CFO THOUGHT LEADER is a podcast featuring firsthand accounts of finance leaders who are driving change within their organizations.
We share the career journey of our spotlighted CFO guest: What do they struggle with? How do they persevere? What makes them successful CFOs? CFO THOUGHT LEADER is all about inspiring finance professionals to take a leadership leap. We know that by hearing about the successes — (and yes, also the failures) — of others, today’s CFOs can more confidently chart their own leadership paths across the enterprise and take inspired action.
644: Thwarting COVID By Rethinking Opportunities | Mike Brower, CFO, Office Evolution
Mike Brower, CFO, Office Evolution
643: The Rise of People-Centric Finance | Katie Rooney, CFO, Alight Solutions
Back in 2015, Katie Rooney was only 7 months into her first industry CFO role at Aon when her boss asked her to exit the office.
“He came into my office on November 1 and said, ‘I’m retiring, and I want you to take on my role. I’m leaving in 8 weeks,’” recalls Rooney, who says that the news triggered a mix of surprise and fear, which she recalls outwardly expressing with the words “Oh, my God!”
Her boss quickly sought to ease her concerns.
“He said: ‘You know what? It will be the best thing for you. If I stick around, you will never get the credit from the team,” explains Rooney, who subsequently swapped her CFO business unit responsibilities for her boss’s broader, divisional-level CFO portfolio.
Looking back, Rooney confides that she expected to someday to fill her boss’s shoes, but perhaps in 2017 or 2018—and certainly not in 2015. For her, though, the timing would turn out to be most fortuitous.
In early 2017, 13 months after she had officially taken on her boss’s role, Aon announced plans to sell its employee benefits outsourcing business to private equity firm Blackstone Group as part of a “carve out” strategy that eventually rebranded the stand-alone business as Alight Solutions.
“We called ourselves a $2.3 billion startup,” remembers Rooney, who says that she now realizes how her boss’s decision to step aside in late 2015 ensured her inclusion in the early round of discussions that ultimately led to a deal with Blackstone and her subsequent appointment as CFO of Alight Solutions.
“We kind of had this moment when we said, ‘The capital structure and some of the margin components just don’t fit with the larger business,’ so we started thinking about carving the business out,” responds Rooney, when asked to recall the moment of insight that may have helped to hatch Alight Solutions. –Jack Sweeney
Rooney: As I think about the next 12 months, we have to execute on the strategy we've now brought together. We are at this incredible place in time where our business is uniquely positioned to help solve the needs of our clients and their employees. We can help drive down the total cost of the workforce. We can try to drive and improve health outcomes. And as we think about the financial stresses created by the pandemic, thinking about overall financial wellbeing, there's so much opportunity here, and we've pulled the strategy together, and as I mentioned, I think we've built the right KPIs around it.
We're now working on building out a detailed operating plan that will hold us accountable day over day around executing against this, because its about driving more value. We're taking an outcome based approach. We're leading with technology and really looking at everything, but we now have to hold ourselves accountable day over day to execute against that. And I think finance plays an incredibly important role there as we think about how we develop the operating plan to get all of our leaders, all of our businesses, aligned around what's required to drive that forward. So that's really where we're focused here over the next couple of months.
642: The Virtues of Top Line Growth | Sachin Patel, CFO, Apixio
It’s not uncommon for career-building executives inside the finance realm to obtain an MBA in order to pivot their careers in a new direction. Such was the case for Sachin Patel, who after finding some early success as a systems engineer at IBM Corp. began to study the path before him more closely.
“One of the things that you don’t very often get to do as an engineer is to articulate what you did by using the written word or even verbally. Just having this not be a feature of the job was something that began to be evident to me,” says Patel, who as the years passed found the laconic nature of engineering to be in direct conflict with his growing desire to play a more active role in shaping and influencing business strategy.
“I looked at two areas—investment banking and strategy consulting—and began pursuing both, which probably wasn’t the best approach from a time management standpoint,” explains Patel, who says that ultimately the numbers—or, as he describes it, “the common wiring between engineering and finance”—drew him toward the world of finance.
With an MBA in hand, Patel joined Citigroup and set about developing the relationships and industry insights required to succeed in the investment banking realm, until one day—roughly 4 years after his carefully executed career pivot—he received a call from a friend and business school classmate with a job opportunity.
In short order, Patel was accepting a director of finance role with Vantage Oncology, a network of cancer centers and supporting physicians that was quickly expanding across the country. Over the next 4 years, Patel would build and lead Vantage’s FP&A team as he advanced from controller to the CFO office, where in 2016 he ultimately helped to sell the company to McKesson Corporation for $1.2 billion.
Looking back, Patel credits his years at Vantage for providing him with consecutive opportunities to prove himself as he climbed steadily upward. Still, he makes clear that his success there was not always obvious. In fact, even before he accepted the position, he needed to confront a potential obstacle that surprisingly had little to do with strategy or Vantage’s financial footing.
“An interesting wrinkle was that I reported to the business school classmate who recruited me,” explains Patel, who at first mentions his classmate to highlight the added rewards of having returned to business school but is compelled to emphasize the added complexity of such a relationship.
“It was good that we had the baseline of a friendship, but sometimes this can lead to a little more ruffling,” he says, before giving kudos to his classmate as well as to Vantage’s management team for creating an environment where the two friends could both succeed. –Jack Sweeney
Patel: We developed an in-house pricing tool for each of our solutions that we offer. And so based on our experience out of what the different components of the expense were, whether it's human time from the operations team, over to cloud expense that I mentioned, anything else that all gets folded into there, I should say, and then we can set the pricing based on that. And this tool allows them to check each of their contracts, or as they're negotiating they can check those margins using that tool. Ultimately, that goes to our chief growth officer who oversees that, and then if we need to make any additional decisions around that, we meet as a group.
But it's become part of the practice, and I think they were actually looking for that being that we are developing new solutions. You're not entirely sure how we should price those in the market when it's a new solution. Many times there's a lot of puts and takes there that you have to consider. And so early on it was a very much live discussion, but now it's part of the standard process, and very much something we follow.
641: The IPO Playbook & Creating Opportunity for Others | Steve Cakebread, CFO, Yext
“It’s not cheap to go public,” concedes CFO Steve Cakebread, echoing the oft-repeated refrain that founders and CFOs confront when considering the prospect of selling shares in their companies to the public.
Concessions aside, it will come as little surprise to Wall Street and private investors alike that Cakebread—a seasoned finance leader who has taken public such companies as Salesforce, Pandora, and his latest firm, Yext—has come not to bury IPOs, but to praise them.
And 2020 might be the year when founders and CEOs are prepared to listen.
Certainly, few of Cakebread’s CFO admirers are likely to question the finance leader’s keen sense of timing. In fact, more than a few will likely be making room on their bedside tables for Cakebread’s soon-to-be-released The IPO Playbook: An Insider’s Perspective on Taking Your Company Public and How to Do It Right (Silicon Valley Press, 2020).
“With all of the macroeconomic and pandemic issues going on, there have been as many—if not more—IPOs through August than there have ever been in the past couple of years,” says Cakebread, signaling an optimistic note for U.S.-listed publicly held companies, which have seen their numbers cut in half over the past two decades.
The coronavirus, it turns out, might in part be the antidote for Wall Street’s IPO blues. As COVID-19 spread, many companies made greater operational discipline and efficiency top-of-mind, which in turn led to the adoption of governance practices more commonly used by publicly held companies.
What’s more, they began doubling down on culture, a trend that has prompted IPO-minded founders to more thoughtfully expose the connective tissue between public ownership and social responsibility.
“Most founders want to create opportunity both for themselves and for the people around them, and this happens only when you go public,” explains Cakebread, who notes that the social responsibility aspects of going public were a big incentive for each of the companies that he took public, including Salesforce, where he and CEO Marc Benioff identified a number of benefits.
“Marc and I talked about it a lot before we took Salesforce public. The discipline of going public makes your organizational governance better. It makes companies more socially responsible, and this was a big item for him and for me. It grows careers and spins off other technology companies,” continues Cakebread, who joined Salesforce as employee #67, when the $17 billion company was eking out a quaint $20 million annually.
According to Cakebread, public firms operate with a certain rigor that privately held firms struggle to match—and VC-backed and private equity–owned firms can at times miss the big picture.
Notes Cakebread: “I actually find it tougher to work with VC boards because all they care about is the numbers. They don't care about the opportunity so much.”
To Cakebread, the IPO process is important because it allows CFOs to realize their role as visionary storytellers with the ability to articulate a narrative that educates others about where the business is headed and what opportunities are being pursued.
“You’re always going to have one number out of whack every quarter, but if the sell-side research people understand the underlying story, they can teach the longer vision to their investors and say, ‘This is an upsy-downsy quarter, but long-term, this business is intact,’” he observes.
Asked how diminished listings of U.S. public companies have likely impacted industry over time, Cakebread points to the dynamics of wealth creation.
“This has meant less access for most of us, and I think that this is helping to create this disparity between people who are very wealthy and people who aren't because they can’t get access to the market,” says Cakebread.
“This is a challenging topic
640: Communicating Your Strategic Plan | James Samuels, CFO, EXUMA Biotech
Jamie Samuels still recalls some of the raised eyebrows that he saw after having completed in short order both the verbal and written portions of an exam that his future employer administered to job applicants.
Not unlike most of his fellow applicants, Samuels had been invited to take the exam after responding to a newspaper advertisement, but, unlike his peers, he had been the only foreign applicant—or, more important, the only foreign applicant able to complete both portions of the exam in fluent Chinese.
“At that time, my written Chinese was very good because I had only recently completed my senior thesis,” explains Samuels, who first became immersed in the Mandarin-speaking world in the early 1990s when at 18 years of age he spent 12 months in China in a gap year before returning to the U.S. and entering college as a Chinese language major.
“Language is a tool to go do something else, so I spent a lot of my early career in trying to figure out just what that ‘something else’ was,” remembers Samuels, whose stellar exam performance earned him a junior sales rep position with a Taiwanese medical device company.
“While I was good at sales, I discovered that it wasn’t for me—it was too much of an emotional roller coaster,” observes Samuels, who would remain in Taiwan but change companies as he migrated from sales into a corporate development role.
The job switch was enlightening.
Says Samuels: “It taught me that my financial toolbox was lacking. My response was to get myself into the most quant-oriented MBA program that I could.”
Samuels returned stateside and nabbed a Wharton MBA before being recruited by Johnson & Johnson to fill a CFO role at a small Taiwanese operating company.
“They don’t give CFO roles to fresh MBA grads for nothing. They had an operating company that was in a little bit of trouble in Taiwan, or so I figured out after starting the job,” confesses Samuels, whose career with J&J would last more than 10 years and span a variety of senior finance positions in cities such as Beijing, Shanghai, and Hong Kong.
Next, Samuels stepped into a CFO role for a privately owned manufacturer of air compressors. Based in Taiwan, the company operated six plants in the United States and Europe.
Finally, with more than 20 years abroad behind him, Samuels began considering CFO career opportunities back in the United States.
“When you spend as much time as I did in the Far East, you risk getting pigeonholed,” says Samuels, who, as CFO of EXUMA Biotech, may have finally figured out what that “something else” is.
Headquartered in West Palm Beach, Fla., EXUMA produces cancer-fighting therapies largely developed at research facilities in Shanghai and Shenzhen, China—a strategic advantage that Samuels seems uniquely experienced to leverage. - Jack Sweeney Signup for our newsletter
639: Thriving at the Deep End | Catherine Birkett, CFO, GoCardless
Back in the early 2000s, Catherine Birkett found herself being pulled into confidential meetings where her company’s senior management was discussing restructuring plans with the company’s largest investor.
The company—a fiber optics telecom firm known as Interoute—was not yet 6 years old, but its days appeared to be numbered as the company sought to weather the telecom industry’s historic collapse.
As Interoute’s top FP&A executive, Birkett knew from the ongoing business plan’s numbers that massive changes were urgently needed, and she as well as others were not optimistic about the restructuring options available to the company.
In fact, Birkett recalls, she and many executives had to tamp down the feeling that “this was not going to end well.”
From a career perspective, Birkett arguably had less at risk than the other more senior executives sitting ringside during the restructuring discussions. Not yet 30 years of age, she joined the discussions knowing perhaps that other more gainful career opportunities were available to her outside Interoute’s four walls.
Nonetheless, she had been given a seat at the meetings out of recognition of not just her ability to recite numbers but also her grasp of the intellectual property that governed the numbers.
“I owned the business plan,” Birkett explains.
In the end, the company’s multiyear restructuring allowed Interoute to find a new path to growth while operating under a new management team—one that included the 32-year-old Birkett as CFO.
“I was thrown into the deep end as a finance leader—I basically had to learn on the job,” recalls Birkett, who entered Interoute’s CFO office in 2003 and went on to serve in the role for the next 15 years.
“We managed to transform the company,” says Birkett. Along the way, Interoute marched in step with a new private equity firm owner and closed a string acquisitions. Ultimately, the company was sold to GTT Communications in 2018 for $2.3 billion.
“Being promoted so young, I definitely made mistakes,” admits Birkett, who credits her CEO and other members of senior management for standing behind her as she ran at breakneck speed to acquire the skills necessary to manage a quickly expanding finance team. –Jack Sweeney