So I do think it’s really important, the best way to build confidence is to reach out of your comfort zone and do something different. Raise your hand and volunteer for the project. No, maybe you know how to do it and you’re just not giving yourself that credit. Maybe you don’t know how to do it, but you will let into the project, I promise. It’s so important to take that risk. Put yourself out there. It’s hard. I’m not saying it’s easy, but if you want to build confidence, if you want to grow your career, try new things. There’s nothing like doing something new really well to build your confidence.

Chris Ortega (19:12):

Most definitely, and I love your thought process around failure. I have the same thing. I’ve learned early in my life, and I think a lot of it comes from just amateur boxing when I was fighting.

Kristine Lemanski (19:21):

Oh, yeah.

Chris Ortega (19:23):

I’ve always looked at failure and failure’s never a negative thing, you only fail if you don’t learn.

Kristine Lemanski (19:30):

Absolutely.

Chris Ortega (19:31):

When I look at things, wins and losses, there is no actual losing in failure.

Kristine Lemanski (19:35):

Correct.

Chris Ortega (19:35):

There is no.

Kristine Lemanski (19:35):

There is no [inaudible 00:19:36] Yeah.

Chris Ortega (19:36):

You only lose in failure if you don’t learn, right?

Kristine Lemanski (19:39):

Correct.

Chris Ortega (19:39):

When you look at failure, there’s only two options. You’re either going to win or you’re going to learn. You only lose if you don’t learn, right? I look back over my-

Kristine Lemanski (19:46):

Absolutely.

Chris Ortega (19:46):

… career, and some of the biggest learning opportunities and growth moments and comfort zone expansion moments that I’ve had is because I failed on my face. I made that error-

Kristine Lemanski (19:57):

It happens and it happens-

Chris Ortega (19:58):

… but you learn from it. I think that’s great advice to not only the women listeners, but all the listeners, right? Is-

Kristine Lemanski (20:05):

All listeners, try it.

Chris Ortega (20:05):

… developing that mindset to say, “You know what? I’m either going to win or I’m going to learn.” Failure is actually the starting point, right? To me-

Kristine Lemanski (20:14):

Right.

Chris Ortega (20:14):

… I’ve always looked at it, that’s where it starts. That’s where the learning process starts-

Kristine Lemanski (20:16):

That’s where is starts, right.

Chris Ortega (20:16):

… ’cause something happened, and-

Kristine Lemanski (20:20):

Look at all great companies, look at all great leaders, I promise you, they’ve been on the brink of bankruptcy. They’ve done some really dumb things somewhere along the line that they had to pick themselves up. They have failed. No one is at the top of their game without having failed. I promise you-

Chris Ortega (20:39):

Right.

Kristine Lemanski (20:39):

… there’s not an example out there.

Chris Ortega (20:41):

Yeah, and I love that aspect of it because I think failure being the first starting point and the first step in the right direction, but it all talks about what you just mentioned, right? You got to be willing, the first step, so the action guide for all of those listeners to start building your confidence, the step number one in that is you got to have the willingness to try, right?

Kristine Lemanski (21:01):

Absolutely. You have to try it, and you have to try it with your whole heart. Get out there and give it a shot. What’s the worst that can happen? Yeah, it depends on what you’re trying, right? Don’t go try something that’s going to crush your whole career all at once, right? Learn, build up to that, build up to that risk taking. We used to have a saying back in my old audit day, CEM, career-ending moves. Don’t do that.

Chris Ortega (21:28):

Yeah, career-limiting moves. Don’t do those. Those are ones that-

Kristine Lemanski (21:30):

Don’t do those.

Chris Ortega (21:31):

You know what, Kristine, let’s expand on that because I think I’ve actually, and this is another personal leadership thing that I want to share, is I have seen women and other professionals destroy their career because of one thing, and it’s their ego, right?

Kristine Lemanski (21:53):

Absolutely.

Chris Ortega (21:54):

I had a person on my team and it was just like I could just tell, and it was hard because I really invested in this person. I wanted them to succeed. I wanted their opportunities. I wanted so much for them. To see this person just sabotage their career and looking back over it, and I remember that moment, this is maybe five or six years ago, and I’m going through it. This is a person on my team. This is somebody I manage, and I see, I’m like, “Man, the path that you’re going down, the way that you’re going about trying to move your career and force people,” and it was a very confrontational way of career advancement that this young lady was taking. I had a mentor, and this was a difficult time that I was going through. He said to me, he says, “Chris, the thing you can’t control is when a person’s preparing the rope to hang themselves, you can’t stop that, man.”

Kristine Lemanski (22:50):

You can’t.

Chris Ortega (22:50):

Like, “It’s not your job to…” part of me wanted to just have a real conversation with her and say, “Look, the way that you’re going about this right now, I don’t know who’s telling you or what’s driving it or what you think you’re doing, but you’re burning bridges. You’re sabotaging your career right now.” Part of me just wanted to have that not leader to peer, but just a person conversation. I think that’s one thing is there’s ways to go about to navigate and making sure that you’re not making those career limiting moves, ’cause I’ve seen it happen with countless professionals, right?

Kristine Lemanski (23:28):

Yeah.

Chris Ortega (23:28):

Whether it’s ego or whether it’s a sense of, “I deserve this,” or wherever those places are coming from, you severely impact your career. You severely impact your career, you severely impact your network and ability to continue to advance. I think one question I have for you around that calamity, Kristine, you reached the top by… you’re CFO at AssuredPartners Aerospace, right? If you were to go back and look at your career, go way back, what would be those one to three tips that you want to give all of those listeners out there to say, “Hey, these are the three things that got me to where I’m at that I think can help you?”

Kristine Lemanski (24:03):

Absolutely. I’m happy to share it. I’m so glad you asked that question because someone asked me that very recently, and it is, as a division CFO, it is, and plus, I get to work in a really fun field. So it’s a lot of fun. As you look back on your career, and I came to the party a little bit later from wanting to be A CFO. I was accounting all the way. To move and cross that bridge into finance was a little bit different for me. I have a couple pieces of advice. Advice number one, spend your career collecting tools to put in your toolbox.

(24:40):

I tell a lot of people that this job is the culmination of a whole bunch of other jobs and experiences that I gained along the way. I might not have known at the time when I raised my hand and volunteered for a specific project, I might not have known what that was going to give me. Even if I failed at that project, it still gave me skills that I needed. So if you have the opportunity or can take the opportunity to step outside your current role, your current comfort zone, collect tools, put those all in your toolbox.

Chris Ortega (25:15):

Nice.

Kristine Lemanski (25:15):

If you don’t need them right away, you will someday. That’s a really important thing that everybody needs to do.

Chris Ortega (25:21):

I love that.

Kristine Lemanski (25:22):

Find yourself a mentor. We talked about this a little bit earlier. There’s actually not a lot of women in senior finance and accounting leadership positions, but we are here, find one of us. Most women who have made their W up here understand, believe, and wholeheartedly want to give back and get other women here as well. Find yourself a mentor. If they have the time, if they can spare it, most women will say yes to that. I think advice number three is build your relationships across all the aisles. Find yourself some male allies. I found you.

Chris Ortega (26:03):

Facts.

Kristine Lemanski (26:05):

Right?

Chris Ortega (26:05):

Facts. Facts.

Kristine Lemanski (26:05):

I call you, there are times we don’t talk a lot, but when we do talk, you and I have this relationship that we can honestly bounce things off each other. You mentioned Jen Rowley earlier. One of the things that Jen Rowley says is super important to do is find someone who is willing to tell you the unvarnished truth.

Chris Ortega (26:25):

Yes. Facts.

Kristine Lemanski (26:26):

You were willing to do that for me. You will tell me how I am being perceived or how I’m looking at things maybe not in the best way. You’ll do that for me. Find yourself an advocate who will be honest with you, and the flip side of that is you have to be willing to take it. You asked. You have to be willing to understand that person’s talking to you out of love and caring and act on it. You don’t have to agree with it, but don’t immediately push back. People can see things in us that we can’t see in ourselves, positive and negative. Those are all opportunities to learn and grow.

(27:06):

You cannot do that without building relationships. Right, wrong or indifferent, accountants have the reputation of tearing those relationships down. No, accountant and no seem to be inextricably linked. Undo that perception. Find yourself a relationship and several of them. It takes a lot of people to get here. As I was building my way up into this career, I had so many people. I would not be here without the people who supported me then, who support me now and who I can go to and say, “Oh, my gosh, wait, what am I going to do about this?” It’s okay to say that. It’s okay to say, “I need help.” Find those people who will do that for you.

Chris Ortega (27:57):

I got chills as you were sitting there talking. I was writing this down. I’m just like, Man, that is such incredible advice,” right? Building the tools in your toolkit, right?

Kristine Lemanski (28:05):

Right.

Chris Ortega (28:05):

And those tools can be both good learnings and bad learnings, right?

Kristine Lemanski (28:08):

Oh, yeah.

Chris Ortega (28:09):

Tools aren’t always good, right?

Kristine Lemanski (28:10):

They aren’t always good.

Chris Ortega (28:11):

But you’re building. The second point that you mentioned, I can’t understate that enough, mentorship is key. As I’ve gone throughout my career, as I continue to have you as a mentor and as a great partner and as a resource to always bounce ideas off of, and number three, building relationships I think is so important. That’s not just relationships with other women, right?

Kristine Lemanski (28:33):

No.

Chris Ortega (28:33):

That’s across the board.

Kristine Lemanski (28:34):

Across the board, yes.

Chris Ortega (28:36):

Building relationships with people in finance, I build relationships with people in all different kind of disciplines. That to me-

Kristine Lemanski (28:43):

All across the company. Absolutely.

Chris Ortega (28:43):

All across the company-

Kristine Lemanski (28:45):

Across the company, across your peer network, across. Yes.

Chris Ortega (28:50):

One of my great mentors, he’s a great friend of mine and he used to be a CEO that I worked for. He always told me, he was like, “Man, there’s always value that you can take from anybody.” I think mentorship not only goes from high-level people, but I do mentorship. I get advice from people that are younger, right?

Kristine Lemanski (29:07):

Absolutely.

Chris Ortega (29:07):

And that they’re just starting their career, so I-

Kristine Lemanski (29:10):

You have wonderful experiences.

Chris Ortega (29:10):

Yeah, it’s not always about getting mentorship looking up. It’s 360 mentorship, right? Like how can you have-

Kristine Lemanski (29:17):

Yes, across the board.

Chris Ortega (29:18):

… somebody fresh in their career, middle of their career, advanced in their career?

Kristine Lemanski (29:21):

Absolutely.

Chris Ortega (29:22):

I think that is tremendous advice for all the listeners, and it’s not just for women. I think everybody can take those three practical tips that you mentioned and begin fostering just a great career and a great community of people to help support you in your journey.

Kristine Lemanski (29:37):

It really is so important, and it’s also so important to remember that however far you’ve come, it’s your responsibility to give back. It’s your responsibility to get somebody else there and to speak up. My team and I talk about this a lot, and one of my team members was going through a rough time. Growth is always painful. I’m sorry, that’s just how it is.

Chris Ortega (30:01):

Kristine Lemanski (30:01):

It’s a [inaudible 00:30:02]

Chris Ortega (30:01):

It’s tough. It’s not sun shining and roses. Typically, the best kind of growth you’re-

Kristine Lemanski (30:05):

It doesn’t [inaudible 00:30:06]

Chris Ortega (30:06):

The typical growth you’re going to have, it’s going to make you feel uncomfortable. It’s going to feel weird. You’re going to-

Kristine Lemanski (30:11):

Exactly.

Chris Ortega (30:11):

… feel different now. But I think the number one advice that you gave, lean into those moments. That’s where you transform.

Kristine Lemanski (30:18):

Absolutely.

Chris Ortega (30:18):

That’s where you grow the most.

Kristine Lemanski (30:20):

That is where you transform. I’m not going to sit here and pretend that’s an easy thing to do. It’s not.

Chris Ortega (30:24):

Right.

Kristine Lemanski (30:25):

I do think that a lot of times we don’t grow, and we don’t take that next step because we’re terrified of what happens if we do lean into that. It becomes the rewards and the challenges if you do that are so much more than the pain and the whatever else it is. The whole range of emotions that you go through when you’re growing, either by your own choice or somebody else’s choice, it happens. You can’t control all the factors. You could control your reaction. As you look at that, as you go forward, then embrace that. It becomes part of who you are. A lot of people ask me, “Do you regret something? Are there things you regret?” I have to say, my philosophy is I don’t really believe in regrets because what if I could go back and change that? What if that meant I didn’t meet my husband? Or what if that meant I didn’t get that job that allowed me to collect that skill to get this job?

Chris Ortega (31:25):

Right.

Kristine Lemanski (31:25):

Really, it just is so important to pay attention to all of those things, and yes, things happen. Life is hard sometimes, and that’s not just for women, that’s everybody. Things happen to us. Good things, bad things, all of those things contribute to who we are and you’re learning and growing. We graduate and we get married and we have kids and we get divorced. Someone we love passes away and all of those things happen to us. Sometimes they’re great. Getting married is a lot fun. Getting married is also-

Chris Ortega (31:57):

Right.

Kristine Lemanski (31:57):

… an enormous challenge. Marriage is a lot of work. It’s still worth it. A good marriage is worth all that work that goes into it. I tell people, when people tell me, “I want to be promoted,” or, “I want to be CFO,” my first question is, “Why?”

Chris Ortega (32:10):

Ooh.

Kristine Lemanski (32:10):

You need to know why.

Chris Ortega (32:10):

That’s a great question. You got to have your why, like what-

Kristine Lemanski (32:10):

You have to have your why.

Chris Ortega (32:17):

What’s the motivation? I can tell people, just to expand on that, if that motivation is, “Oh, I want more money,” or, “I want the recognition,” or, “I want the respect,” or, “I want the power,” or I want the…” any of that vanity stuff-

Kristine Lemanski (32:29):

No, that’s a don’t.

Chris Ortega (32:31):

… you’ll get it, and you’ll never be fulfilled. Right? You go to-

Kristine Lemanski (32:31):

You will never be fulfilled.

Chris Ortega (32:35):

I love that point because when I made the transition of leaving, I have two decades building high-growth businesses. When I started Fresh FP&A, I had a really great conversation with my sister. My sister sat down with me, she gave me… I have a twin sister. For those listeners that don’t know, I have a twin sister. She’s my mom and my sister. She’s awesome. When I was really at this really crux in the road in my career, ’cause I’m like, “Man,” she says, “Chris,” she gave me one thing that changed the course of my life.

(33:06):

My sister says, “Chris, when are you going to stop chasing praise and start chasing purpose?” She told me that. It still hits me today. I was like, “Wow. I was chasing all around, I was chasing the recognition, I was chasing this and doing that.” She goes, “Chris, when you start chasing purpose over praise, people over profits, impact over income, when you start really aligning yourself towards, that’s where you’re going to have your highest level of work.” So I love your question about you got to find that why-

Kristine Lemanski (33:41):

So important.

Chris Ortega (33:42):

… man, cause that’s going to drive you in everything. That’s going to drive you in everything.

Kristine Lemanski (33:45):

This is a demanding industry. Finance and accounting, these are tough industries. Leadership is hard. I think when-

Chris Ortega (33:53):

Definitely.

Kristine Lemanski (33:53):

… we’re first starting out, we look at the boss and we think, “Oh, I’m going to get there and life is going to be grand.” Then you get here and some days you think, “Whose idea was this?” Right?

Chris Ortega (34:05):

You’re like, “Man, I’ve watched that movie. This is what I thought leadership was like. It’s a lot different.”

Kristine Lemanski (34:10):

It’s really hard positions to be in.

Chris Ortega (34:14):

Definitely.

Kristine Lemanski (34:14):

You have to know why you want to do it. As you said, if your answer is anything other than because, “I want to serve others in this role,” whatever the purpose is, if your answer is title or money or, “Because my friend down the street got a promotion, I should have one too ’cause we went to college together.” No, none of that is going to make you successful in your role. You have to set all of that aside. It’s an ego thing. Sometimes that’s hard in this society in particular.

Chris Ortega (34:43):

For sure, for sure. Hey, Kristine, I love this topic so far. One last question I have for you is, what’s your number one finance trend and why?

Kristine Lemanski (34:54):

Absolutely. At the risk of being cliche, I’m going to have to say generative AI and its impact-

Chris Ortega (34:59):

Ah, that’s 10 for 10.

Kristine Lemanski (34:59):

… on the finance function. Yep. I’m going to have to say it, and I’m going to date myself here. All right? So I am old enough that I remember when computerized accounting systems started coming out. Those were massive game changers. When I was in college, we did a whole set of books on paper before we were allowed to touch the computer. All right? So that’s the kind of technology advancement that has happened in my career. When we saw each other a few weeks ago, you were laughing at me because I’m like, “I tried ChatGPT.” Chris was like [inaudible 00:35:33]

Chris Ortega (35:33):

Yeah, we did it together. We did it together.

Kristine Lemanski (35:35):

Chris taught me how to use ChatGPT.

Chris Ortega (35:37):

I remember sitting right by you, and you were using it, you were like, “Oh, my God, Chris-

Kristine Lemanski (35:40):

This is all too-

Chris Ortega (35:41):

… what did I just uncover?”

Kristine Lemanski (35:43):

I think that generative AI, the advances in RPA, all of them technology is going to be a massive game changer for our industry, because the ticking and tying, you don’t necessarily need a really smart industrialist human brain to do that. The computer can tell you if number A matches number B. The computer can tell you if have all of these things cleared your bank account. All of a sudden you’re going to have this whole group of people with brains and talent and drive and you can bring them up from all of that tedium and get here. So I think that is going to be one of the hottest trends that that’s not already.

Chris Ortega (36:23):

Love it. Love it. Yeah, generative AI, I ask that to a lot of guests, and I think that’s the recurring theme. It has-

Kristine Lemanski (36:29):

It’s out there.

Chris Ortega (36:30):

… tremendous superpowers, and I think people that can go leverage it and get comfortable with it because it’s not a fad, this is not going away.

Kristine Lemanski (36:38):

No, it is here to stay.

Chris Ortega (36:39):

It’s definitely going to be here for the foresee future, but [inaudible 00:36:40]

Kristine Lemanski (36:42):

I can remember who said it, but somebody said the internet was a fad.

Chris Ortega (36:50):

Oh, yeah, yeah, yeah, yeah. Like, “Yeah, yeah, oh, this internet thing? This isn’t going to go away? Give me my Yellow Pages. Give be my internet. I don’t know. I don’t need this stuff.” Yeah, it’s definitely-

Kristine Lemanski (36:55):

Absolutely.

Chris Ortega (36:56):

… not going anywhere. Kristine, I really appreciate your insight. It is always an absolute pleasure to sit down with someone and talk with you, learn from, you’re someone I hold in the highest regard and just respect. I am thankful, appreciative, and humble to be an ally to support you, and all the knowledge and wisdom and insights that you just shared for not only just women that are aspiring to be CFOs or finance leaders or whatever they’re aspiring to be, but just overall professionals. Kristine, if people want to learn more about you, connect with you, connect, learn more, reach out to you, where can they find you? Where could they learn more about you?

Kristine Lemanski (37:30):

Absolutely. They can find me on LinkedIn, so just Google or search me on LinkedIn and send me a note. Send me a connector request. I love to hear from people, and I’d love to hear all about you. That’s the best place to find me.

Chris Ortega (37:42):

Yeah, I would highly recommend to all those listeners, Kristine is an absolute superstar. We must protect Kristine at all costs. Go connect with her, go network with her, tremendous CFO professional. I’m thankful to consider you a great friend, a great colleague, and a great mentor. Kristine, thank you so much for joining CFO TRENDS.

Kristine Lemanski (37:58):

Chris, thank you so much, and back at you. I was definitely blessed the day you walked into my life and every time I get to work with you. Thank you so much for everything, and thank you for this. This was fun.

Chris Ortega (38:10):

Thank you. Thank you so much, Kristine. Thank you.

Kristine Lemanski (38:12):

Have a great day.

The post The CFO Gender Gap: What Will It Take to Close It? appeared first on Mesh.

Today we’re talking with Jack McCullough, who’s the founder of CFO Leadership Council, as he shares his thoughts on the CFO in the age of disruption, how to thrive and why it’s important for CFOs to change their skillset, mindset, technology acumen, and also increase the business collaboration and connection throughout their entire organization. Welcome, Jack McCullough.

Jack McCullough (00:40):

Hey, it’s great to be here. I was really excited when you asked me to join, and so this is going to be a fun conversation, for sure.

Chris Ortega (00:47):

Yeah, man. So the topic that we got today for all the listeners, all those accounting, finance, FP&A and CFO professionals, this is a really great topic. The topic’s going to be, The CFO in the age of disruption, how to thrive. I love that title because for me, when I look at the office of the CFO and just the different phases it’s gone through. You’ve seen the disruption happen in the sales and marketing side, you’ve seen it happen in operations, you’ve seen it happen in other functional areas inside the business, and I think right now is really that disruption for the office of the CFO. It’s that time to leveling up the skillset, leveling up the mindset, leveling up the value that CFOs are bringing to organizations. So really excited about that topic. First kickoff question Jack, that I have for you is, when you think about the future of the CFO’s value, what does that look like? What are the big areas that CFOs need to focus on?

Jack McCullough (01:44):

There’s so many of those, and you’re absolutely correct, we’re living in an age of disruption and it’s intimidating and yet exciting at the same time because in any age of disruption, those who are aggressive and thoughtful and take the initiative are going to flourish. And those who roll up into a fetal ball, not so much. So you’ve got to be bold, fortune to the bold, as a wise person once said. But to answer your question, I was thinking about this and there’s so many wonderful opportunities for CFOs to get better at their job, as intimidating as a few of them are. But the obvious one to me that jumped off the page is the use of artificial intelligence in decision-making because that’s going to make everything better for CFOs.

(02:30):

Obviously, the first one is your forecasting’s going to be more accurate. I’ve spoken to people, they were pretty good at forecasting. They’d get the revenue and they’d be within 5%, and that was good enough. GenAI has changed that 5% off is no longer good enough. They can do a lot better than that, which is a little crazy. But anyway, more accurate forecasting. And with that as well, risk management, which is an underrated part of the CFO role because it’s not glamorous and sexy and people don’t talk about it that much because it’s dull, but it’s still a critical thing. There aren’t a lot of companies where the VPs of sales and marketing are actively thinking about risk management. They’re just grow. Understandably, right? Not knocking them. But yeah, it makes sense. And then of course, a tool in strategic planning. Even the smartest of us cannot do strategic planning without cutting edge technologies anymore.

(03:23):

And then the other thing I thought of, which more bigger companies right now, but eventually it’ll go to medium and small, which is sustainability or ESG, if you prefer. Yeah, a big one. And it’s partly because being regulated by our governments, partly because our stockholders and customers expect to embrace it, and partly it’s just the right thing to do too. You try to be sensitive. And I recently spoke to Aradhana Sarin, she’s the CFO of AstraZeneca, which is a Fortune 40 company. By the way, she’s the first of 17 names I will drop in the next half hour or so.

(04:00):

But she told me their commitment, they measure everything. They know the environmental impact of every transaction they do, and they’re conscious about how much they’re allowed to travel. Like all big companies, they do have private planes, I believe, and nope, not a 100% sure if she told me that, but they need to, look, you cannot live on a plane. You’ve got to be smart at this, including the executive team. They’re living it. And a lot of companies are following that example.

(04:28):

And then the other one, it’s been going slowly, but more so than ever, is the cross-functional role. The idea of the CFO or accountants generally being back office, don’t come out of the room until the lunch break type of thing. It’s no longer the case. The best CFOs understand the overall business. They work with sales and marketing, they work with the CEO. A lot of them visit customers and whatnot. So it’s truly, other than probably the CEO herself or himself, it’s probably the most cross-functional job in the company. And I say that somewhat apologetically to my friends who work in human resources who might differ with me. But those are the big three cross-functional jobs.

Chris Ortega (05:08):

Yeah, man, I love it. And I want to dive deep into the first two that you talked about, man. The data analysis with AI and decision-making and the risk management side. I actually was leading a panel with some CFOs and we were talking about generative AI and we were talking about it from a risk perspective, and it was such a great conversation, Jack, because we were talking about it from who’s auditing the AI? You’re starting to see CFOs now take on in partnership with legal to set that generative AI framework, right?

(05:36):

I’ll give all the listeners an example. I was talking with a good friend of mine, he’s a CFO at a pharma company based out in California, and he was talking about how he was using Bard, which is a generative AI for Google, and he was talking about, “Hey man, one of the great things that we did was we looked at one of our competitors, one of our clients’ MSAs, and we dropped our MSA in there and it was able to find the differences between our MSA versus theirs.” And I was like, “You did what?” He was like, “What?” I was like, “No.” And then I was like, “Don’t ever say that out loud to anybody that you dropped in your own MSA in a generative AI bot to compare it.”

(06:15):

But what that story acknowledges is there’s so many fundamental risk gaps that people just don’t understand because think about it, how do you police generative AI throughout your entire organization, that risk management that you talked about? How do you build a strategy, processes, procedures, how do you know when data and things around that? So it’s creating the CFO to think about risk not only from a technology perspective, but how to leverage those technologies in the right way for the business. So when you talk about that data analysis with AI to increase that decision-making and risk, where do you see a CFOs fitting to help solve that for businesses?

Jack McCullough (06:55):

Yeah, you’re right. And it’s an unbelievable tool, right? Had you heard of AI a year ago, Chris? I mean generative AI, of course you’ve heard of AI.

Chris Ortega (07:02):

I remember talking about AI years ago because I was implementing in tactical operation, but generative AI, it has exploded.

Jack McCullough (07:11):

Yeah, and I’m not sure if you asked me in August of 2022 if I would’ve been able to define it. Actually, a little bit, you don’t know about me. I actually worked for the first ever profitable AI company in history, and I was a little company in Cambridge, Mass called Jensen. We had a reasonably successful IPO, we couldn’t sustain it, but we’re profitable eight years in a row, which no AI companies were profitable back then. But anyway, detour you didn’t want to take.

(07:37):

But you raised the issue. It’s a big thing. Even if CFOs are doing the right thing with data privacy and you want to use the tool, but you don’t want to expose things. Some have told me, geez, “All of a sudden in the last four months, my controller’s analysis has been a lot better.” And they don’t know it, but it’s did they suddenly happen to get better at their job and become, develop greater analytical minds? Did it just happen around the same time that chat GPT hit the mainstream or more likely, their controllers are using chat GPT and how do you feel about that, right?

(08:11):

Even if you trust certain people, ChatGPT is subject to hacks too and you put the data up there to say what’s going to happen to it? That’s one of the great risks. On the other hand, it’s tempting because they’re loving the analytical capabilities that it has. It’s one of those things they’re going to have to figure that sort of thing out. How do we use this without exposing privacy issues? Because that’s like such a big thing. And for some companies, it’s catastrophic. You expose employee data, you expose company data, depending on what data is that you’re exposing, you’re done. If, God forbid, if you’re an accounting firm and you store all your client’s financial statements. God, you get hacked, you’re done as an accounting firm, no one’s going to trust you going forward. Or if you’re a credit card company and 10 million of the credit card numbers are exposed and you don’t fix that problem immediately, you’ve lost a lot of credibility with a lot of people.

(09:12):

And this is when you go to ChatGPT and other tools, you’re almost exposing it intentionally. It’s a lot worse if you proactively take steps to make your data vulnerable. So they have so much to think about. There’s just so many things and it’s new, but it’s moving very quickly. And in fact, I know a fellow, I think you know him, do you know Ashok? I forget his last name.

Chris Ortega (09:33):

Yeah, Ashok, that’s my guy. He does so much. We do so much together on AI and finance. He’s awesome. He’s just awesome.

Jack McCullough (09:39):

Yeah, good guy, smart as a whip, but you probably know he’s trying to publish a book. The problem is when he sends it to Wiley, the publishing company, and by the time they go through their editing, too much of it has changed. It changes every week. So if I take a month to edit it, that’s all out of date, I’m going to look like a fool if I publish this now. Publishing information in [inaudible 00:10:03] 1972 or something that the pace of change that they’re dealing with.

(10:07):

But we’re going to figure it out. And we ask people my age and whatnot, this feels like the beginning of the internet and yeah, it’s that big of an impact. I remember going classes so people could explain what is this mysterious worldwide web that everyone’s talking about? Eventually it’s going to be secondhand and we’re going to do stuff without thinking about it. But right now, not so much.

Chris Ortega (10:30):

Most definitely, man. And I think for me, for all the listeners, it’s crazy to see because I see me and my team, Fresh FP&A, we work with generative AI. We work with it. I use it every day. I use it every day for a lot of context and just quick questions and just baseline level stuff. And it’s crazy to see how generative AI and other elements of the business, like sales and marketing for example, it’s exploded. And when you think about content creators and you think about marketing promotion, you think about all of that content from a marketing, sales perspective in a sales organization, all the different, you got a call script that you’re sending out. You got emails that you’re doing. You got so much of this manual process that you have people doing, that now, generative AI and the host of tools that go along with it. I think people just think generative AI is just Chat 4 and Bard, but there’s a host of all these other Chrome plugins and PDF plugins and this whole element of AI being like a comprehensive suite for productivity.

(11:36):

I just read an example of what Microsoft is doing with their copilot. They’re putting GPT 4 across their Outlook, across Teams, across Power BI, across Excel. And when you think about the scale and all the touch points that Outlook has inside of a business, all the touchpoint that Teams has, all the Power Automate, all these different great technologies, and now you have this copilot to be able to help you in those situations. To me, I get super excited about the value that it’s going to provide, but also look at the other side of it too. There’s a lot of concern. There’s a lot of conservative people that are like, “Man, this is crazy.” I don’t think we’re at the element where we’re going to be terminators and the bots are going to be blowing up the world or anything like that. But I think the way that you-

Jack McCullough (12:21):

Let’s hope.

Chris Ortega (12:22):

Yeah, let’s hope, right? The way that you can just leverage it in practical application, I think it come in waves. First it was like, “Hey, this is super cool.” Now, I think a lot of finance CFOs and finance professionals are saying, “Okay, I know that it’s cool. How can I apply it? What are some use cases that I can use?”

(12:40):

I think that dovetails right to your third point that you talked about, which is that strategic planning, which is to me, that upskill the CFO. Traditionally, the CFO in finance, I come from accounting, finance, FP&A, financial leadership over two decades in building high growth businesses. And I’ve always seen the office of the CFO and the business has seen the office of the CFO as that traditional scorekeeper, right? We keep score. We said we’re going to do 10 widgets, we did eight. But now moving to the strategic planning side with this technology, it now creates a whole nother value prop. Dive in a little bit deeper. When you look at that strategic planning and the tools that CFOs can leverage, where do you see the value that has?

Jack McCullough (13:20):

It’s almost immeasurable because it can, you probably wished it’s still going to be a while before these tools know our own businesses better than we do. That may happen, that may not. But the problem is, so you take your expertise on what products you’re capable of, who your competitors are, but you share that with a thinking tool basically and combine it with its understanding of all markets, global conditions, even things depending upon what your business is. It can think of risks of weather patterns or revolutions, things like that. It knows so much that we can’t possibly know. It’s okay, you’re interested in opening up offices and expanding to Eastern Europe. I know the other stuff from Wikipedia. I could read that for me to apply risks in a thoughtful way to Eastern European countries, for example, and it’s probably not the best example I could come up with.

(14:17):

I am limited in what I can do, but you tell them, these are my concerns. What do you think? And it’s based upon what you’ve told me, these are the markets that seem like a really good fit. Young demographic population, growing, high GDP, these are some that you should avoid. They have a revolution every 10 years, that sort of stuff. So it can take your knowledge of your business and put it in a global context and really make you a powerful strategic thinker.

(14:44):

And plus scenario planning too. I don’t know that we can practically build every single scenario that’s happened in the last few years into our business plans, but it can give you, I know people that they used to run 20 scenarios and it would take forever for them. And this can do it a lot more efficiently if you’re in one of those companies that wants to plan for every reasonable contingency. So you can see, okay, that what happens here, what happens if this happens? It can just give you more analysis.

(15:14):

The challenge though, Chris, is that fundamentally it’s still at this point, it’s still people making the decisions. And if there’s too much data in too much analysis, you probably heard the phrase analysis paralysis or whatnot. It’s a real thing. People really do suffer from that. If you’re looking at 50 scenarios, God, I can get 98% of this coverage from six, do I really need 50?” And some people say, yes, give me 50, give me a 100.” And some people say, “No, give me six. And if it’s outside these six dramatically, I’ll try to figure something out.” But yeah, it’s intimidating, but it’s amazing in a good way too.

Chris Ortega (15:52):

Yeah, I think that’s a great point, Jack, that you talked about. And for some of the listeners, I remember having this question that people would ask me, is AI going to take my job? And my response has always been, I don’t think AI, and I’m talking specifically for CFOs, finance professionals and accountants right now. It’s generative AI is never going to take your job. I think it’s meant to level us up. It’s meant to get us in the higher value activities that we need to provide to a business, which are collaboration, bringing clarity to the business, being a great communicator, being a great storyteller, building great relationships, knowing the business. That’s where we need to be spending our time. Not that low value stuff that you mentioned, but the data aggregation, the data mining, the Excel modeling and things around that, it’s meant to level us up.

(16:39):

But now for those people that, great example, I remember implementing an AI tool, this is five years ago. I was at working at a software company and we were having really bad collection issues. And we were a global company. We were in 27 different countries, and Americas had great collectibility, but across the world, we just so different ranges of collectibility and it was becoming a cashflow problem for us. And I remember working with a technology company based in Germany. They were called Collect AI. And basically what they did is they provided artificial intelligence and machine learning around your collections process. So one of the things that we implemented globally, it was like a AI bot. His name was Herman. He had his own email address and he would, yeah, Herman was his name. That’s what we decided to name. I was like, “Herman, sounds cool.” So we named him that.

Jack McCullough (17:29):

We don’t have any coworkers named that.

Chris Ortega (17:31):

Herman sounded like a great AI name. I was like, “O, that sounds like a great AI name.” But what it did is it helped a cadence, right? Because when you look at a collections process, if you break it down to its roots, okay, you’re five days within, I’ll send this email response, you’re 10 days out, I’ll send this follow up. You’re 30 days out. It’s a more aggressive follow up, maybe with a phone call. It’s a very routine process that you follow through as the account or receivable moves through different buckets.

(17:58):

So once we standardized the process and we had Collect AI kind of initiate a lot of these conversations, customers didn’t even know that they were communicating either via email or a phone call or text or chat with Herman, he was a collections person. He was doing the work. And ultimately what that helped us do, standardize our process. We got more clarity in our collections process, and we actually leveraged this across our entire organization. That use case now, it came down to, because we had dedicated collections, people that were doing the calling, the emailing in different regions, we had dedicated resources. And I remember talking with the CEO during that time, Jack, and he was like, “Chris, we’ve got eight headcount that are tied up in collections. We seen the impact that Collect AI has had on it. Do we really need to keep these people?” And I remember being faced with that decision where it was like, “Oh, man.”

(18:52):

And I remember sitting down with those eight collections people and I said, “What was it about your job that you love the most?” And they’re like, “Man, I love the routine. I love being able to contact customers. I love bringing value to the business, all these different things.” And I was like, “You know what you’d be great at? You’d be great in working on the sales side of the business, where we’re following up with customers, we’re looking at upsell opportunities.”

(19:15):

Ultimately what we were able to do is, we didn’t let any of those people go. We repurposed them. But there was a person on the team that was like, “Chris, I’ve been in collections for 40 years. I don’t want to do anything else. This is the only thing I want to do. I don’t want to do anything else.” And that was a difficult conversation because we got this technology, we’re moving forward. And that role, this is five years ago, that role was like, “Man, unless you want to go find something else, we don’t really have a need for that particular position.” So that was ultimately one, it was a nice conversation. We sunset well, but that’s the practical use case of it, where it could impact you. If you are in these technical tactical roles. That is an element where I think AI can be endangering your skillset.

(20:01):

And that’s what I’m talking about, connecting this all back, that levels people up. It’s supposed to level us up, get us out of that detail. And to me, I think that is really the true value of it. And when you harness it has superpowers for CFOs.

Jack McCullough (20:17):

It’s crazy. And it’s interesting because one of the things CFOs do talk about with AI is the ethical issues.

Chris Ortega (20:24):

Oh, yes. Facts.

Jack McCullough (20:25):

And you mentioned one like your former colleague who only wanted to do collections, and that is an issue. AI can replace a lot of human tasks. On the surface, that sounds great. You can say, “Hey, you can move on to sales. You can move on to more strategic, less routine, less automated things.” There is a reality that there are people who actually like routine automated things. And there’s some people, their aptitude is such as they flourish in that, and they’re not good at moving into different roles. They’re the ones, unfortunately, they’re going to be maybe left behind by this revolution.

(21:00):

Now, you mentioned this guy worked for 40 years. Collections is still a valuable skill. He could probably find employment. You take a person who does have a limited skillset, doesn’t have a high aptitude for adopting new technology, finds it intimidating. Those are not character flaws, right? There are things I’m really good at and other things I’m not and whatnot. But if they’re not good at that sort of thing, it creates an issue for the CFO because like, geez, we have to move forward. But what about these people who’ve worked and have been loyal to the company for decades? Do we just say, “Hey, I have a prettier girlfriend, so I’m going to say goodbye to you.”? Maybe you can delete that.

Chris Ortega (21:35):

Yeah, no, it’s fine. I remember being faced with that decision, and I remember sitting down with a person and we had a real great conversation about it when I said, “Look, this is where we’re going as a finance organization. We want to be lean, we want to be effective. We want to leverage technology. Let’s find that role and that opportunity that best fits what you want to do.” And it was an amenable, it wasn’t anything bad. We helped find a new, I had an extensive network, found him a great role where he stepped into more, not just in a tactical collections role, but he actually stepped up into the leadership of a collection place. And it was actually a great fit. And I remember going through that process and I was like, man, I think a lot of CFOs, a lot of finance leaders, a lot of business leaders are going to be faced with that decision where it’s, man.

(22:20):

But also look at it from a person perspective, from an individual. If you see, generative AI is not going anywhere for the office of the CFO, it’s not going to leave. This isn’t a fad. I remember Jack, and you probably remember this one, right? Remember when big data had its moment, remember big data, remember that was the buzz, and it had its moment? And that this isn’t a big data trend kind of thing. This is not going to go away. So I think when you can continue to find these tools to help compliment you and level you up, to help you move into higher value activities or higher value skillsets or higher value impact that you’re making across the organization, that’s really where you get ahead of the curve. And to those people, to those listeners, my quick step to get that comfort and clarity and confidence around it, you got to play around with it, man. You got to use it.

(23:08):

And a lot of times people use it and they get to that first point is, oh, ChatGPT didn’t get, it’s never going to be a 100% right. You mentioned this earlier, and I highlighted this, people, we are always going to be in that fact pattern before making the decision. I don’t think any CFO, any business leader, any person is going to be like, “Oh, I’ll have generative AI do it, and they’ll do everything.” It’s never going to get to that point. But if it gets us to 90% there and we can use our horsepower, our business collaboration, our connection, our strategic planning, our data analysis, some of the things you talked about, and now we can have that 10% inside of that conversation. That’s the ROI, man.

Jack McCullough (23:49):

Yeah, no, absolutely. And a couple of things with that too is I was in high school in the 1970s and I decided I was going to major in accounting. And a lot of smart people told me it was a mistake because computers would replace accountants within 10 years.

Chris Ortega (24:09):

Wow.

Jack McCullough (24:09):

And they could not have been more wrong. In fact, the rise of information technology and the fact that now everybody has a computer on their desktop, it actually created a need for accountants. It didn’t replace them. There’s a need to move faster, better information, better data quality. I started my career with stone tablets and quill pens and that type of thing. Computers were a little scary to people in my parents’ generation. But the other thing is sometimes, every time with technology that there’s been a change, it’s created more jobs, not fewer. Now, unfortunately, it does eliminate some jobs, it would be great if we got to the point there could only be winners and bigger winners. But unfortunately, there are going to be some winners and losers along the way, and I hate to call them losers.

Chris Ortega (24:57):

Yeah, there’s going to be opportunities in both areas. And one other topic I want to talk about that you mentioned for those CFOs as we upskill, is ESG and sustainability. That’s such a big topic right now. With the global climate, you see a lot of businesses, I was down at SAP Sapphire conference and they rolled out how they’re leveraging what’s called the green books. So they have the regular books, the financial books, and the green books, which is basically the accounting and the transactional and everything around sustainability, ESG. So when you think about ESG and sustainability, how can CFOs position themselves? Because ESG and sustainability, it’s going to fall to the CFO, right? It’s not going to fall to sales or marketing or HR. It’s going to be one of those things that with a lot of companies starting to disclose, “Hey, here’s our carbon footprint, here’s diversity we have in our recruiting. Here’s governance things that we’re doing to help support our communities.” With a lot of public companies tying to that, and I’ve heard rumblings, I’ve heard rumblings in the SEC that they want to pass some more legislation around.

(26:01):

If you’re a public company and you disclose any ESG efforts in your financials, that needs to be audited. If you say you had X amount of carbon impact, you need to go audit that and make sure, and I know big four, all the big four accounting firm listening to this right now, they’re going to be like, yeah, chi-ching, that’s a whole nother [inaudible 00:26:19] for us, but that’s going to fall to the CFO. And for CFOs out there, finance leaders, thinking about ESG and sustainability, what’s your big takeaway that you have in terms of that topic?

Jack McCullough (26:33):

It’s interesting you mentioned the SEC and disclosures because their behavior can have an unproductive result because there’s certain disclosures, you can make a footnote disclosure, you think you’re giving more information than you need to, and hey, we’re proud of our footprint. You’re inviting the SEC, you’re giving them a reason to come in your front door. And once they say, “Hey, we want to audit that for veracity, it was in your financial statements,” you can’t say, “This isn’t really a good time for that sort of thing. Can you come back?”

Chris Ortega (27:05):

Yeah, you can’t say that.

Jack McCullough (27:06):

Once you open up the door to a disclosure, it better be right. They’re not evil people. Their job is to make sure that every disclosure you’re making, financial or otherwise when you’re a public company, is truthful. And it can be a nuisance to CFOs. And sometimes the [inaudible 00:27:22] approach is, we don’t have to disclose this, so I don’t want to invite the SEC in for a party. It does actually inhibit some voluntary disclosures. It is one thing to think of. But you’re right, CFOs will largely be leading the charge. Now, bigger companies actually have, there’s actually a relatively new thing called the chief sustainability officer.

Chris Ortega (27:43):

I haven’t heard of that role. I haven’t heard of that role so much.

Jack McCullough (27:45):

Yeah, only seen a few. Their focus is, as you might imagine, it’s focusing on sustainability. But for one thing, there are very few people with the skillset to credibly do that type of job. So there’s not that many to go around. So only super big companies can actually dedicate a person. And when it becomes a person, that person is going to want a team around them and other resources to do it. So it’s a wonderful investment to those who can make it. But the people I talk to on a daily basis can’t make that type of investment in their company and whatnot. So it is going to fall to the CFO and his or her team to do the right things, find ways to measure it. And it’s a cultural change too. We want people thinking about the environmental impact of everything we do.

(28:35):

For some companies, it’s not much. You take a $200 million SaaS company, their footprint’s not very big at all. But you take any company that builds something, a manufacturing company, distributor, own a fleet of trucks or planes or whatever it might be, or people who travel, they need to change how they think about things for the better. Again, it’s even absent the SEC, and they’re going to enforce things, but stockholders are going to insist upon this. Employees don’t want to come and work for companies that don’t take sustainability seriously, particularly I’m a boomer and it’s not that we don’t care about it, but we had different battles to fight. But you want to attract Gen Z if they’re going to ask you on the interviews, what’s your sustainability path? What are you doing about it? What commitment are you making right now? Because it’s important to them. Unfortunately, they’re going to have to live with the consequences of some actions of generations that came before them.

Chris Ortega (29:32):

And I love that point that you mentioned because ESG and a lot of those efforts are starting to become a great tactic to retain and keep talent, to get talented people. What used to be to get your talented people, “Oh, we have beer in the kitchen and we have snacks, and you can work from home once a week.” That used to be a great way to bring talented people. But now exactly what you just mentioned. They’re like, Hey, what’s your community involvement? What’s your stance around diversity? What’s your governance around the environment? These are questions. And when you stack two companies up, pay, title, bonus, all those other things are the same. And you got company A that is more heavily invested in ESG, they just don’t talk it. They live it. They dedicate budgets, they have commitments around it. They’re involved in the community. They’re on the path to be committed. And you got company B that’s not doing that, that could be a great way to leverage talent.

(30:27):

So I think when CFOs look at that, it’s not holistically just about the dollars and cents around ESG, but there’s also the qualitative factor from an employee perspective. And, “Hey, this can be a great competitive advantage for us that we allow people to have a mental health day, that we allow people to take one day off to go spend time to go work on a not-for-profit or community project. We allow people a stipend to go plant trees or work with Habitat for Humanity. We make these commitments and we provide our employees an opportunity for the time and energy and space and dollars for them to go participate in that.”

(31:05):

So I think to me, exactly what you said, I think CFOs, when we can not only just think about it from a bottom line perspective, but also think about it from a external, how we could differentiate ourselves to employees and other markets and talent, it can be a great competitive advantage for talent, man.

Jack McCullough (31:24):

Yeah, not only, but for customers too. If you look at a company’s website, and if you see they have 12 executives listed, and it’s 12 white men over the age of 50, and yet on a different page, they boast about their commitment to diversity.

Chris Ortega (31:41):

It’s making make sense, making make sense.

Jack McCullough (31:46):

I don’t know. Yeah, if you’re truly committed, and sometimes things work out strangely, but there are companies, it’s still 90% of the executives are white men, and yet 75% of the overall workforce is other than white men. And it’s like, how is that possible if you’re truly making this commitment? And I want to know before I give you my money as a customer investing in you, how are you helping historically underrepresented groups carve a career path within your company? How are you helping women face the challenges of being in a leadership position, but also they may have some more responsibilities at home than the guys do? That’s a reality that sometimes women have to balance that more than men. And I’m not saying that in every case, but on average, I believe it to be true. So what kind of culture are you taking to support them?

(32:39):

Because it’s an interesting thing when you study men and women, when you do a lot of surveys on work, they don’t agree on a whole bunch of things, but the one thing that they both agree on is that women make better leaders than men. And that’s a little interesting, right? That before I read some surveys, I would’ve said, okay, men will probably say that men make better leaders and women will probably be divided on it. And when you ask that question explicitly maybe you get a different result, when people say, “Who is your best boss?” Men are a lot more likely to identify a female is the best boss they’ve had in their career, who is the most impactful mentor? Or even when they described what traits they look for in a boss, a good listener, collaborative, empathetic, they’re describing what are typically associated with female traits. Now, I don’t mean that in offensive way because we’re talking to two men here who are both very empathetic.

Chris Ortega (33:37):

For sure, for sure. And allies, 100% allies. And I think I loved your point around that because it’s all about difference of viewpoints, right? And I’ve always welcomed, to me, the more diversity, the more viewpoints that you could bring in finance organizations or even in business. Another trend I’m starting to see just on the ESG side, you’re starting to see a lot of people that didn’t have that traditional account. I came from big four. I grew up in accounting, grew up in FP&A, grew up in leadership all the way to the top of finance organizations, and built them and scaled them and sold them off and did all that stuff. But I always looked at and said, one of the things you’re starting to see now is people that don’t even have that accounting finance, FP&A background coming into finance and making huge impacts.

(34:21):

I think the major point that you’re mentioning there, man, is welcome and being open to diversity, because I think I read a study and they said that the more diversity, the more difference of opinion and viewpoints that you have in the organization, the more profitable, the more successful your overall organization is going to be. I think that’s a great point. Hey, Jack, one last question I got for you, man. I ask every guest, and I’ve been burning to get this one out, man, what is your number one hot finance trend and why?

Jack McCullough (34:52):

Okay. I would say ChatGPT, and I suppose that’s the true answer, but I’m not going to go because we covered-

Chris Ortega (34:58):

Yeah, it’s like everybody’s said. Yeah.

Jack McCullough (35:00):

Yeah. Everybody has said that. In 2019, I made a prediction that didn’t come true. I said that more people from FP&A backgrounds would eventually become CFOs more so than the controller track. And because I thought at the time that FP&A would be a more valued skillset among CFOs, the job was becoming more strategic and forward-looking. Controller skills are wonderful, but they are a lot focused on compliance, financial reporting, cost containment. They’re not leading the company, they’re reporting what happened after and empowering the leaders.

(35:37):

So I thought that through, and I honestly believed that in 2019, and then Covid came around and the world changed. So my prediction was not true, but I still fundamentally believe within the world of CFOs that I’ve been using, the farm team presently for CFOs, the biggest farm team or farm system is controllers. And a lot of people can become CFOs, engineers, investment bankers, treasurers, but controllers still the farm team. I will say within a few years, FP&A, particularly, those who are highly technical in technology, not financial reporting technical, who embrace GNI and other tools, some I don’t even know exist yet, but whatever those tools are that come out, the people with the FP&A mindset, skillset who embrace technologies to affect change, those are your future CFOs.

Chris Ortega (36:26):

Let’s go. I love that.

Jack McCullough (36:28):

I think that the position will be younger. It used to be a gig, with a million exceptions. Don’t get me wrong, 40 seemed like a good time to get your first CFO role, 42, 43, something like that. And that’s fine. You get 15, 20 years to develop it. But pace of change, understanding of technology, that lends itself to younger people because Gen Z, what an impressive generation. They grew up with, it’s the most technologically advanced generation in history. I used to make fun of my parents because they couldn’t get the clock to stop flashing on the-

Chris Ortega (37:05):

Yeah, I remember that. I remember that.

Jack McCullough (37:08):

Oh, yeah. Right? And I’d laugh at them hysterically, and now I see young people around me are suppressing laughter around me when I ask questions. Was like, “How does he not know that because he is a bright guy?” So you’ve got Gen Z coming extraordinarily intuitive with technology because they grew up around it. They’re going to be running companies at a very young age, running the world at a very young age. By the way, I don’t know what comes after Z. Double A?

Chris Ortega (37:35):

Double A. Yeah, that’s a good one. Does it start back over? Does it go back to Gen A? Like we got through the alphabet? No.

Jack McCullough (37:41):

Someone, but yeah, they’ll be running and Gen A will also be doing, you’ll be seeing Mark Zuckerberg running global companies at 26. That’ll be a lot more common in Gen Z and the next generation.

Chris Ortega (37:52):

Yeah, most definitely, man. I love that prediction, man. And to me, you talked about on the FP&A side, right? And just that transition, and I think it’s one of the biggest takeaways, and I love that point, man, is the disruption at the office of the CFO and everything that we talked about here today. Great opportunities for all those listeners, whether you are aspiring to be a CFO, whether you’re a current CFO, whether you’re in FP&A, whether you’re in accounting, irregardless. I think, Jack, man, thank you so much for sharing all your insights. I was sitting here taking so many notes and I was like, man, this is such a great topic to talk about. I want to dive a little bit more. .

(38:27):

But hey, man, if people want to follow you, learn more about what you’re doing at the CFO Leadership Council. I know you’ve got an event coming up. Where can people follow you? Where can they learn more about your events? How can people support you?

Jack McCullough (38:39):

Yeah, I’m on LinkedIn. You’d think I’d know, but I believe my profile is Jack McCullough, CFO, but if you enter that in the search, it’ll certainly pop up. And yeah, you mentioned the conference and I’m hoping we will run into each other.

Chris Ortega (38:51):

I’ll be there.

Jack McCullough (38:52):

And I was going to ask you, you go to three conferences a week.

Chris Ortega (38:54):

I’m everywhere.

Jack McCullough (38:55):

Every time I see you, [inaudible 00:38:57] difference, but-

Chris Ortega (38:56):

I’m everywhere.

Jack McCullough (38:59):

Yeah. Our conference is October 2nd through 4th in Phoenix, Arizona. It is a new one for us, and we’ve always done the conferences on the east coast, but we wanted to go somewhere, somewhere cooler than Boston, my hometown. So we’re going to Phoenix. We’ve got some great speakers. Who would your audience like particularly, Shannon Nash, she’s the CFO of Wing, which is Google’s drone company. Great CFO, working for the most innovative company in the world. She’s got a fantastic story to tell. We’ve got a lot of other great speakers, but she’s one that I think your audience would particularly like Shannon, because unlike me, she’s young and cool.

Chris Ortega (39:35):

Yeah, I highly recommend, man. I follow you, Jack, and I click the notification bill on your profile, so anytime something comes up, it’s like first in my feed. I highly recommend all the listeners, make sure to follow Jack, supporting, if you haven’t already, go book your tickets at the CFO Leadership Council in Phoenix. Highly recommend to be there to network, collaborate, talk about a lot of the great topics that we talked about here today.

(39:58):

Jack, thank you so much for your time, man. I deeply enjoy. I can’t thank you enough man, for taking the time, energy, effort, and insights. Every time I speak with you, whether it’s on an email or a phone call, I’m always so passionate. You light my fire man. Jack, thank you so much, man, for your time at CFO Trends today, brother.

Jack McCullough (40:16):

Oh, hey, thanks for having me. And I’m launching a podcast of my own soon. And you’ll be, once I get an audience worthy of you right now, I have zero subscribers, I’m going to love to have you on my podcast. It’ll be a lot of fun.

Chris Ortega (40:28):

Definitely, Jack. Definitely, Jack.

(40:29):

Thank you so much for your time, Jack. Thank you.

The post CFO Leadership: Guiding CFOs Through the Era of Disruption  appeared first on Mesh.

Hey, what’s up everybody? Today, we’ll be talking with Howard Katzenberg, the founder at Glean AI, as he shares his thoughts on CFO to CEO Guide to Leveling Up, and why it’s important for CFOs to break some of their finance habits to put on some of those CEO future skillsets. Welcome, Howard Katzenberg.

Howard Katzenberg (00:40):

Thanks for having me, Chris. I’m excited to be here.

Chris Ortega (00:42):

Awesome, man. Hey, before we get started, man, you want to tell a little bit about yourself, background? Obviously you made the transition from CFO to CEO. Tell the listeners a little bit about yourself.

Howard Katzenberg (00:54):

So listen, after business school, I basically started working on finance teams. I was one of the first employees hired for a company called OnDeck Capital, one of the original FinTech pioneers. That was in 2008. I stayed there 10 years, really helped build out their finance organization, became CFO in 2012, took them public in the New York Stock Exchange with a public company CFO for many years, and then after my 10th year moved over to a company called better.com, the online mortgage company where I joined after their Series B, and became their CFO. And I was there for a little over a year until I had the idea behind Glean AI, my new company.

(01:35):

And just to give you a sense of what Glean does, at both of my prior companies, we’re using bill.com as our AP tool. And basically, I’d still once a year task my finance teams with doing an audit of our vendor spend and top vendors, looking at our contracts, looking at our invoices, and coming up with questions like, “Hey, do we still need to use this vendor?” or, “For this vendor, the products and services that we’re purchasing, do we need to use it? Let’s look at last year’s bill compared to this year’s bill, what’s changed? Why?” And we would follow up with the department heads, and ask them a bunch of questions about the relationships. And inevitably, we’d find 10% to 15% savings from what we were spending that year. But it was a shitty process. I don’t know if I could curse on this.

Chris Ortega (02:23):

It’s fine, man.

Howard Katzenberg (02:24):

It was a painful process of just manually going through these contracts, going through our invoices, and then following up. And I was like, “Why can’t software do this, and why aren’t we catching these things in the approval process?” which was all very sophisticated that we had set up in bill.com. And the reason was we’re not giving any analytics, we’re not giving any contacts when the bill comes for approval. And oftentimes, the approvers just wait until the end of the month. They log in once. They have seven bills to approve, and they do select all. They don’t even look at the document, and they approve it. And that’s why we’re not catching these things. I started Glean because I really believed in having a much more strategic spend management solution that can leverage all the data flowing through on these invoices, and receipts, provide the contacts, provide much better visibility, and be proactive in identifying all the savings opportunities.

Chris Ortega (03:19):

Man, that’s huge, man. And yeah, in my fractional CFO and advisory service company, we encounter that a lot, and bill.com was always our go-to. So, thanks for sharing that, man. So, really excited for our topic that we’re talking about here today, CFO to CEO Guide to Leveling Up. Obviously, you gave out your extensive accounting finance, and CFO background, but you made that transition to CEO. So, one of my first questions is what was the biggest challenge that you faced making that transition from CFO to CEO, and leading that business?

Howard Katzenberg (03:52):

So, I think first just making the decision decision was difficult, because I’m wired to be a CFO, professional training. I always thought of myself as an entrepreneurial CFO. And so, just getting comfortable though to make the leap was a process for me. And what I did was I did a research on the idea. Unfortunately, I didn’t have experience. I had this problem, so I can visualize a solution, and I stayed up late at night. This is while I was still like a CFO of Better, and work on mock ups that I could take, and put in front of people. I designed a survey that I sent to all my CFO friends to help quantify how big this problem was for them, and what features they wanted solutions. It was even to validate that this was also a big problem. And I felt like I had an unfair advantage. Friends would be willing to pilot a solution. I had friends in the [inaudible 00:04:59] industry that maybe could help distribute the product once we build it. I had plenty of venture capital relationships for my prior jobs.

Chris Ortega (05:07):

Nice.

Howard Katzenberg (05:08):

Fundraising, I thought could be easy. So, for me, just making the decision, I put a lot of work into it, it felt like it was the right opportunity personally for me after putting in that work. So, that was challenge number one. Challenge number two though, I think was I’m learning some of the things that made me a good CFO. [inaudible 00:05:29]

Chris Ortega (05:28):

Oh, I liked it. I liked it.

Howard Katzenberg (05:32):

I was always considered to be very analytical. I knew the sales and marketing numbers probably better than the heads of sales and head of marketings at my private companies because I’d set up amazing dashboards, and be able to double click, and just see trends in advance. So, I was always just numbers driven, and always wanting to have good data. And especially as a startup, CEO, you had to break things. You have to go on intuition. It’s all about speed, and velocity. And I think for the first year, I had to really just be conscious of the fact that, all right, that’s the chairs. I had the CFO chair, and my founder chair, and they constantly battled each other, and I had to let the CEO chair win, let the CEO chair just get beat up a little. Now that we’re more scaled, it’s a better balance for the CFO. The chair is coming back, and thinking more about like, “All right, let’s make more data-driven decisions.” But for the first two years, it was a conscious effort to really challenge my team, and really make sure that we were going fast, iterating, getting customer feedback, and then putting out something else again.

Chris Ortega (06:40):

Man, that’s awesome, dude. I love how you broke it down in those two challenges, man. I faced a similar challenge when I spent over two decades in accounting, finance, FP&A, and financial leadership myself, primarily in high growth businesses, so software, technology, retail, e-commerce. And then, when I started Fresh FP&A, which is my business that provides fractional CFO and advisory services to those high growth companies, every day, Howard, that’s a challenge for me, man. Because I still have my book of business, and my team has the book of business of clients. And mostly, my team are client facing and client serving, so they don’t do any of the CEO or the business level stuff for Fresh FP&A, and it’s always that balance. But your first point of taking the leap, I think throughout my career, and probably you can echo this as well too, is you always got to take those risks, man.

(07:26):

And I always looked at it as, “What’s the worst that can happen?” I take the leap and I learn a tremendous amount about myself. I grow myself. And you still always have that experience, and always that expertise, and that financial acumen that you can fall back on. But definitely taking that leap of faith. But for a lot of finance, we’re so calculated, right? We’re like, “What’s the ROI on this?” And this is where I think it gets into your second challenge, where sometimes you got to be comfortable with the uncomfortable, and you have to lead a lot in building through intuition, which that CFO, we always want it. We’re pragmatic. We want to have data, we want to have accuracy, we want to have provision, we want to be perfect, we want to have all these things, and these traits that were traditionally in the CFO hat are tremendous value that we brought to the business. But when you make that transition as CEO, it’s a whole other level of skillsets that you have to develop. There’s a whole other level of velocity and speed that you talked about. So, when you look at some of those key characteristics, and traits that you had to unlearn, you talked a little bit about being analytical, but what are some of those key skill sets that make you successful as a founder at Glean?

Howard Katzenberg (08:36):

Yeah, so I think first off, just being visionary. As a CFO, you’re often focused on next quarter, maybe next year. If you’re focused on the next three years, it’s usually with respect to a financial model, not so much, “What does this company look like? What does my product suite look like?” I really enjoyed that though about like “All right, how do we think about the roadmap, and what additional problems can we solve with some of the capabilities that we’re building?” Being creative and having that vision is critical. Second, as a CEO, you have to be a salesperson. You have to be able to inspire, right?

Chris Ortega (09:14):

Totally.

Howard Katzenberg (09:15):

Yeah. Initially, you have to be able to recruit your first employees, and to sell them on that vision. You have to sell them on that financial upside, right? Same with investors, you have to sell them on the opportunity. Yeah, I still talk to a lot of customers and potential partners, so I have to sell them on value and the ROI that they’ll see in Glean. And having a CFO background actually I think works to my advantage. Because no one meets me, and is all, “Oh, he’s such a salesperson.” I come across as genuine. The fact that I was A CFO, people, they like that, and I think it just makes me more trustworthy, and helps me as someone in a sales role. So, I think being able to embrace that is certainly critical in a CEO position.

(10:01):

I would say a third thing is adaptability. So, I probably underestimated this a bit because when you’re a CFO, it’s a pretty cross-functional role. You have exposure to all different parts of the organization. You see how everything fits together. At the same time, you’re not necessarily rolling up your sleeves, and coming up with product strategy or helping the marketing team up with new cases. But as a CEO, especially for an early stage business, I’m doing that. I’m creating the product strategy. I’m helping the product team come up with product requirements. We’re doing the prioritization. I’m developing marketing campaigns and helping them refine the list that we’re purchasing, working with the engineering team.

(10:48):

I’m a programmer myself. I’m able to talk the language with them, and help them assess the talent that they’re bringing on board, strategy, finance. The finance partners come see to me, but you got to be go deep in all these areas, and not just have surface level understanding. So, I think I used the word adaptability, but ability to go deep is important. Likability.

Chris Ortega (11:14):

Ooh, nice.

Howard Katzenberg (11:14):

You have to recruit a team, manage a team. So, hiring, motivation, leadership, I think you can those skills as CFO if you’re scaling a finance award. But they’re very transferable. They’re very important as A CEO, if not more important if you’re leading the organization. So, just having that ability to engender trust and be likable for your team, I think that’s something I’ve done.

(11:37):

And I think I always talk about, this is probably true of founders, founder CEOs. I think as you scale on your career, more late stage CEOs, it may not be as important, but resiliency. As a startup founder, you get beat up a lot. You got to be able to take punches. You hear the word no consistently from people you want to recruit, investors you want to bring on board, partners and customers that you really want to close. And then, ultimately, something happens, and they say no. And whatever happens … and it might suck, but you got to put on a good face, and go back to your team, and just move on. Shake it off, like Taylor Swift says, and just move on to the next opportunity. But in the moment, it sucks, but you got to be resilient, and get back up, and show your strength.

Chris Ortega (12:26):

Man, that’s awesome, man. I love visionary, salesperson, adaptability, motivational, likable, and resiliency, right? I love how you mentioned all those, Howard. And not one time did you mention to say, “Hey, you got to know ASC 606,” or, “You got to be a subject matter expert in IFRS 15.” These are all things, and this to me is … just sharing back to my experience, and I think we’re similar. And it’s so great to sit across from another CFO, and be like, “My superpower, when I was helping grow high growth organizations and basically build them up from seed to startup all the way to acquisition was I always … ” and this is me giving all the listeners, and you … I’m just a salesperson that loves finance, man. I’ve always masked myself that way.

(13:10):

When you’re dealing with a high growth SaaS business, sales and marketing were always my primary business partners. I loved working with them, and I love the mastery aspect of how they deal with the objections, and how they’re thinking through solutions, and how they’re influencing a buyer’s behavior, and how they’re navigating all these different milestones and things that get along the way in business. And I always flock to that. And now when I put on my CEO hat, in building Fresh FP&A, I come naturally with that sales perspective. I think a superpower for any finance person right now as a takeaway, go meet with that VP of Sales. Go meet with that VP of Marketing. Go learn the business. Go learn outside the debits and credits, and go learn what drives the business. Go learn the people on the front lines that are selling the solutions, or building the relationships with investors, or things around that.

(14:03):

It’s out of that list. But that’s also when you think of traditionally finance, we are the … Let’s go to the laundry list. We’re introverted. We’re analytical. We don’t know how to talk to people. We live in Rx sales. To me, that transition of developing that sales mindset, you got to learn it by … The only way that I can tell … Yeah, you can go look at a LinkedIn book. You can go to a sales conference. But the best way to learn and develop those skills is you got to go out, and do it. It gets back to your first point. Take the leap of sitting with that salesperson, and sitting on deal cycles.

(14:38):

I remember I was sitting on sales forecasting calls, and they’d be like, “Why’s the finance leader in here?” And I’m just like, “Hey, I just want to listen, understand, ask questions.” And it is so much value to that. And I think that’s such a great skillset. And a lot of finance people, and a lot of fractional CFOs, a lot of people that I meet in business, they don’t do a great job of selling themselves. And it’s not like selling yourself in a bad way. But if I sit across from people, and I’m like, “If I’m not passionate about what you’re talking about, if I’m not passionate about your business, or the project that you want to partner with me on, if you’re not passionate about it, why would anybody else not be? Why would they be passionate about it?”

Howard Katzenberg (15:18):

Exactly, yeah. I get asked a lot by accountants, people on the Accounting teams, and FP&A teams how they can be more strategic, and help develop that more interpersonal or salesy type of skillset. And often for the accountants, I suggest … all right, well, accountants, their main function is looking backwards, providing the financial reporting. Once you are done, ask, “So what?”

Chris Ortega (15:45):

Oh.

Howard Katzenberg (15:45):

“I just provided this report. So, what?” Analyze that report, and now sit with the FP&A team, and ask the, “So what?” Question. Sit down, and you can develop the interpersonal stuff with them. Think of as yourselves as maybe not being a cost center of the business, but like a value center. Maybe you can sit with other departments? Every transaction is flowing through Accounting. What other types of reports can you provide to your sales team or your marketing team, or your ops team to enable them to make faster and better decisions? So, that’s one way I encourage them to get out their silo. And for the FP&A teams, I often encourage them, just ask the other departments, “How can we be a better partner to you? Just ask that question, open-ended, and see what they say.” And they’ll list like 30 things, because there’s always more need for analytical support. So, those are two discrete things I often recommend to accountants and FP&A professionals.

Chris Ortega (16:44):

I love it, man, the, “So what?” Question. And to me, I think it gets back to breaking another stereotype in that CFO role that doesn’t really transition over to the CEO, right? A lot of times, finance, we’re so used to commanding the business. “Hey, salesperson, fill out this Excel file to look at our bookings,” or, “Hey, Marketing, give me your updated budget.” We’re so used in our traditions in how we grow up in finance that we command the business. But the more that we can be collaborative partners, I love those two questions as an accountant asking, “So what?” or why does this matter, I think even talking about a sales strategy that I learned that is like a superpower, it’s called WIFM, what’s in it for me?

(17:29):

And I always look at the audience that I’m talking to. We talk with a lot of CEOs, business owners, founders at a lot of different, all across the world, from seed to enterprise level companies. And I always challenge my team to say, “What’s in it for them?” If I’m sitting across from a marketing person, and the more that you can understand WIFM to the audience that you’re talking with, whether that’s HR, and you’re talking with an HR leader, and you’re trying to understand what’s in it for them, and maybe it’s a person that they want to be really good at a project, or they really want to increase their financial acumen, or they’re going through a … they want a great sounding board as an advocate, right?

(18:04):

The deeper that you can understand that, and now bringing that data to support the WIFM in it, that’s a combination that is screen success inside the business is because we are now meeting the business where they are, right? We’re going into that conversation to say, “Hey, it’s not about commanding you in the business. How can we be more collaborative? How can we build that connection?” Because like you mentioned earlier in a topic, I think finance, and I may be a little bit biased, but there’s no functional area inside of a business that is more advantageous to tell the whole story across the business than finance.

Howard Katzenberg (18:42):

Correct.

Chris Ortega (18:43):

Everything stops with us.

Howard Katzenberg (18:45):

And they see everything.

Chris Ortega (18:47):

Yeah, yeah, and I think one of the most important aspects I want to ask to you is you talked about the different skill sets that we need. You talked about the biggest challenges that you can have. What is some other advice that you would give to the listeners, those accountings, those FP&As, those VP of Finance, maybe they’re thinking about starting their own business. One of the things that we’ve seen post-pandemic is this, starting these entrepreneurship journeys. So, if you were to give somebody that … You did it, right? You came from better.com.

Howard Katzenberg (19:18):

Yeah, absolutely.

Chris Ortega (19:18):

You’d be like, “Hey, man, I got this great idea.” What would be some advice or resources that you would give those listeners that maybe want to know that quick start guide to get them on their entrepreneurship journey?

Howard Katzenberg (19:29):

Yeah, so it’s great questions. First off, I would say know yourself. So, I always had CEO envy, not position/title. It would be like, I disagree with that decision, and I want to be the one on the hook if it’s wrong. I want to be the one accountable for some of the strategic decisions being made. And if you, as a CFO or wherever you are in your career, if you’re constantly getting that feeling, it’s probably a good indication, you may want to take that leap to … Maybe it’s not CEO. Maybe the next step is COO, but you may want to get out of just finance, and try something a little bit more broader if you’re getting that urge. So, that’s tip number one.

(20:17):

Tip number two, and you’ve referred to this before, you have to be comfortable with the uncomfortable. A lot of finance people are not. So, you have to really understand your relationship with risk, especially if you’re going to … Again, a later stage CEO may have to deal with a lot less risk than someone just starting out, out of the gate, where they’re not collecting a salary, they don’t know if they’re going to raise capital. So, you have to understand, am I going to panic as soon as something goes wrong? Because everything does go wrong, and nothing goes according to plan.

Chris Ortega (20:51):

Yes, correct.

Howard Katzenberg (20:51):

So, I think a lot of people that get into finance, naturally, they’re very risk adverse. You need to understand your relationship to risk, and how you will react in certain situations, and just know going in, things will not go according to plan. So, that’s my second tip to do that type of introspection. Third is, and this is more of a resource, to get good objective feedback on your business idea, read a book called The Mom Test. I’m blanking on who wrote it.

Chris Ortega (21:24):

What’s that called? The Montes?

Howard Katzenberg (21:24):

The Mom Test.

Chris Ortega (21:25):

The Mom Test, okay.

Howard Katzenberg (21:28):

Yeah. Basically, the whole premise is if I ask my mom, “Mom, what do you think of my business idea?” Because she loves me, she’ll say, “Oh, it’s a great idea,” right? She’s not going to give me the truth. She just wants to be nice. If I ask my friends, they’ll do the same thing. So, you want to ask questions, and this is Product 101 in how product professionals can get really good feedback. You want to ask questions in a way that is not [inaudible 00:21:57]. It really gets to what are theirs problems, what are their pain points? And The Mom Test, it’s a very quick read. It really helps you understand what questions to ask, and how to [inaudible 00:22:09] great information from would-be potential customers. And to me, in late 2019, when I was doing all the research and discovery around Glean, that was a very useful technique I learned to validate the market opportunity.

Chris Ortega (22:26):

That’s awesome, man. I’m going to check that book out, The Mom Test. I know if I ask my mom anything, she’s going to be like … This is just my mom. She calls me Bunny, Howard. So, it’s fine if the listeners know that. Yeah, my mom calls me Bunny, everybody. But she’s like, “Bunny, it’s the best idea ever.” And I’m like, “Mom, I need to … ” I think that’s really great. Know yourself. Truly, deeply know yourself, and be honest with yourself. Knowing yourself is being honest, right? I know for me, yeah, I can do … I’ve done all the tactical stuff, but I know when I started Fresh FP&A, I was like, “I don’t want to be like all the other fractional CFOs that laying with the county services, and then try to upsell fractional CFO.” Our team, we have all the experience we want to do that.

(23:04):

And then I would add as another piece of advice for those people that are thinking about making that leap, a lot of times … And this gets back to another core competency of CFOs and finance people … we want to have precision. We want to be able to have the plan, 99% confident around it. But one thing I’ve learned throughout my career is create MVPs, minimum viable projects, or products, or just create them. Build it, shape it, get feedback, and continue to have this feedback loop of MVP, a minimal viable project that you’re putting out. For me, before I started fresh FP&A, and took the leap full-time to build this business, I was doing CFO finance consulting stuff with friends, and families, and people that needed help along the side before I built that.

(23:51):

Before I got to that leap of faith to say, Hey, I’m ready to go after this. I’m ready to marshal after this full-time. So, don’t let perfection be the eliminator of progress. And I think a lot of times we want to be perfect. We want to have the plan. We want to have the capital. We want to have all these things trace, and agreed, and no gaps in it before we take the leap. But a lot of times, you can build that along the way. And it gets back to one of the most important points that you talked about.

(24:22):

One of the things I’ve learned as being CEO,, man is I have this infatuation with failure. I am obsessed with failure. The reason why I’m obsessed with it is because failure to me is never a loss. I never take an L when I fail. I take an L in learning, right? I’m going to learn from it. And this comes back from my personal life and my professional career, the more that I failed in my life, the more that I’ve learned. And I would actually venture to say my failures are probably the biggest opportunities I’ve had than any of my wins. Because the wins, you’re going to keep doing. You win on a forecast, you’re going to keep doing that. So, man, I love that advice, man. Know yourself, be comfortable with the uncomfortable, and make sure to check out the book, The Mom Test, and build that great network of people that are going to give you constructive feedback.

Howard Katzenberg (25:12):

And I’ll just conclude. If after doing all that, if you can convince a loved one, maybe it is your mother or maybe it’s a wife, or if you can convince someone who’s going to be naturally skeptical, because they don’t want you to make the wrong decision that you’d be crazy not to pursue this opportunity, because you had that unfair advantage, and you’re just destined to do this … If you could convince someone that’s going to be skeptical that you have to do it, you should do it.

Chris Ortega (25:46):

Nice.

Howard Katzenberg (25:47):

And they know you, so that’s my last part of that piece of advice.

Chris Ortega (25:53):

Nice, nice, winning over the skeptics. Hey, man, Howard, I really enjoyed this conversation. My last question I ask every guest, what is your number one hot finance trend and why?

Howard Katzenberg (26:05):

Yeah, this might be a bad answer, because I’m sure everyone’s saying it, but AI.

Chris Ortega (26:10):

The founder of Glean AI, I was expecting … Howard, if you didn’t say, “AI,” I was going to be like, “Man, what are we doing?”

Howard Katzenberg (26:17):

Gleaning insights on your vendor spend using tools. But the power of AI is incredible, not just on looking at invoices, and doing what we do, but you think about just writing technical accounting memos on policies, and stuff. I’m pretty sure I can just ask ChatGPT to come up with an accounting policy for me, and it’s going to get 90% of the way there. And maybe I need to do the rest of the 10% at the edges, but it’s going to cut down on a lot of time, and maybe even some headcount that you need on the team. Or if I can feed into some prior MDNA analysis, and some quarterly financials that I did, and put in this quarter’s results, have it generate a draft one for me, large language models can do that today. And then, again, it’s the first draft, I’m just going to do the rest. So, I think we’re just beginning to see the power of the large language models right now, and I’m really excited to see all the applications that come from it, including [inaudible 00:27:24].

Chris Ortega (27:24):

100%, man, I agree with you. Generative AI is awesome. And to all those accounting, finance, FP&A CFOs, and finance leaders, I would highly recommend go check out Glean AI. You talked about bills.com, and if you’re trying to get some AI solutions that get down that road, and start to develop some of these skillsets, and mindsets that we talked about today, I would highly recommend go check out Glean AI. Howard, deeply enjoy your insights and perspective, man. Thank you so much for sharing this. And if people want to follow you, or connect with you, learn more about Glean AI or connect with you, what are some resources they can go find and reach out to?

Howard Katzenberg (27:58):

Yeah, just on LinkedIn. I post a lot on LinkedIn. Howard Katzenberg is my handle. On Twitter, I guess it’s not even called Twitter anymore.

Chris Ortega (28:06):

It’s X now, right? Which is weird. This is a whole other conversation, X.

Howard Katzenberg (28:12):

The social media site format known as Twitter. I think my handle is just Katzenberg. And then, just, I think we have blog posts and stuff on Glean. Yeah, LinkedIn is usually the best place to find me.

Chris Ortega (28:24):

Awesome, awesome, man, yeah. Hey Howard, thanks so much for your time, man. Thanks for being part of CFO Trends, brother.

The post CFO to CEO: Making the leap appeared first on Mesh.

Today we are talking with Andrew Jepson, who’s the founder of thefbpteam.com, as he shares his thoughts on the difference between what gets you hired and what gets you promoted in finance, and why it’s important for finance professionals to be better influencers, better connections, and build an impactful relationship with non-finance professionals. Welcome Andrew Jepson.

Andrew Jepson (00:41):

Thanks for having me.

Chris Ortega (00:42):

Hey man, I’m really excited to announce our partnership. Fresh FP&A and the FBP team is partnering together to help empower, equip and enable finance professionals to be better communicators, to build better connections, and have better impact across the organization. And what better way to have this conversation? I think finance business partnership, and you’ll dive deep into this, has such a different viewpoint across the world, and I think it’s very different. I’m really excited to kick off this conversation. My first question for you, Jeps, is what is finance business partnership?

Andrew Jepson (01:15):

Finance business partner, it means different things to different people in the world, and there’s a lot of definitions out there. I nutted down to something pretty simple. It’s just finance people working effectively with non-finance. So it’s taking all of those technical skills that we develop as finance professionals and being able to translate that into a language and a communication style that works for non-finance because they don’t understand what the hell we’re talking about most of the time.

(01:43):

So we’ve got to be able to break it down in a way that works for them and also work effectively with them. A lot of finance people start off with this sort of combative and brash style, which works in finance, but when you’re working with non-finance and you want them to bring you into their world, a different style is required. We always say it’s not what you do that makes a difference, it’s the way you do it. So you want to be very focused on that. If people don’t want to work with you, forget about it, you’ll be left outside, and that doesn’t work. So finance business partnering is as simple as that. You’re working with non-finance and you’ve got to be able to do it effectively.

Chris Ortega (02:21):

Yeah. And I think that’s so important nowadays with the evolution that is happening in the office of the CFO and finance organizations. The baseline of what business and our business partners had expected out of finance before has significantly changed. And to me, I think that communication aspect of it is really important. But one of the great things I know about the FBP is you guys have an entire framework that you walk people because I think the biggest gap that people have and maybe some of the listeners, whether you’re in accounting, finance, FP&A or financial leadership, a lot of it is okay, Chris, this all sounds good, but what is the roadmap to get there? So can you talk a little bit about what the FBP team does in terms of that modular roadmap to start finance professionals to be this finance business partner of the future?

Andrew Jepson (03:09):

Yeah, sure. We try to address three main problems. So I’ve been working in this space for six or seven years now and I work with teams all the time. And there’s three main things that were here that were brought in to fix through our development programs. The first is this, I don’t have enough time. I don’t know what finance business partnering is. I can’t get a seat at the table and the people outside of finance that don’t want to work with me, how do I fix that? So we address that first. That’s the first main thing. If people don’t want to work with you, you’ve got to find it very hard to influence, persuade, communicate with them, all those sorts of things. So that’s the first thing and that generally comes down to actually understanding the mindset and the approach that you need to be a good finance business partner.

(03:54):

There’s also elements of the internal environment that you work with. So you might have systems problems, process problems, capability issues, all those sorts of things. You might have a culture that doesn’t lend itself toward it. You’ve got to get all that sorted, call it like a foundation for you to then [inaudible 00:04:13] off. So we have three parts to what we do. That’s our build parts. So we get all that right very quickly and we do that through a couple of workshops that help do that. So that’s build. You get the foundations right so that you’re able to actually do finance business partnering.

(04:29):

The second problem that we address is twofold. It is, I don’t have good relationships with the people side of finance and I don’t really understand the business. So you hear this a lot from non-finance people. The finance team just doesn’t understand the business. We address that by a couple of workshops that deal with that. So moving away from this, talking about financial outcomes, which is P&Ls, balance sheets, cash flows, all the stuff that we instinctively understand and look at all day every day. The business may not necessarily be looking at those things. They’re generally looking at the activities or the drivers that lead to those financial outcomes. And it’s that language that you want to be able to understand and you only get that by spending time with people and going out into the business and trying to understand those activities that lead to those financial outcomes. Once you know that, you then know the language of the business and you understand it and you’re able to be a conduit between things they’re doing and the numbers that they’re seeing in all those 200 page reports that we send them.

Chris Ortega (05:30):

Yeah.

Andrew Jepson (05:31):

And that’s your job. You’re that conduit and you’re able to talk in a language that is the language around the activities and the drivers rather than the language around the outcomes because people just see you and just go, I don’t even know what you’re talking about. That’s one thing.

(05:44):

The other thing is your relationships with people. How do you build strong relationships? Because if you have good relationships, people answer your questions, they give you the information that you want and sometimes the best of times they’ll bring information to you before you’ve even asked. And what that does is it just speeds everything up. There’s nothing worse in finance when you’re asking people questions or sending them emails and they’re not answering and you can’t get the stuff that you need to be able to do the job that you need to do. Poor relationships slows everything down. Good relationship speeds everything up and when you’ve got them, everything’s seamless.

(06:19):

The world where people are bringing you things and getting you involved is what you want. That’s good finance business partnering. A world where they’re closing the door in your face and locking you out, that’s not what you want. And you’ve got to invest some time in that. There’s a bit of time that has to be put into that. If you ask any sales person out there, how much time do you spend in relationship building with your customer? And they’ll say a lot because I want them to trust me and vice versa. And you’ve got to have that internally with your non-finance people. We call that our connect stage. So that’s the second stage. Building good relationships and understanding the organization. So we call that our connect stage. So we’ve got the first stage is the build, the second stage is the connect, and the third stage is being able to have impact.

Chris Ortega (07:03):

Definitely.

Andrew Jepson (07:04):

So, build connect impact is the model. The third stage addresses the problem of I have really poor communication skills. I’m unable to influence and persuade people and I’m not very good at presenting. So we address that. If you’re a good finance business partner, you’re going to be presenting a lot because you’re working on key core business problems and you’ve got to then distill that into either informally crafting a good message and a story or formally you’ll be up in front of people presenting. Now, presenting is a key skill because you’re often doing it with people at your level or people that are higher than you. It’s a bit of a career win if you do it well. But the opposite is also true. If you stuff it up, you can be in trouble. So you need to be good at the communicating your messaging. If you get that, you’ll be influencing and persuading people to go down the path that you want to go down.

(07:58):

And often in finance, it’s a path that people either don’t think about or it’s a hard path. To get the numbers right is a little bit more challenging. So you’ve got to be good at those skills. You’ve got to position things right, make things look like they’re a benefit to people and get them going down the way you want to do. And that all comes down to your style and as I said, the things that you say and the way that you position things. And that comes with, you’ve got to learn the skills and the techniques to do that. So that’s our third stage. That’s when you’ll be having impact. So you got to get the foundations right, you build that up, then you connect with people and you understand your organization and you understand the people in it and build good relationships. Then you’ve got to communicate it to them properly. Now those skills I never learned when I was becoming a finance person.

Chris Ortega (08:44):

Facts.

Andrew Jepson (08:46):

This is where the business came out of is my own experience of learning the technical stuff and learning MPP calcs and discounted cash flows, IFRS. All those things, I learned them and for 10 years I applied them and I loved it. And I worked with finance people for predominantly my first 10 years of my career. When you then flip over and you’re working with non-finance, the skillset is completely different.

Chris Ortega (09:13):

100%.

Andrew Jepson (09:13):

Yeah. It’s a more softer human type skills that work. This combative, I’m in finance, I’m an authority, doesn’t lend itself to good partnership when you’re working with non-finance. And no one teaches you those skills until now. So that idea came out for me about six or seven years ago and ever since then I’ve been teaching the finance people propels their careers. That also has major benefit to the organization is that the finance agenda can get on the table and anyone’s ever worked in an organization, there’s not a situation where you’re not at some stage talking about your numbers. You need a good finance people to help you.

Chris Ortega (09:53):

I love that man. And I love how you broke it down because I think those are the core problems when you look at this mindset shift, that pain of the inability to communicate, right? I’ve seen some great finance professionals and I do a lot of thought leadership. I go across the world and I talk to finance people and I asked them that ability to be able to communicate to even not finance people. I asked them, hey, tell me about your business, which is one of the pains that you solve in understanding the business. And you’d be surprised, Jeps, how many VPs of finance, CFOs, director of FP&A, people that I ask and they’re like, Chris, what do you mean know the business? I do the debits and credits, I do the balance sheet reconciliations. And I’m like, if you can’t even communicate the business to another finance person that could quickly get up to speed, think about the gap that they have for non-finance people, which is not understanding the business and not being able to communicate it.

(10:50):

And then it’s always that pain of the recourse constraint of time where it’s man, I don’t know if I have the time, energy and effort and resources to dedicate it. And I sit there and my challenge to that is when are you going to have the time? Because this is what the business expects out of finance now. They don’t expect us to be calculators and the human calculators that go measure the business, they want us to communicate. And I think those three pain points that you addressed, man, 100% is a gap that a lot of finance people have and it doesn’t vary for a high growth businesses or enterprise level. This is a pain. These are the three common pains and problems and frustrations that non-finance people have with working with finance. Let’s go depth into one because one of the things that you talked about is the art of influencing. And I know that’s one of the modules that you cover in it. How important is it for finance people to have that influencing inside of their business partnership relationships and teams?

Andrew Jepson (11:51):

Critical. So it’s one of the most important things. And the reason why is because so often in finance you’re trying to get people to do things that they don’t or they don’t understand why it’s important. Okay, that’s a really tricky place to be. Think about someone who’s in internal audit or whatever you want, I don’t even know what they’re called these days. The people who go around telling everyone they’re doing everything wrong.

Chris Ortega (12:15):

The numbers spell checkers, the numbers checkers.

Andrew Jepson (12:17):

Those people. Finance business partnering skills can be massively beneficial for people in those roles. Why? Because they are going around the business telling people all the things they’re doing wrong and trying to get them to fix them and do them another way. Now, if you are on the other side of that, when an external auditor comes in and they do their audit and at the end of the audit, they give you that management report of all the recommendations and findings. Think of it this way, most of us in finance go, oh, when am I going to do that? And you just put it in the filing cabinet. And the next time you pull it out a week before the auditors are back the year later. You know how that feels when someone gives you a recommendation or sorts some things and you’re like, you don’t really know what we go through, so I’ll do that when I get to it.

(13:02):

That’s the same for non-finance when finance ask them to do things. So there’s a whole art and skillset around how do you position better so that they can see what’s in it for them? That’s the question that everyone asks themselves when someone asks them to do something is what’s in it for me?

Chris Ortega (13:22):

Facts.

Andrew Jepson (13:23):

What’s in it for me? And if you don’t spend time actually trying to answer that question before you go and talk to them, then they will not see what’s in it for them and accordingly they won’t do it. That’s the one question. That’s the one question that you’ve just got to spend time doing it. Now, there’s some key techniques that you can use to answer that question. And then also when you go and talk to someone, how do you, as I said before, position things so that they’re a little bit more palatable? You just go in like most finance people with the velvet sledgehammer and just smash people across the shops and say, I need you. People go, yeah, that’s the problem. You need it. I don’t need it. Yeah, there’s there’s a whole art in that and it’s massive. If you do it well, as I said before, things move quickly and when things move quickly, that whole issue of I don’t have time tends to go away.

Chris Ortega (14:13):

Yeah. And I love that Jeps. And looking back over my career in leading high growth finance organizations and high growth businesses, this was, I think the art of influencing everything that you talked about was, this was the transitional moment for me when I realized that it was like I can be more than just the Excel warrior and the US gap and the IFRS knowledge. I think when I really learned the art of influencing, it’s when I didn’t care about being the smartest finance person in the room. That’s when I was like, you know what, I don’t care about being the smartest finance person anymore. I care about making an impact across the business and being that finance business partner that people want to work with. Not just the finance person where it’s just, oh, anytime Chris comes around, it’s going to be like the number police. He’s going to knock me across my head because I’m over budget, or he’s going to command me to do something.

(15:08):

That’s a pivotal point, and I see it so many times that a lot of finance people, they don’t know, okay, how do I even develop that skill? And I think the FBP team having a full resource around that to be able to help it is critical because that’s what we do now. We are the internal selling people to get things done across the business.

Andrew Jepson (15:30):

Your job as a finance business partner is to help people and solve business problems. That’s what your job is to do. Once you take that lens, your whole focus on the other person changes because I’m here to help people and solve business problems, which means I’ve got to work closely with people. The other side of it is you also shift yourself away from those 200 page reports and dashboards that we run, that we love and we think are helpful. You actually sit there and go, is that actually helping people and solving business problems? I don’t know. I don’t know. Is it?

(16:03):

But that question you’re now asking is a right question, and funnily enough, you’ll probably sit there and go, I spent an hour a month running this report that no one even looks at. Potentially not do that report anymore. Or I’ll do it differently. I’ll go and talk to someone and see how I can do it quicker and potentially differently. You touched on a point before the numbers release.

Chris Ortega (16:23):

Yeah.

Andrew Jepson (16:24):

One analogy and metaphor that I always give people is I ask them, have you ever been pulled over by the police? You’re sitting in your car and the police pull you over. How do you feel when you’re sitting in the car and the policeman’s coming over? You have this feeling nervous-

Chris Ortega (16:39):

Nervous, anxiety.

Andrew Jepson (16:40):

Nervousness, anxiety. Exactly. Nervousness, anxiety. It’s called fight, flight, freeze. And it’s a normal human response. You feel like you’ve done something wrong, you might be in trouble and you don’t really want to have a conversation with the police guy. You’ll only answer what he asks you because you’re nervous and you’re on edge. Guess what? That’s the exact same feeling that non-finance has when finance comes walking down the hallway to them, that’s exactly how they feel.

Chris Ortega (17:06):

Oh, wow.

Andrew Jepson (17:06):

They feel like they’re going to be interrogated or are going to ask questions. And some people might even just escape to the bathroom or the kitchen just to avoid those questions.

Chris Ortega (17:15):

They close their doors

Andrew Jepson (17:16):

Yeah, and just hide. That’s not what you want. That’s the opposite to what you want. So there’s mechanisms that you can use to fix that, but if you’re turning up and people on the front straight away are feeling anxious and nervous having you around, you’re never going to be good at finance business partnering. You actually need the opposite. You need them excited, or maybe not excited, but you need them wanting to have you there. They want you and they want to bring you in. And the best finance business partners in the world do this very well. The best I ever worked with, he would be sitting in his office, people were lining up at his door to talk to him and get him involved in things.

Chris Ortega (17:54):

Yeah, I think that’s critical, right? And you talk about a key differentiated, right? I think too many people, yeah, finance business partner, finance is in there, but it’s finance helping solve business problems. And I think too many times we get set in our ways, and I’ll tell all the listeners, I’ve been in this. It took me getting outside of finance, it took me really getting with commercial teams. It took me learning and having a lot of failures. Because everything that we’re talking about right now, Jeps, I didn’t learn this on the CPA exam, I didn’t learn this in my MBA class. You learn these things by getting in the business and taking that first step. And I think having a resource, having a full workshop, having resources, having time, having information and your expertise to be able to give these people, I think that’s the critical step.

(18:42):

And one of the other things I want to dive deeper into that I think is a gap as well, is just this commercial acumen, this understanding the business. We get so comfortable in our spreadsheets, in our monthly reporting, we get so comfortable in our PowerPoint presentations that we don’t get that connection and get outside of our comfort zone to go learn the business. So what would you recommend as a first step that if any one of the listeners want to take away to learn about increasing their commercial acumen, what would be your advice?

Andrew Jepson (19:18):

You learn by doing. I give this question all the time. I don’t have the confidence. I don’t have the confidence to whatever it is, present or go and talk to someone or go and spend time with them. And I say, think of something in your life that you are confident at it. How did you get confident at it? And they inevitably say, I did it a lot of times. And the more you do it, the more you get confident. Now, anyone in finance I say to you, the first thing you want to do is back your chair up and get away from your desk and get away from the spreadsheets and go and talk to people and just experience what they do. I used to sit in the car and go out with sales reps for a day and just see what they go through.

(19:57):

And when you think, oh no, God, this is a hard job, this sales rep job, it’s not until you actually go and see it that you think, no wonder they’re not thinking about the finance agenda front of mind. They’ve got their own issues. They’ll go out into the factory or go out onto a building site and just see what goes on. I used to work in construction and one of the project managers took me out once and I was like, his day is just not spent looking at P&Ls and financial information. His day is looking at the activities and the things that end up turning in those financial outcomes. And if you don’t understand those things and how they all weave together and affect each other, then you’ve got no hope. And you can’t see it on a spreadsheet. Spreadsheet’s a whole lot of data or a dashboard that makes the data look pretty.

(20:43):

And you’ve got to go out and see the things that are happening that there’s actual physical activities and things that people are doing that create those outcomes. And if you don’t know them, you’ve got no ability to be able to communicate to non-finance properly. First thing, don’t have your head in spreadsheets all the time. Actually go out into the business and see what the things people are doing, the activities, the drivers that are leading to those numbers. That’s the first thing. The more time you spend away from your desk, the better. It should be like the first KPI of finance business partnering, how much time are you spending at your desk? And it’s like the lower the number, the better.

Chris Ortega (21:20):

Nice. I like that.

Andrew Jepson (21:21):

Forces you out.

Chris Ortega (21:22):

I like that, man. And when I look back and that’s practical advice. Everything that you’re talking about, it echoes so well with me. And I think it’s so important for finance people to know these are transition moments that you have in your career, right?

Andrew Jepson (21:36):

Yeah.

Chris Ortega (21:37):

I love the build, connect and impact. I think that’s the stages of finance. When you are early in-

Andrew Jepson (21:44):

Chris Ortega (21:45):

Yeah, when you’re early in your career, you’re building a lot of the things that, you’re trying to build a lot of, you’re building the financial models, you’re building-

Andrew Jepson (21:52):

Chris Ortega (21:55):

Yeah, and I think that’s the thing I love about this framework is it models you of how you progress in your career. Because you may build things and then you start connecting the dots at that middle phase. And then when you get later on and VP of finance and CFO or fractional CFO, you’re like, I’m all about impact. And I love how it module and provides that resources to be able to do that. Because when I look at it, right, some of the best conversations and best opportunities I’ve ever learned is for those people I just go sat in a meeting with people. I’m just like, hey, sales is having a sales forecasting call and they’re talking about pipeline. I’m just going to go join it. I’m just going to go join it.

(22:33):

And I love your first question you talked about. When I first started doing this in my career, people were like, what is finance? What is Chris doing here? Are we in trouble? Is like a police thing, they were like, oh my god, what is Chris doing here? Are we in trouble? And I would always come in the conversation and say, hey, I’m just joining this call because I want to learn how I can better serve you in the finance role. And as soon as I said that, Jeps, it completely de-neutralized the conversation. Now people were like, oh, Chris is just here so he can better understand us and he can better serve us and better support us. And it was like that’s how I left it. So to me, I think that’s one of your first things is getting outside. And depending upon if you’re hybrid, fully back to work, you can jump on a call and just say, I just want to sit, listen, observe, and see how I can better be a better servant to you and helping understand the business.

Andrew Jepson (23:25):

Deliberating question to ask your business partners is what are you working on at the moment? What’s keeping you up at night? What’s a problem in your world that if we could sort it out and solve it for you, would that help? And they’ll tell you some stuff and it’ll be operational. It won’t have anything to do with numbers. And your job, you’ll be sitting there going, that’s how that turns up in the figures.

Chris Ortega (23:50):

Yeah.

Andrew Jepson (23:51):

That is a liberating question. Once you start focusing on the other person’s issues and problems and solving them, you totally change things.

Chris Ortega (24:00):

Yeah, you said to that relationship. The thing I love about this program too is it’s all intertwined. And again, all these are things that when you look at the balanced spectrum of finance professionals. These are all qualitative things. I’ve never took an exam that said, hey, we’re going to measure your influencing skills or we’re going to measure how effective you are in your mindset shift to being a great finance business partner. So I think for me, these gaps are evident and I think it’s not, tell me a little bit about this. This isn’t a program where you got to sit and it is like benefits in eight to nine months. If you talk about the time to value of some of these core things that you talk about, what realistically can people expect to see value and impact that they make with taking some of these workshops?

Andrew Jepson (24:46):

Yeah, the value is almost instant. I was very lucky. COVID was very good to me. So what COVID did with my business is I’m a trainer and a facilitator. I’m essentially a finance guy, moved into education. I used to have a business that was 90% here in Sydney. For the listeners, you will pick up my strong thick Australian accent. So 90% of my time was face-to-face training people. Now, when you do that, especially when you’ve got a team that’s in different locations, what do you do? You fly your team in. We sit in a room for two days, inevitably a month later, you’ve forgotten 90% of what I’ve told you, and you probably only remember two or three things. What COVID did was instantly overnight everything went virtual and went online. Now, what that led to is that I can train anyone in the world anywhere, anytime.

(25:33):

The problem that you have is that virtual is a little bit clunky, it’s not as personal, it’s just not as nice and fun. It’s not as experiential. What you got to do is you got to shrink those. I’m not going to sit on a call for two days with Andrew. I’ll be asleep. So you shrink the calls down, you shrink the calls down into small bite-sized bits. Now what that does is allows me to teach the teams and the individuals some stuff, give them some tools and techniques that they then go away with and do stuff on the job. Everyone knows that 70% of your learning is done on the job. Now we’ll give you the tools and techniques to do it. They go off and do it and then guess what? We come back a week or two later or a month later and do another module.

(26:13):

And the first question we ask, what do you remember from last time? How did you apply it? And at the end of every module we also say, between now and the next module, you will confront this situation. This is where you use a tool, try it out, try it out. As I said, COVID and virtual training changed all that. It allowed you to go from that, anyone knows anything about learning, there’s a 70, 20, 10 model where 70% of your learning is done on the job and 10% is that technical training that I provide. We used to only be able to do the 10. Now we can do 10, 20 and 70. That’s great. And the beauty of it is you can walk out of the modules and apply those things straight away because there we call the program Everyday MBA because it’s tools and techniques taken from the everyday taken from other functions that have been picked apart and lifted up and get used for finance.

Chris Ortega (27:04):

That’s absolutely amazing, man. And I think it covers that major point where if you got that objection where you’re like, man, I don’t know if I have the time to do this, it’s taking the time to go out there and do it. And it’s the time to value and being able to get these things because to me, I think this topic is so important because this is where if I’m placing, I was just out in Vegas, and if I’m placing my betts on the value that finance professionals are going to have with non-finance and the impact that we’re going to make across the business, if you say, Chris, if you got 500 bucks and you’re going to place that on the quantitative side, are you going to place that on the qualitative side? The robots are here and you talk about this, the robots are here.

(27:42):

The quantitative stuff is honestly not where I’m going to place my $500 bet if I’m banking my future, if I’m banking my career, if I’m banking the value. If I want to get promoted and be a leader in finance of the future, I’m banking on these qualitative side because that’s not where… ChatGPT, BarGPT-4, all these hosts of generative AI tools, the quantitative things are where they’re going to have a lot more value. And honestly, it’s not where I want to spend my time in the future. I want to spend my time being a great influencer, building great relationships, having strong communication, shifting my mindset, turning in numbers and making it valuable for people and having that ability to, like you said, build, connect, and make an impact. That’s where you should place your bets and that’s where the future of finance as a profession. It’s not about finance being the scorekeepers anymore, it’s about finance people being the future advocates and helping guide the business. And that’s where you should position yourself.

Andrew Jepson (28:45):

You can, but you can be all those things about just providing reports and numbers and all that sort of stuff, but you’re very quickly going to be pigeon holders, potentially not adding any value. You put yourself in risk of redundancy and replaced by robots. So that’s the phrase of the FBP team is once the robots arrive, the only thing left is business partnering. Because the robots can do all that technical stuff that we learn much quicker, much more accurately than any human ever can. Now there’ll be a human element that has to oversee it, but you slowly see that stuff shrink. And the stuff that robots can’t do is the human element of things, the qualitative stuff. And funnily enough, as you go through your career, you don’t think about this stuff too often in your career when it’s early on because you’re just absorbing technical and you’re learning your craft, you’re learning your finance craft.

(29:38):

And that sometimes even works in, just say you’re in big four or consulting or professional services, people ring you up and they want that technical stuff, which is fine. When you’re in an organization and you’re surrounded by non-finance people and you’re trying to work on things that’ll help the organization achieve their strategic goals and tactics and all that sort of stuff, you suddenly need a different skillset. And one of them is being able to work well with people.

(30:03):

And you don’t think of it in your career until you’re 10, 15 years into it and then suddenly the light bulb goes off. You have that moment where you go, geez, that worked really well and it worked really well because I was a little bit more collaborative. It happens to everyone, but no one sees it until it happens. So there’s a blind spot up until you get… And I had it, I had it. I worked with finance people for first 10, 12 years of my career, and then I got a job where I had my finance team, but predominantly I was working with non-finance. And for two or three years I just pissed everyone off and just annoyed everyone. And I couldn’t get things done quickly until I had to go on a reconditioning phase of totally transforming the way I did things. And once I did that, your career takes off.

Chris Ortega (30:48):

Yeah. And I love the way that you broke that down. And it is, it comes in stages. And I think everything that we talked about to is for all of those accounting, finance, FP&A, VPs of finance professionals, if you’re looking to transform that from a skillset to a mindset and you’re looking for a partner and team with proven success of doing that, the FBP team is directly where I think you should go. Hey, Jeps, one last question I have. I ask every guest on CFO Trends, this last one question. What is your number one hot finance trend and why?

Andrew Jepson (31:22):

It’s obviously the FBP team and getting out. That’s just got a trend and go right off the charts.

Chris Ortega (31:24):

I would a hundred percent agree with that.

Andrew Jepson (31:26):

That’s just me being self-indulgent. The real one is, as I said, once the robots arrive, the only thing left will be business partnering. That is live right now. If you rewound 12 months, AI, ChatGPT, Bard, all those things, they weren’t even in existence. And then come November, December 22, bang, they’ve landed and everyone’s just on them going, wow, how cool is this sort of stuff.

(31:50):

So that’s stuff is right in the bullseye at the moment. So that’s a big trend. How do you leverage it and how do you use it without it replacing you? Because I use it just with crafting messages and sometimes I might be writing a message and I’m writing it in the way I like to write and the way I like to do, bang, you just go, bang, write it out the way I like it. You can pop that into ChatGPT and I know the person that I’m talking to might be a certain type of individual, I’ll just ask ChatGPT to make it sound like that and bang, it just reconstructs it and then you just go through and change a couple of things and send it off.

(32:25):

That makes a massive difference when you are communicating, especially finance people who default to email. I would always say go and have a conversation because you lose all that stuff anyway. But we do a lot of stuff over email. And ChatGPT can do that. I use Excel. I’m okay at Excel. If you asked me where I was, probably 50%, if you looked at a population, I’m right in the middle. I know how to do some stuff and there’s some stuff that’s beyond me. I can go to the ChatGPT and tell it what I want it to do and it gives me the formula that I then just copy and paste. Now that is so much quicker than going on Google and YouTube and trying to find it. That can sometimes take you two minutes. It can sometimes take you two hours and you don’t know what you’re listening to.

(33:06):

Whereas ChatGPT, bang, just does it and you’re like, wow, that’s already there. So that sort of stuff is going to speed up your learning and speed up your knowledge around things and just help you do things a lot quicker. And if you can plug it into your system, I don’t even know how that works, [inaudible 00:33:23] on my pay grade, but if you can plug it into your system and see the scope that it’s got there, that is the trend that’s going to be here for the next two or three years. As I always say to you, my favorite joke, Chris, I always say this as a joke, 2028 is a year that Arnie goes back in time in the Terminator movies. [inaudible 00:33:39].

Chris Ortega (33:39):

Oh yeah, that’s right.

Andrew Jepson (33:41):

I used to say that jokingly for the last three or four years. December 22, when that landed, I went, oh, okay, this is going to be here pretty quick. So I was thinking that’s only five years away. Now I’m sitting there thinking, imagine in five years what these things are going to be doing.

Chris Ortega (33:55):

Definitely.

Andrew Jepson (33:57):

So, it’s flipped really quickly.

Chris Ortega (33:58):

Yeah. It has. And I think definitely generative AI and I think for this conversation for all the listeners, how you’re able to leverage that and really place that bet into that qualitative things that we talked about here. That’s where you’re going to have the biggest ROI and the biggest impact that you’re going to be able to have is because I read in a study that ChatGPT, GPT-4 passed the CPA exam. GPT-4 literally took the CPA exam all four parts of it and passed it.

Andrew Jepson (34:27):

Chris Ortega (34:29):

Yeah, yeah. That’s not crazy that artificial intelligence passed the CPA exam.

Andrew Jepson (34:34):

I would expect it to be able to do that. I would expect something like that to be able to do that. What I wouldn’t expect-

Chris Ortega (34:40):

Is to be able to translate that to non-finance people. Yeah.

Andrew Jepson (34:43):

Well is to have a conversation with someone and navigate through the feel of that conversation. That’s wishy-washy stuff, but that’s how we make decisions and that’s how we things in business. I’ve got my own business and I don’t necessarily take financial decision all the time. There’s other contexts, the numbers doesn’t happen. It’s all in my head and it comes out through conversation. So if you aren’t able to play in that space, as a good example, ring up, I don’t know, the telecommunications company and get a chatbot or the chatbot that you’re talking to on the screen. What inevitably happens with a really hard problem or something that has specific context is you just go round and round in circles.

Chris Ortega (35:23):

And do you just say, customer support.

Andrew Jepson (35:26):

Give me some of the talk to, I want to explain it to them. That will always be there. And if you’re good at that, then you become quite powerful and you get the robots to do the other stuff. But it’s a different skillset that no one’s ever really taught and you often take it for granted. But if you actually apply some really easy tools and techniques, you can propel yourself really quickly.

Chris Ortega (35:48):

Awesome. Hey Jeps, thanks so much, man. I appreciate that and I completely agree with that hot trend. I think generative AI, it’s going to be curious to see what the next five years are. Hey, but before we go, if people want to learn more about the FBP team, if they want to learn more about the Everyday MBA, where can people follow you? Where can people learn more about the programs? What’s those links and where can people find more to learn, connect with you and learn more about the Everyday MBA, the FBP team?

Andrew Jepson (36:14):

Yeah, easiest way, I’m on LinkedIn a bit. I post quite regularly, so just connect with me on LinkedIn. You can also visit the website, thefbpteam.com, which has a lot of our stuff on there. Of course, Chris is going to help me build this in North America. Feel free to reach out to Chris. I’m in Australia. Time zones are obviously sometimes very funny, but Chris is going to help me build this in America. America, the way I see it and the businesses I’ve worked with in America, American finance people are actually pretty good at this stuff. They just don’t call it finance business partnering.

(36:48):

That’s what I’ve got to get over is that finance business partnering is a phrase that’s not really used too much in North America. It doesn’t mean you’re not doing it. It doesn’t mean you’re not doing it. Yeah, that’s how you can find me. I’ll have a chat, so give me a call. I can talk you through some stuff. We do some free workshops and bootcamps to get people started. But yeah, I’m a very lucky man. I get to do this all day every day, and if you asked me 20 years ago would I be doing this, I would’ve said you’re mad. But yeah, I love it. I get a lot of energy from working with different people. So yeah, reach out and happy to have a chat anytime.

Chris Ortega (37:22):

Awesome. Yeah, thank you for that and I highly recommend, really excited to partner with you on this. Everybody, if you’re listening, want to learn more, definitely connect with Jeps. He’s got great insights every day. And then also check out www.thefbpteam.com. Jeps, thank you so much for CFO Trends. Thank you so much for your time, brother.

Andrew Jepson (37:40):

Love it how you call me Jeps. I don’t have any problem with you calling me Jeps as opposed to the formal Andrew. I don’t take myself very seriously, but I take what I do very seriously. So I’m happy for you to call me Jeps or whatever you want to call me, but thanks for having me on. Really enjoyed it. And onwards and upwards

Chris Ortega (37:56):

For sure. Thank you so much.

Andrew Jepson (37:57):

Cheers, man.

The post Elevating Finance Business Partnerships: Unlocking Their Potential appeared first on Mesh.

Today we’re talking with Emil Vasilev, who is the VP of Finance at Cherry as he shares his thoughts on life balance in finance and why it’s important for finance, CFO, FP&A, and accounting professionals to focus on their energy balance and making sure that they’re bringing their best to their teams, their families, and their organization. So Emil, welcome to CFO Trends.

Emil Vasilev (00:41):

Thank you very much, Chris. Thanks for having me.

Chris Ortega (00:44):

Yeah, yeah. So as we talked about, we’re coming into the summer months depending upon where you’re listening to this from. You may be listening to it in Europe or in Brazil and you’re like, “Chris, it’s wintertime.” But I think the topic we’re going to talk about here today is life balance in finance, and I think there’s been a lot of studies and there’s been a lot of quiet quitting and all the different things that are going on about having the right balance. And I know for finance, we’re always with the uncertainty and challenge that a lot of finance teams are facing, finding really like that balance is a challenging place right now. So to kick off the conversation, the first thing I want to talk about is what are some challenges that you see for finance professionals to really find that optimal work, life, work, whatever you phrase, balance in their current roles?

Emil Vasilev (01:32):

Yeah, absolutely. I think for all of us, especially in the last three, four years, this has been front and center. How do we find the balance? How do we integrate work into our daily routine and also family and interest and other not work things? It’s tricky. It’s hard. A lot of people are feeling burnt out, maybe not on a continuous basis, but at least once a quarter when the crunch time happens, there could be a couple of weeks of a lot of hard work, not much sleep, and that gets compounded with family and personal things as well. So it’s not an easy time to be working in finance or to be working remotely or to be in tech or any other sort of high-paced industry right now in 2023. And I think because it’s become so hard and we have so much going on, it’s even more important that we pay real attention to good ways, good habits of keeping our energy high in order to go through all this.

Chris Ortega (02:52):

And when we come in finance, we’re probably one of the only pieces of the organization that has our cycles. We always have our month in close, we have our quarter close, we probably have our quarterly board reports, we have our annual audit, we have our annual fiscal year, we operate in quarters. And for me, I think it is very important, because other people in the business, they don’t operate in such a calculated cadence that we do. They operate maybe in monthly or quarterly sort of things, and there’s big pushes around that. And I think one of the points that you talked about that I want to dive into a little bit more is you talked about habits and strategies, right? I know one thing that really helps me is from a life balance and just prioritization perspective. And I’m curious to get your habits and strategies and tactics too.

(03:40):

But one thing that helps me with just prioritizing things is I’m building fresh FP&A and working with clients and partners and teammates. And the whole shebang is something called the Eisenhower Matrix. And basically what the Eisenhower Matrix does, it’s from Dwight Eisenhower, which was a US president, and for trivia, I would get this wrong on Jeopardy because I don’t know what president he was, but he came up with a matrix that really grouped like priority and task based on two different things, importance and urgency.

(04:10):

So for example, if something was a important and urgent item, that’s something you should tackle immediately, right? So when you wake up, when I wake up, I look in my matrix at the top left and I look in important and urgent, and I look at that and I’m like, “This is what I need to get done.” And then there’s some things that are important but not urgent, and those are things I can plan for. So that’s been a really great strategy and tactic and framework that I’ve utilized to help me prioritize. So I’m not feeling this overwhelmed about every task that I get, “I need to get it done right now. I need to get it done right now.” What would be some strategies, tactics, or frameworks that you utilize to give you like that work-life, life-work or optimized balance in your career?

Emil Vasilev (04:54):

Absolutely. I think the Eisenhower method is great. I use a version of that myself and I also use different project management software to plan out the quarter. At my current company, we use the OKR framework at not only the department level, but the individual level as well. So that helps plan out the quarter ahead, and you can think of it in months or even weeks of where do I need to be to actually hit those goals? So that has been very helpful. On the work side, I think another key aspect of this is personal management. We have all these frameworks on how do we manage our workload, how we manage our teams, stakeholders, et cetera. But where do we fit in into that?

(05:52):

And often we become the last thing that we pay attention to oftentimes, and it is almost like a hidden tax that we bear. We spend our waking hours and energy working on building things for ourselves, so the company, et cetera. But oftentimes if we neglect ourselves, our energy suffers, our health suffers. There is this saying that I heard from a mentor of mine that people in business, and especially in finance that’s applicable, what we do is we spend half of our health generating wealth, and then we have to spend half of our wealth gaining back the health that we’ve lost.

Chris Ortega (06:45):

Dang, dude, that’s fire. I love that, dude.

Emil Vasilev (06:48):

And so we just need to ask ourselves, is that an intelligent equation? Is that an intelligent way of doing things? And I think not. And specifically to your question about frameworks, happy to dive into something that I follow personally if you want now.

Chris Ortega (07:07):

Yeah, let’s do it. Let’s do it.

Emil Vasilev (07:08):

Absolutely. This is a framework for energy management and peak performances. It’s so something that I learned about 10 years ago back when I was working investment banking and really had to deal with a lot of long hours and stress. And this is a framework that’s taught to athletes and C-level execs and also people in the armed forces. Normally I got to learn that as well through a friend. And it has four buckets to it, and it’s a framework for energy management. And the whole concept here is that the quality of our lives, the quality of our output is directly correlated with how much energy we have. An easy way to think about it is, okay, you come back home after a long day, you sit on a couch and then you get one email from your boss asking you to do the simplest thing, which would take you five minutes. But how do you feel about it?

Chris Ortega (08:11):

Horrible. You’re like, “Why do I got to do this now? I’m in chill mode.”

Emil Vasilev (08:16):

Exactly. You’re done, you’re done. And we’ve all been there. And yet the flip side of that is if our energy is high, if we’re enthusiastic, if we’re recharged, even the biggest challenge that we get, the attitude is like, “Oh, yeah, I’ll get it done. I have no idea how, but I’ll get through this.” There’s this valor, there’s this enthusiasm. And the only difference there is our energy level. So if we pay attention to, that’s something that we can control. We can’t control the outside circumstances and things that get thrown on us, but we can control our energy level. And there’s four pieces to that. All of us get our energy from different sources. The regular ones, sleep, food, this is basics. All of them are actually, I would say, very fundamental and basic. The third is breath, right? It’s overlooked. We all breathe at all times, hopefully.

(09:24):

But when we harness the breath in particular ways, then that can be a very powerful source of energy and a very powerful way to just switch context. In three, four minutes, you can regain your energy during a afternoon slump at 2:30. And there’s specific techniques around that. And then the fourth bucket of that framework is what I would call a calm, collected state of mind. And the most direct way to access that in my experience has been meditation. I’ve been a proponent of meditation and breath work for some time now. I teach it as part of a nonprofit called The Art of Living Foundation as well. And so that has dramatically improved my quality of life and balanced and also output throughout my career. So those are the four key buckets. And there’s more detail to it that we can get into, but I’ll pause here.

Chris Ortega (10:31):

Yeah, I love how you broke that down, man. And I think too many times for all the listeners, we look at… And listen, I’ll give a personal example of where I knew I wasn’t at my top energy level. I came into this conversation, I’m energized. I get to talk to a really good friend of mine and a great finance professional that I’ve learned tremendous amount from. So my energy level is good, but I remember being in public accounting and you’re talking about those four key elements of it. And I know for me, I wasn’t at my best in public accounting when I get out of school. I wasn’t sleeping well, I was putting in all these hours, I was eating unhealthy. Definitely, I know the other two didn’t even focus on my breathing, didn’t even focus on my mental clarity.

(11:17):

And I think to me, this holistic view is a lot of people probably just stop with, but you’d be surprised how if you make improvements in one of those areas, if you start sleeping better, you start sleeping better, then you’re like, “I got a little bit more energy. I feel more recovered, I feel more relaxed.” That only helps you physically, but there’s countless studies on how sleep is probably one of the best remedies that people can get. And then also the food intake that you get, the fuel that you’re putting into your body, that’s another one.

(11:47):

And I think a lot of people just look at those as two foundation baselines and say, “Hey, I stopped there.” I learned the breathing aspect of it in amateur boxing. So I learned that I was able to… My coach taught me, “Chris, one of the ways you’re gassing out in your energy level for your fights where you’re just feeling so depleted at the end and you just feel like you just exhausted everything was you’re not focusing on your breathing in the chaos. You’re not finding your calmness and clarity when people are throwing punches at you.”

(12:18):

And when I started focusing on my breathing and I started focusing and taking deep breaths and just having this almost interval of it, it really helped me in terms of my energy and it helped me throughout the day. And I haven’t gotten into the meditation thing, but I’ve heard from people, and there’s studies around that too, that shows when you’re able to get into that mental clarity and just slow down, I think too many finance professionals, we are running like zero to a hundred all the time, and sometimes you’re able to speed up when you slow down.

Emil Vasilev (12:52):

Exactly.

Chris Ortega (12:53):

For me, that’s so important. I love how you really articulated that balance for a lot of professionals in those four elements. So diving into one of those, for the listeners out there, the accounting finance, FP&A, and all the professionals that are going to be listening to this, if you were to focus on one of those areas that could probably make the most immediate impact from a conversation right now, what would be one of the areas that you would focus on for the listeners?

Emil Vasilev (13:19):

I would say breath. That to me is the most immediate, most bang for your buck levels of energy upliftment that can happen because literally in three, four minutes, if you do specific techniques, you’re able to really uplift your energy. One such technique, we can’t necessarily demonstrate it here, but it’s called yogic coffee or bellows breath. And so if some of the listeners are curious, they can look that up online. But it’s an active breathing technique, which I personally do daily in the morning. That’s my morning coffee. I actually stopped drinking caffeine over time as a result. And I also do it in the afternoon if I feel low energy, a low in 2:30, 3:00 PM. I think the thing about the breath is that all of these different buckets, the four buckets of energy, we can survive couple weeks perhaps if we’re lucky without food, maybe a week without sleep or maybe longer. Again, depending on the person, we can survive a whole life without a peaceful state of mind, but without breath, we only have a couple minutes.

Chris Ortega (14:38):

That’s facts

Emil Vasilev (14:41):

Yeah. And so it’s a core source of energy and probably in finance terms has the most opportunity for arbitrage. So it’s the most overlooked and the most potent way to get your energy up. The specific technique that I do as part of my morning practice is called SKY Breath, stands for Sudarshan Kriya, it comes from the East, comes from India, and has been tested in more than a hundred peer-reviewed studies, and in my personal experience is the most powerful technique that I’ve done.

Chris Ortega (15:21):

Yeah, and I love. And for all the listeners, I think definitely check those out. And I’ve actually had the opportunity live of you testing and doing some of those. And you can tell from the entire group, right? I’m going to vouch for it. I’m not just saying it’s all smoke and mirrors. You got a stamp of approval from Chris Ortega, right? I’ve seen those things too. And it’s just you have to be conscious of that. And I think too many finance professionals, we don’t have that check in so to speak. And I’ve struggled with this. Everybody struggled with it. We’re sitting at June 15th and I’m like, “It’s Thursday.” And I had that moment of clarity this morning where I’m sitting there, I’m like, “Man, it’s June 15th, it’s Thursday. There’s one more day of the week. There’s 15 days in the first half of the year.”

(16:04):

And Emil, I stopped and paused and I said, “Chris, I need to go for a walk.” And I would probably add a fifth element to that, getting natural sunlight, definitely when it’s summertime. And I found this to be helpful for me and my work-life balance as building my own business and working with clients is like when I get that 10 to 15 minutes, I’m like, “I’m going to go outside and I’m just going to go for a simple walk.” And here’s the biggest part of it, I don’t bring my phone. I don’t bring my phone, I don’t bring anything. I go for a walk and I just let my mind, wherever my mind wants to take me. If it wanted to take me to, oh, Chris, it’s seven o’clock at night and I have an eight. Wherever my mind’s going to take me, I’m just going to let it go.

(16:53):

But I think as people can think about like you got it… And in this work remote environment that we are, you’ve got to take that time to say, “Hey, man, how can I just take a break? Pause. There’s not be disasters happening in 15 minutes.” Maybe it does, right? I’ve seen banks go down in the day, so maybe we’re exaggerating. But I think as you can really, as you’re talking about, focus on those areas. You have to be intentional behind it. You have to put in the work, and these are things that you could implement and take away immediately.

Emil Vasilev (17:24):

Exactly. And it’s not complicated. It doesn’t have to be a complete overhaul of your lifestyle, just one or two things, as you mentioned earlier, a little bit more sleep. You go to bed a little earlier and start making that a habit. That pays off. It’s incremental improvement day by day, and all of a sudden, three weeks later, you feel completely different. And then from that point, you can take on even more changes, even more improvements, and you keep improving over time and it starts paying off right away.

Chris Ortega (18:02):

I love your point. I think for all the listeners, here’s my challenge to them. They need to set a OKR around those four elements.

Emil Vasilev (18:09):

I love that.

Chris Ortega (18:11):

Let’s go. We love finance. We set OKRs around revenue growth. We want revenue growth to grow. We want to increase our revenue. We want to increase our new customer acquisition by 30% in the first half of the year. I think as finance professionals, we can take that same discipline that we own and operate in and that we’re experts in and take that same philosophy and say, “Hey, you know what? I want to start sleeping seven to eight hours on a weekly basis in the next two weeks or so,” or from the food perspective, “I want to eat healthy meals and not eat out 80% of the time of a week, and I want to track how I progress on that, and I want to only, say, five days a week, I’m eating. Six days a week, I’m eating healthy, home cooked really good, nutritious meals, and one day I get my day where I go crazy or on my one meal.”

(19:03):

I think there’s the same way that we talked about, we already have these disciplines that we’ve been ingrained in ourselves and we’ve built, it’s just applying it to the most important point that you talked about. We do so much of this externally for our sales partners, our business partners, the CEOs, our clients, our prospects. We got to slow down and take that same discipline and that same intentionality and that same expertise to ourselves.

Emil Vasilev (19:30):

Absolutely, could not have said it better. And the personal OKR framework is a genius idea.

Chris Ortega (19:37):

Personal OKRs, I think we got a whole business right here. When you talk about ESG and you talk about that life balance and this topic is qualitative in nature, we’re not going to leave people with, “Hey, here’s the ROI and the SaaS metric that you can measure that gets you to scale.” It’s not that, man, because I had a great mentor tell me this. He says, “Chris, if you don’t show up your best and you don’t bring your best, even if your best is my 50% and my 50% is probably people’s a hundred percent, right?” But he said, “Chris, it’s okay, but just make sure you’re bringing your best.” And it’s okay to acknowledge.

(20:20):

I’ve been in meetings, I’ve been on client calls, I’ve been with partners, and I’ve said to them, “Hey, I’m not going to be in my best right now, but I’m showing up. This is my best. This is everything I’ve got right now. I want you to show that being my best and giving everything I can right now. It may not be my a hundred percent, but I’m showing up and giving everything I have.” And I think too many professionals don’t want to have that conversation with themselves and just show up and just, “Hey, this is how I’m showing up.”

Emil Vasilev (20:49):

Yeah, there’s a level of facing reality that is actually helpful instead of lying to ourselves or shoving it to the side. That’s the first step usually acknowledging, okay, I’m here now. That’s fine. There’s no judgment around that. If I don’t want to be here tomorrow, what do I do next?

Chris Ortega (21:12):

Exactly. Exactly. Yeah. I think that’s everything, right? We find self-awareness in the business that’s called insights and data. Usually we find that self-awareness, we’re like, “Hey, why is revenue down like 30% in our OKR?” That’s where we find the self-awareness in the business. We need to take that same philosophy back into these different buckets of our lives. Hey, man, I’ve love this topic so much, and one last question I have for all of our guests, and I’m curious to get your thoughts on this one, the topic life balance and finance or however you see, what is your number one finance trend and why?

Emil Vasilev (21:47):

Honestly, it is this. It is starting to pay attention to your own wellbeing amidst the chaos. I loved you sharing about being on the boxing ring and feeling gassed out because you’re not breathing. We’re all in a boxing ring, right? We’re all getting punched left and right. Depending on the severity of the punch or the day, we could feel that way. So what do we do amidst that chaos?

(22:19):

And the reason why I say it’s a trend that I see, the past three, four conferences that we’ve seen each other at, there’s been sessions on that. There’s more and more people who are recognizing that some of the habits of the past are not sustainable and are just not a fun way of being, not a fun way of living or a productive way of living. None of this is about sacrificing our success or our desires, but so often are we left, at the end of the day, we achieve everything, but if we’re completely gassed, our body is so unhealthy that it’s beyond recovery. Was it worth it? Maybe not. It’s about the 200% in life, the hundred percent of outer life and the hundred percent of inner life.

Chris Ortega (23:13):

Man, Emil, you dropping nuggets, bro. I love it. We need, as finance, we need to level up to 200%, right? There is no such thing as a hundred, and I think it goes back to what your mentor told you, right? We spend that a hundred percent so focused on giving that we’re giving the other a hundred percent to get the health back, right? Yeah, man. I think this topic with the continued challenge and uncertainty and just the overall difficulty a lot of finance professionals are making right now, we still see the reductions.

(23:41):

We still see the difficult models and all these things that are happening inside the macro and microeconomic situations, and I think a lot of times, if you can take that moment and find that space, find that clarity and find that within yourself to say, “You know what? I need to do this. For me to be at my best, for me to make sure that I’m giving my best to my team, to my family, to my career, to everybody, I need to make sure I do this.” And being okay that you need to take that time to do that.

Emil Vasilev (24:12):

Totally.

Chris Ortega (24:13):

Hey, man, your insights always a pleasure, bro, to talk to you. If people want to learn more, connect with you, maybe research more about these tips, how you’ve applied it, the awesome knowledge that you’ve been able to share, where can people find you? How can they connect with you? Drop that information.

Emil Vasilev (24:28):

Yeah, totally. I think the easiest way is LinkedIn, Emil Vasilev, E-M-I-L V-A-S-I-L-E-V is my full name. You can find me there. And also some of these practices that I referenced, they’re taught by the Art of Living Foundation, which is a UN NGO in more than 180 countries at this point, and they have a big presence across the US in different cities, so check them out on the website.

Chris Ortega (24:58):

Awesome, man. Hey, and I recommend, everybody, you always, bro. I love our conversations, man, because I always take away so much viewpoints and I’m taking away things, and I was sitting here looking at my notes and I’m like, “Dude, I’m going to put that into practice.” Hey, man, thanks for your energy. Thanks for sharing this time. Thanks for sharing this space with us. Thanks for having this honesty. Thank you all the listeners, and I hope you enjoyed this fresh perspective on life balance, and thank you for listening to CFO Trends.

Emil Vasilev (25:23):

Thank you, Chris.

Chris Ortega (25:25):

Thank you for listening in. Join us for our next episode where I’ll be talking with Andrew Jepson, the CEO of the FBP team as we talk about what gets you hired and promoted in finance. Also, don’t forget to follow our CFO Trends newsletter on LinkedIn for the latest episodes and updates.

The post Is Work-Life Balance in Finance Possible appeared first on Mesh.

Today, we’ll be talking with Avia Yudalevich, who is the CFO at Intrinsic Brands. As she shares her thoughts on stop burning cash ASAP. And why it’s important for CFOs to not just think about cash burn optimization, but how you’re equipping the business to drive those cash KPIs.

(00:34):

Avia, welcome to CFO Trends.

Avia Yudalevich (00:38):

Good morning, Chris. Thank you so much for having me. Excited to have this chat with you.

Chris Ortega (00:40):

Yeah, yeah. So, Avia to the audience, can you tell a little bit about your background, your experience, what you do, your company. Just share a little bit of scope about your background and your experience.

Avia Yudalevich (00:50):

Sounds good. Today I’m a CFO and head of supply chain for a CPG company. We’re health focused on women’s needs across their entire health journey. It’s a very exciting area. The name of the company is Intrinsic Brands, and we are young startup, two years old, growing, and this topic is very relevant to me and in general, I think, to startups.

Chris Ortega (01:13):

Yeah. For sure. Me, coming from my background, right? I remember working at a lot of different SaaS businesses and we have some small startup scale up kind of companies in our portfolio at Fresh FP&A. And I always sit down with the CEO, founder, business owner, and one thing I always worked through is they’re like, “What you need to be doing this three-year forecast? And we need to be doing all this long-range planning.” And I’m like, “None of that matters if you don’t meet payroll. None of that matters if you don’t have money in the bank in the next 12, 13 months. It doesn’t matter at this point.” So, I think one of my first leading off questions, Avia, speaking from your experience, what for the listeners are some of those top cash metrics that finance and CFO leaders need to be tracking at least on a daily basis?

Avia Yudalevich (01:59):

Awesome. So, first I just want to touch on what you talked about earlier in terms of the cash and burn in general. I think it’s a very important metric. It’s particularly important for startups and other early-stage companies because exactly what you said, if you’re not yet profitable, you have to rely on your cash reserves, you have to fund your operation. So, it’s a very critical indicator to see the health of the company and how much time you actually have and afford the operations before you run out of cash.

(02:27):

I wanted to just touch on another point that really profits our dream, but cash is a reality. And you have to be clever on how you manage that. Chris, back in the days, everyone said cash is king, but really, it’s cashflow-

Chris Ortega (02:40):

Definitely.

Avia Yudalevich (02:41):

Cashflow is king, and it’s very important.

(02:45):

So, let’s talk about KPIs. One little story just to illustrate the importance of this. I had this awesome young talent. He was a fresh accountant right out of college, interviewing very well with me. He did fantastically with his business case, and he passed it, and got a very good package. Then shortly after he started, he asked me, “Hey, how could we afford my salary? I see the cash burn.” And I told him, “Okay, that’s the first trauma you’re going to need to fix.” So, talking about the importance of it.

Chris Ortega (03:16):

Yeah. You talked about cash burn, right? And you talked about how… I think one of the most important elements of it is… And speaking from that accounting mindset, I think, too many businesses and too many finance people, right? When I look at cash, and you talk to an account or you talk to a finance, you talk to a CFO person, right? An account’s going to be like, “Look at your statement of cash flows. That’s one of the major financial statements.” And I’m like, “That tells you nothing.” Changes in accounts receivable like that. I measure cash by looking at the change in the bank account because at the end of the day that matters, right?

Avia Yudalevich (03:48):

Yes. It’s yes and no, Chris, to a degree. There are certain elements. I’m an operator. So, to me, the cash from operations is a very critical element. In the banks, you may have some movements. So, for instance, if you’re doing an M&A, you’re going to have some cash because you may be leveraged. So, right now in the bank, you may have a little bit more of cash. But the cash from operations is very critical. And what does that mean? It means that you have to be super savvy in understanding your business around your EBITDA. You have to ensure that there is a way for you if you leverage again to serve the debt, and you have to understand your working capital.

(04:22):

In my area, I’m coming from almost more than 15 years of experience in the CPG world, so working capital is very important. What does that mean? It means that I often look into, okay, how quick is my inventory turning, what is my investment behind inventory, and can I actually generate quick cash from that. How quickly does it take me to collect cash from customers? You want to ensure that your DSO is not up to the good zoo. And you are working with customers that can pay you, if they have the credit line, and they have the discipline to make payments in time, and you don’t have operational chargebacks and delays behind the scenes.

(04:58):

You have to be fair to your vendors from a DPO pretty few, right? So, I think partnership with your vendors is very important. You have to build that trust, but at the same token, ensure that your DPO is not quit, so you’ve generated those cash flows. So, really, I’m talking about that cash conversion cycle, Chris, which I’m looking at oftentimes. And I think it’s just a good indicator of how quickly I’m able to generate cash for the organization.

Chris Ortega (05:24):

Yeah. I love that. And you gave some great strategies around it too, right? And I think this is something. There’s an arsenal of things, but typically, right? Let’s talk a little bit about the market that we’re in right now, at least from a people perspective as it relates to cash burn, right? Avia, we see in the news where these companies are laying off 20%, 30% of the workforce, and it’s like all of it in people. But you just listed off five things right off the top that you could go and have an immediate impact on your cash burn that you don’t start with people. I never understood that part is like, you say people are your most valuable assets, and I get it. Most of the time in most high-growth businesses, startup businesses are like 80%, 90% of your expenses, 80%, 90% of your cash. But there are also ways that you can go about contract renegotiation. Looking at your DPO, what are some of those other non-traditional things that CFOs should go focus on to improve that don’t start with reducing people?

Avia Yudalevich (06:26):

A great question. I think, for the most part, again, I’m coming from a lens of a startup companies. I think oftentimes, you are going to invest ahead of growth, and hence why you have a cash burn. But people, the notion is that cash burn means cutting cost immediately. Oftentimes, you actually have to optimize some of your cash expenditure. So, for instance, is your CAC to LTV, does that ratio make sense? Are you fueling the business in a way that you’re optimizing your span and you’re being efficient? That way, you’re still going to generate positive EBITDA.

(06:57):

So, remember that it’s not really about immediately cutting costs. There is an element behind cutting costs where to your point Chris, the landscape allows us now to go back and negotiate contracts. Don’t look at fixed costs as a given. You can still go and negotiate. It can be a potential even rent. It can be software. You can challenge the team. Are they utilizing all of the tools that they have in their disposal? Is it really being optimized? And if not, can we ditch some of them? So, there’s a lot of questions on your day-to-day operations where you can improve without immediately impacting any need of [inaudible 00:07:32]-

Chris Ortega (07:31):

Yeah. And I think that operational focus man is a lot of the times when you look at these cost reduction measures, I call them Excel exercises, right? It’s just you’re looking at it, and you’re just doing comp. And I’ve had to do this, right, but I’ve had to make these reductions around people when I’m working with the CEO or working with the founder, working with the board, and I’m like, “I want to make sure we exhaust everything that we could possibly do. I want to make sure we renegotiate every contract agreement. I want to make sure we renegotiate every customer contract. I want to make sure we’re leveraging our banking relationships where is there certain lines, and venture debt, and other things that we can get that can help us bridge a gap as we can come across that growth.”

(08:12):

So, the point to all the listeners is you got to make… It’s not always about instant optimization and these quick excel exercises to do that, right? It’s a strategy behind it. And it’s not just a short term. It’s a short-term, medium long-term strategy. And I think another metric that a lot of businesses at least is cash runway, right? Cash burning, cash runway going the same size. So, talk a little bit more about how you look at cash runway, and how you measure it, and why that’s important.

Avia Yudalevich (08:40):

100%. Everything you mentioned, I want to build on that. I think that the cash runway is a very important element. You don’t want to get to a point where you held hostage, and you don’t have enough months to operate. That’s a very scary proposition. If you leverage, again, you don’t want to get to a point where you fly very low on covenants. So, that’s another super important element. I think that there are different short-term and long-term strategies. Ideally, you wouldn’t want to have a runway of 12 to 18 months. So, you can be strategic in your decision and not operate on a kind of a knee-jerk reaction, which usually brings to a point where people end up letting go some folks, which I think it’s a real detriment to the organization. So, the cash runway is something that I think it’s important as CFOs to understand your business model very well, to project, to look forward, to see where are the key cadence and where you have opportunities, identify those, flag that and make the decision and don’t wait. Be very active to address those.

Chris Ortega (09:44):

Definitely. I love how you said know the business, and this is common… I do a lot of thought leadership and meet with so many different CFOs and VPs and finance professionals from all across the world. And Avia, you’d be so surprised how many of them don’t know their business. You ask him, “Tell me about your business, and tell me about your ideal customer.” And they’re like, “What are you talking about? We do the balance sheet reconciliations in the audit. What are you talking about?” And I think knowing those pieces and taking it a step further, I think one thing that’s always helped me not only in building fresh FP&A and some of our clients, but also in my career is I would sit down with the business and help them understand, “Okay. Yeah, if we make this commission change, if we don’t pay commissions, if we pay it in arrears, are we paid at the end of the quarters?

(10:28):

Here’s how this immediately this decision what you want to advocate for or that maybe I’m advocating with the sales organization, here’s how this bottom line has an impact to our cash burn or cash runway. And I think that’s one of the best things that finance in this connection capacity with the business. I would sit down with them and say, “Hey, here’s why we want to sell an annual upfront all paid contract. Here’s why this is the best contract for us. Not necessarily from a revenue perspective. The revenue’s going to fall how the revenue’s going to fall, but this is why this kind of contract is so important for us from a cash perspective.”

(11:04):

And I remember doing these lunch and learn sessions with our software, with our sales and marketing team and walking them through the ideal contract I want them to sell. I want you to sell an annual upfront best case sale a multi-year. I’ll give you a little discount you can take, but we want to get that cash immediately. And Avia, it was so awesome when we did this and showed them because now they’re like, “I can see it. I can see how my dot connects here and how that helps Chris on the bottom line.”

(11:33):

And typically, when you have that relationship and you build that connection inside the organization, what do we start to see in our sales contracts? We started to see the contracts that we wanted to sell, right? So, I think a lot of it too is not just giving the metrics. It’s getting in the business to help them understand why it’s important for them. Why does operations, why does client success, why does marketing, why does sales, why should they care about those pieces of it and having finance be able to connect that dot of what’s in it for them?

Avia Yudalevich (12:08):

100%. I want to say Chris, in my organization currently, I’m very fortunate because our team is very strong and very [inaudible 00:12:15], but to your point, generally speaking, I would really encourage finance folks to be able to educate and provide context to the employees. Understanding your actions and the implications and the financial ramifications are really critical to a point around…

(12:29):

I just want to double click on the commission side and your [inaudible 00:12:32]. If you identify your customers and your business model, you can see that hey, for instance with international customers, you want to have a prepayment before you even ship the good. That way, you already in a positive cash flows. If you have a commission, you want to make sure you pay those posts, actually getting the sales and getting the cash. So, the commission is post collecting cash. So, here’s just different tactics that you can apply, and you have to ensure that you educate your team to always negotiate for terms, right? Always terms and ideally stretch that. So, if you can cut a deal for a year, but then, your payments are going to be quarterly and therefore you’re going to get the relief on the rate, it’s a win-win for all parties. So, that’s usually my modus operandi. I want to bring a win-win. I want to educate the team. I want to ensure that they understand the benefit and the added value. They help me to drive the wellbeing of their entire organization.

Chris Ortega (13:22):

Yeah. And I think that’s the most important part is I love doing that and enabling and equipping and educating the business because now, they’re taking the same financial acumen that I would take in a decision. And I loved your point around negotiation. And this is what a lot of people don’t or not comfortable doing. A lot of US companies, right? So, I had the opportunity at an international marketing platform company. And this is where I was VP of finance. And I was working directly with another finance leader that was Israelian. And he taught me the art of negotiating everything.

(13:54):

There will be contracts. And we’re sitting here as this $45 million growth software business. And he’s, Chris, you got to negotiate with Salesforce. I’m like, “I don’t know how that’s going to work. I don’t know if Salesforce is… Nope, you got to do it.” And you’d be surprised how many people don’t. They just take that at faith. This from a SaaS spin management perspective. This is where I think a lot of companies have a lot of opportunity to make an impact because you look at the pandemic and anybody was buying software. You were buying teams. You were buying Zoom. There’s probably organizations right now that have this bloated tech stack. And they’re probably paying for licenses that people aren’t using. There’s technologies on people’s credit cards. You know how that stuff goes. And it’s like, this is an opportunity to say, where can we go back and leverage these conversations that really make it beneficial and have the data to support it? And all of that comes through being willing to ask that question and negotiate.

Avia Yudalevich (14:52):

Yes. Essentially. First you have to… As I said, you cannot take it for granted. It’s a huge opportunity right now to reopen contracts, to go back and to understand the other side’s pressure point and come back with a solution that does not allow for churn on the other side but meets your cashflow needs on your end. I think that’s very important. But then, I wanted just to touch on one more point when it comes to… You talked about talking to the teams and ensuring that they understand that. For instance, I love it when we hire a new person that everyone understands the IT needs. So, the occasions that they need, they look into the cost, that treatment.

(15:27):

So, everyone is educated ahead of time. Hey, in my department, do I really need to invest X amount of dollars when I have a new hire or on an ongoing basis? Everyone looks into expenses on a monthly basis. So, we have the analysis, we look into that. We ask the question, we challenge the business case behind it, whether or not there is a good use case for that. So, the optimization needs to be on an iterative kind of mode. So, you revisit the needs and your needs, and the startup is evolved when they change. So, you have to be agile, and you have to be flexible, and you have to allow that. So, you have to allow for the growth and be poised for the growth, but at the same token control expenses, ensure that there is governance and be on the lookout for between.

Chris Ortega (16:06):

Yeah, for sure. And I think what we’re talking about too is when you have the business in that boat, typically, a lot of times I be like, “It’s finance commanding the business, right?” And when we are able to have that more collaborative relationship.

(16:20):

One thing I’ve always loved in finance organizations that I’ve led is we’ve always had a healthy tension with the business. When a healthy tension is like… It was always, “Yeah, we were great.” And once we knew we’d get down the business, you can see the level kind of increase. Not like a negative level, but you can see it increasing. And we would have those healthy conversations. And I think right now, what you’re talking about, which is the ideal stay for finance teams is like you got to have that healthy tension with the business because, at the end of the day, it is our responsibility to make sure we’re looking after the financial assets of the business, right? That is what finance is doing, right?

(16:58):

But if you’re looking after that health and that finance and that cash burn, that cash runway, that DPO, that cash conversion cycle, which a lot of things that we talk about, but you’re looking at it just to command the business, you’re not going to move as fast. And I always have a quote to that, right? If you want to move fast, move alone. If you want to move further, move together. And I think that’s so applicable what finance things to bring to the business.

Avia Yudalevich (17:23):

I love that. In terms of healthy conversation, I think it’s really important that as a finance person, you also allow for transparency dialogue for us. By the fifth business day, we usually try to have already a flash P&L. And the entire company is very gear toward the KPI that’s going to drive cash flows. So, we’re all marching towards the same order, which is really our financial North Star and outside the transparency on how you run the business and what are the implications of the [inaudible 00:17:50]…

(17:50):

If you show the team by the fifth business, this is how we’re looking. This is how the financials look. They can already impact next month immediately. And they make the decision on the spot, so you can really act today. And outside that, I would just also add that. Again, I’m coming from the CPG world. So, you buy inventory, and you take positions, and you take bets. And as long as you know how to pay for those bets, so on the cash burn, you don’t get to a position where you’re bloated, you overbought, and you have a lot of weeks of supply on a certain skew. How do you optimize that? So, that’s another way having the visibility and the discussion and the dialogue and what are the really at a very low level of the information in order to ensure that there’s no any potential future issues.

Chris Ortega (18:32):

Yeah. It’s always that balance. I remember looking back, and I remember telling all the listeners, and I remember I didn’t get that balance right. And I didn’t get that balance because I… And this is where I think data and systems, everything that you talked about, right? You are in a high growth business constantly placing bets. It is like you’re at the Vegas crafts table. You’re constantly putting money out. And I put money out in a software company, and I didn’t get the bet. But one thing I learned from it, basically, the situation was we’re coming into a biweekly payroll. We paid our commissions at the end of the month, so we’re coming into pretty heavy commissions because we’re later in the year. So, people’s plans are building, and I made the mistake. I looked at some information around customer payments, and I missed timed one of them because I got the date wrong. I thought it was going to be in November, but it was actually going to be at the end of December. And it was a pretty sizable cashflow that I looked.

(19:29):

Avia, I remember walking into the… First thing I always looked at is always the bank account. I never looked at the P&L. First metric I looked at coming in the company, it was always on my phone. I would wake up, and it’d be right there as an alert, right? And I seen it red, and I seen it with the parentheses. I was like, “No, this is not good.” And I remember coming into it. I calling our bankers and I was like, “Hey, what are we going to do around this?” And for me, the biggest learning I had for that, for the listeners around it is systems like having that proactive, like you say, it ties exactly directly to your comment on the fifth day. You have to have that speed and that visibility. And as finance professionals, you got to be comfortable to quickly pivot or you got to quickly adapt and say, “Nope, this isn’t working out. We got to change, and we got to adjust pretty fast. Who do I need to?” So, you talked about this earlier that agility aspect is so important.

Avia Yudalevich (20:27):

Very 100% hands down on everything you just mentioned.

Chris Ortega (20:30):

Yeah. Yeah. Cool. Hey, one last question I always ask guests is what is your number one hot finance trend, and why?

Avia Yudalevich (20:38):

In my business specifically, it’s very important that we can scale. We basically grow by virtue of acquisition, so scalability is a very important element. I always tell the team around me, “Hey, whatever you do today, you have to think about 10x and 20x in the future. So, how are you going to plan for that? So, automation and scalability are two areas of something that I really constantly do to search for. AI and machine learning I’m sure can help finance as well. It’s a very hot topic today. Most of us have been already using some of those tools. I’m sure it will continue to evolve and add more value to finance people in the future, either through fraud detection or credit to risk assessment or allocation, of course, investment analysis, et cetera, et cetera. So, that’s an area that I would’ve liked to be able to apply more in the future.

Chris Ortega (21:32):

Yeah, automation and scale, man. I think that is probably one of the cornerstones of every high growth business. All you got to be thinking about. I love your mindset shift. It’s like, how are you thinking about what you’re doing 10, 20, 30x? Really great insights. Thank you sharing for that. If people want to learn more about you, connect with you, learn more about what you’re doing, where can they find you? Where can they connect with you? How can they learn more about you?

Avia Yudalevich (21:53):

Thank you. I’m very open. Feel free to shoot me a notes through LinkedIn. I’m there, and I’m usually available, and I respond very quickly. So, that’s the best approach.

Chris Ortega (22:04):

Awesome. Awesome. Yeah. Definitely connect with you, Avia. I really appreciate this conversation. Thank you so much. I was sitting here taking notes, and I’m like, “Man, so much insights in there, so many different strategies,” and thank you for being part of CFO Trends. And thank you so much for your time.

Avia Yudalevich (22:20):

Thank you, Chris. Pleasure talking to you today.

Chris Ortega (22:23):

Thank you for listening in. Join us for our next episode. Well, I’ll be talking with Emil Vasilev, the VP of finance at Cherry as we talk about life balance in finance. Also, don’t forget to follow our CFO Trends newsletter on LinkedIn for the latest episodes and updates.

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