CFO THOUGHT LEADER

Back in 2014, when Akash Palkhiwala was first approached to serve as treasurer of wireless technology company Qualcomm, the company’s future CFO was uncertain as to what the role of a treasurer might actually entail. “I’m not making this up: I did a Google search on what a treasurer does,” explains Palkhiwala, who recalls that the approaching retirement of the firm’s incumbent treasurer had led then-CFO George Davis to gauge Palkhiwala’s interest in the role. Palkhiwala had first joined Qualcomm in 2001, and during his early years with the firm had been involved in the wireless firm’s M&A activity. Eventually, he graduated from a succession of financial planning and analysis roles through which he had rendered a steady flow of strategic insights for Qualcomm management as the company climbed from 3G to 4G to 5G along the wireless continuum. “Although I’ve been here for 20 years, I feel like I have changed companies multiple times,” comments Palkhiwala, who notes that the treasurer role ultimately proved to be one of his career’s greatest learning grounds. “It was just a fantastic experience. I did a lot of different things that I had never done before and worked with a whole new set of people, got exposure to the financial markets and the banking system, and created these new relationships that today I see as foundational in being successful as a CFO,” observes Palkhiwala, who adds that while today he knows that he made the right decision, accepting the treasurer position did require a degree of courage. Says Palkhiwala: “I was recently talking to someone who was facing a tough career choice. He explained that you get maybe three windows of opportunity in the course of your career, and your success or failure over time is largely defined by your courage when windows of opportunity show up.” –Jack Sweeney 

Featuring FP&A Insights & Commentary from Planning Aces: Ian Charles, CFO, Flexe, Beth Clymer, CFO, Job Case,  Mark Shifke, CFO, Billtrust, Mike Rasic, CFO, Synapse.

Back in 2011, when Radiant Systems was acquired by NCR Corporation, a door swung open for Radiant Systems controller Geoff Brannon, who received an invitation to join NCR’s plus-size FP&A function as a finance director. The appointment had been made possible by a former Radiant boss who had stepped into a divisional CFO role shortly after the acquisition’s completion. “He took a bet on me,” recalls Brannon, who says that the former boss knew his skillset well and had witnessed firsthand “a willingness to learn.” However, up until his NCR appointment, Brannon had resided mostly in the accounting side of the house. Looking back, the one-time controller tells us that he was also known as a collaborator and problem-solver who had distinguished himself through an easy manner when it came to working with others—a trait coveted by many FP&A leaders. A few years later, when the divisional CFO was recruited elsewhere, Brannon was tapped to be the division’s new CFO. As a new leader, he has come to appreciate the management approach that NCR used when it came to forecasts. Reports Brannon: “On a weekly basis, the division president, the division CFO, and the sales leaders would gather. We’d talk about not just the forecast for the quarter but also ‘weekly commits’ and how that particular week, for example, was going to generate $15 million of new sales. The following week, when you came back to the table, you’d be asked, ‘Did you do $15 million?’—and if not, you’d be asked, ‘Well, why did you only do $12? million? Why did you miss?’” Brannon adds that his division was known for having an enviable distinction: “We were probably the smallest division from a revenue perspective but the most profitable. So, we were something of a shining star at NCR.” –Jack Sweeney   CFOTL: Tell us about Oversight Systems. What does this company do, and what are its offerings today? Geoff Brannon: We’ve been around for, let’s see, 18 years. We’re not a new company, but we’re a growing organization. When I joined back in 2017, we had about 65 employees; now we’re up to 165. Our revenue certainly has continued to grow at a 30% annual CAGR. We’re a software company that serves enterprise customers, and what our software does is essentially to analyze spend. If you look at our customers, we are ingesting their spend, whether it’s in payables, P cards, T&E. We ingest that spend into our system and analyze it for duplicates, noncompliant spend, errors, fraud, waste—you name it. It’s almost like an insurance policy for cash leakage and all of the things that go along with this. When it comes to a metric that is top-of-mind, it’s ARR, annually recurring revenue. This is really what we measure ourselves on at the highest level and the number one metric that matters to us. It’s not the only thing, of course, but, you know, when we talk to our board or internally, it’s always like, Where are we on ARR? The other key metric for us is retention, so retention of customers and the recurring revenue stream are both super important to us. Over the next 12 months, the biggest thing for me and my team will actually be to implement a new ERP system. As we’ve grown over the past few years, we’ve gotten to the point where we’ve outgrown our current ERP system. We’ve already started seeing some demos by providers out there, so I think that this is something that we will probably be taking on in early 2022.

Back in the early 1990s, Laurence Capone was a Paris-based public accountant serving a distinguished list of oil and gas industry clients when she heard about an audit assignment unlike any that she had taken on before. It turned out that a manufacturer of cotton fabrics had engaged Capone’s firm to help to audit the operations of its subsidiaries located in central Africa. As a team was being assembled for the client engagement, Capone did not hesitate to express her interest and shortly found herself departing for a monthlong stay on the continent. From the start, Capone knew better than to expect an indulgent environment. In fact, the region of central Africa—including Chad, where she would be based—was still experiencing waves of casualties from the AIDS epidemic. “I was working with this local CFO, and even just getting together an accounting team was a challenge. Locally, 30% of the individuals had passed away due to AIDS or HIV,” recalls Capone, who says that early in her career she would frequently take on assignments that no one else wanted. However, the audit assignment in central Africa stands out. “The experience really marked me,” comments Capone, who adds that at this stage of her career she would also purposely pursue assignments involving different industries and different world cultures to broaden and test her business acumen. The audit assignment in central Africa included both of these, as well as another realm from which to learn. “You can imagine the social and human facets of the challenges that these companies were facing in the early ’90s,” remarks Capone, who credits the assignment with opening her eyes to the human side of the enterprise. Says Capone: “It was the people and the people story behind everything that I was able to gather and learn from. The personal side and the life experience were very important.” –Jack Sweeney

It was little more than 6 months after Matthias Tillmann first joined Trivago—and shortly after the travel booking company’s December 2016 IPO—when the company’s future CFO decided to step away from his senior IR role in order to head up Trivago’s creative production function. However, the jump to the creative side was not triggered by a sudden creative itch on Tillmann’s part. Instead, he was determined to extract new ROI insights from Trivago’s television advertising dollars, the very allocation that the online travel platform is credited with having converted into a groundbreaking strategic advantage. “I started to develop my own hypotheses but was unable to test them,” reports Tillmann, recalling his frustration when it came to extracting greater ROI from Trivago’s annual TV budget, which by 2019 had grown to more than $600 million, or roughly 70 percent of the company’s annual revenue. “In finance, you see numbers, but if you really understand the decision-making processes behind them, this changes how you identify opportunities and look at risk,” explains Tillmann, who today credits his tour of duty on the creative side with having bestowed upon him detailed knowledge about marketing decision-making. When COVID arrived, Tillmann notes, this knowledge allowed him to confidently respond to the crisis and take steps that would quickly modify the company’s brand marketing strategy, thereby saving the firm millions of dollars. Still, the lingering pandemic has continued to stress test a number of Trivago’s market assumptions.    Says Tillmann: “Pre-COVID, we had a very good idea with regard to how many people were out there and how many were willing to travel, and we knew how much to spend on TV—but this has now all changed.” In certain markets, Tillmann observes, roughly 50 percent of the traveling public may still not be willing to travel just yet. “For a mass channel like TV, this means that the channel is only half as efficient as it used to be,” comments Tillmann, who adds that the current environment has led Trivago to keep a steady eye on the size of each market and its accompanying pool of potential travelers.  “We began looking at what ratio we needed to hit in order to make our economics work on TV,” continues Tillmann, who says that the travel platform has recently turned to alternative channels such as online video when the economics for TV haven’t panned out.  Tillmann explains: “On YouTube, you can target certain audiences. For example, 25- to 30-year-olds may be more willing to travel at the moment, and that channel allows you to target certain groups much more specifically.”  As for whether the TV-driven brand is opening a new brand marketing chapter, Trivago’s CFO says, “The way we do brand marketing now is much more granular. This is the way that it has to be, as we pay more attention to how the markets develop.” ­–Jack Sweeney CFOTL: Tell us about Trivago. What sets this company apart today? Tillmann: Yes, sure. This is a topic that I love to talk about. I love travel. We started as kind of a Wikipedia for travel 16 years ago and then only focused on hotel price comparison. The core value proposition is still our hotel metasearch, which is based on a cost-per-click model. We have over 5 million properties through more than 200 booking sites on our platform. It’s a classic marketplace, where travel agencies, hotel chains, and independent hotels bid in our auction and essentially buy refers from us. This is how we make most of our revenue. I would say that we were very early in the game and one of the first focusing on hotels only. In 2008, the founders made the decision to diversify their acquisition channels by building their brand through TV advertisements at a time when most bookings were still happening offline. With this strategy, we became an essential part of the offline-to-online transition, which we could then observe for the next couple of years. Online travel was a major tailwind for us and for the whole industry. Later, we added apartments, houses, and vacation rentals to the platform, capturing the whole accommodation space. Obviously, today, there are a few more players in this space. Competition has increased, in particular since Google started to push into our domain with their own meta product, but I think that what sets Trivago apart is the ability to learn very fast and adapt quickly. For example, as a response to the COVID crisis, we developed a local travel product with the idea of offering a more inspirational product. We launched after a couple of months and have now extended the use case for unique weekend getaways. We recently rebranded the product as Trivago Weekend. Essentially, with it, you can find local things to do even if you do not wish to travel or stay somewhere overnight. If you just want to take a short trip and go somewhere, you can also find great deals there. I’m really excited about this opportunity. Nobody owns this category, and we are excited to try it. I think that we have the ability to move fast and develop great products that solve travel-related pain points. This is the core of what we do. Looking ahead—obviously now, with COVID—everything is a bit uncertain. We already are seeing change in travel behavior. A lot of people speculate on how permanent some of these changes will be and what comes next, but I think that whatever happens, it’s a dynamic space—and I’m sure that over the next 5 to 10 years, there will be many more changes. COVID won’t be the last event that maybe changes the way that we travel. It’s important to stay flexible and adapt and look at it from the user side, really. Look at user pain points because with every development, new opportunities come up and new problems need to be solved. We have a decent-size tech team working on these kinds of products, and I’m excited to be a part of all of this.

  In front of the restaurant’s dozen or more cash registers, customers were standing six or seven deep when Brice Hill raised his voice and began instructing the hungry mall shoppers to immediately exit the store. “No one listened to a single word I said,” says Hill, who opens our discussion by transporting us back to the mid-1980s, when as a teenage recent graduate of McDonald’s management training program he was given a surprise leadership test. Having made a trip to the mall for some holiday shopping, Hill had poked his head into the mall’s marquee McDonald’s only to find a few of his fellow managers nervously waiting for a return call from McDonald’s headquarters. The restaurant—at the time one of the busiest McDonald’s locations on the West Coast—had only minutes earlier received a bomb threat, and as Hill digested the blank stares triggered by his shouts to clear the store, he realized that more extreme measures were required. Leaving the customers in their queues, the young manager dodged the doubtful stares of employees as he maneuvered his way to the back of the store, where he found the location’s electricity source and without hesitation cut it off. “They had told me that 20 minutes was the countdown on the thing—we cleared the whole place with only 4 minutes to spare,” recalls Hill, who estimates that the location may have held as many as 500 customers and workers that day. Later, police would determine that there had been no bomb, but this has never led Hill to second-guess his actions. “When you’re in that type of situation, you have to be able to act and act like an owner. Even if you don’t know whether you have the right answer, you have to act. There cannot be a void of leadership,” says Hill, underscoring what might be a recurring theme for his career. Fast-forward a few decades, and Hill is a senior strategic planning executive at Intel Corp. The venue is an Arizona conference room where a group of Intel executives—including the company’s CFO—has gathered to hear Hill offer an analysis that could potentially lead Intel to begin building idle factories. This time, the doubtful stares quickly turned to dissenting voices as Hill’s strategic analysis failed to win over many of his Intel colleagues.   “When I made the recommendation that we should build an idle factory, there was like a melee in the room. All of the CFO staff was arguing, waving their hands, debating different opinions,” explains Hill, who says that in the minds of traditional finance executives, an idle building equals excess cost. To highlight his point Hill repeats the refrain of “You have to heat it, cool it, and guard it!” Still, what Hill’s analysis had begun to spotlight was the cost of missing out on growth opportunities in a business wielding 60% to 70% gross margins. Suddenly, having idle factories in place to add additional capacity when growth demanded seemed to have merit. “At the end, the CFO said, ‘Bryce, I want you to go meet with the treasury staff. They’re experts in derivatives and option modeling. I want you to go see if your math holds up,’” remembers Hill, whose analysis received “a clean bill of health” from treasury before getting a thumbs-up from Intel’s CEO, a final affirmation that led Intel to modify its growth strategy as well as its accounting. Going forward expenses associated with serving the idle factories would be listed as strategic investments rather than costs – a change that has perhaps made management think twice before turning off the lights .  –Jack Sweeney 

Brett and Jack discuss the highs and lows of executive compensation, and  why corporate culture may trump all.  Featuring the commentary and insights of workplace champions CFO Gregg Clevenger of LiveVox, CFO Charles Freund of  FLEETCOR and CFO Jill Klindt of Workiva.

Having previously held a succession of finance leadership roles inside Chicago’s ever vibrant financial services sector, Vicki Dudley was perhaps more surprised than anyone to find herself accepting a CFO position with Yancey Bros. Co. of Atlanta, the oldest Caterpillar dealer in the country.   Nevertheless, the job hop drew Dudley into a world of opportunity that she credits with having helped to open the door to her latest career chapter as CFO of TTX, the largest railcar provider in North America. “That particular experience did help to prepare me for my current role. Not only did we have sales for Caterpillar and Blue Bird bus, but also we had leasing plus repair facilities across the state of Georgia,” remarks Dudley, who gives credits to Yancey for tasking her with the company’s process improvement function “and tying it to my toolkit.” –Jack Sweeney

When Charles Freund was named CFO of FLEETCOR in 2020 – his arrival in the c-suite became the latest chapter of a varied and lengthy career journey that paralleled the rise of the $2.6 billion fintech.   Accepting a position in FLEETCOR’s corporate development department, Freund joined the firm in the year 2000 when it was generating roughly only $30 million in annual sales and struggling to manage its cash flows. “On two separate occasions, the corporate controller called me and said, ‘Charles, I know we normally pay you on a Friday, but we’re not going to make it this week. Can you wait until next week?,’” recalls Freund. In the years that followed, FLEETCOR found its strategic footing and Freund entered a succession of roles that would ultimately advance him into leadership positions overseeing FLEETCOR’s corporate strategy and global sales. What’s more, along the way FLEETCOR’s future CFO served as a general manager for the company’s developing markets. “I know and understand what’s behind the scenes more than others who haven’t had these kinds of experience. This is no knock on anyone—it’s just because I’ve lived it,” reports Freund, when asked whether he had missed out from not having pursued a more traditional finance career path. Asked to provide some insight into how his past experiences might influence his approach to the sales function, Freund explains: “I say ‘Look, I want your business to grow 10% next year.’ I then layer in my retention assumptions and other things to create a model that basically drives this performance, with what types of investments are required and so forth.” Still, Freund’s most pressing challenges as CFO are likely tied to the more than 80 acquisitions that FLEETCOR has completed over the past two decades. According to FLEETCOR’s finance chief, the fintech is embarking on a finance transformation designed to better integrate its operations around the world, beginning with the numbers. “Over the next 12 months, we’ll be implementing a new global chart of accounts. What this means is that we’ll be cleaning up the chart of accounts around the world so that we speak kind of the same language,” remarks Freund, who adds that it’s also time to replace the company’s patchwork quilt of different ERP systems—another legacy of FLEETCOR’s acquisitive past. –Jack Sweeney   Freund: First, FLEETCOR is a FinTech, so we’re a technology driven provider of financial services, but we’re not a bank. I want to make sure people know that. We’re really in what we call the spend management space. What we provide to businesses are tools to control what gets purchased by employees and what gets paid by the AP department, so you can control it on the front end by either allowing a purchase to happen or not. Or if someone has already made a purchase that’s outside of policy, I could control it on the backend with what gets paid or not. What we have found is that these smarter payment methods help our clients to spend less, they have greater insight and greater control over what’s happening. By spending less, they retain more profit. That’s the real value proposition of all of our products around the world. I’d say we are on a multi-year transformational journey over the next 12 months. A couple of things that we’re doing, we’re implementing a new global chart of accounts. We’ve grown a lot through acquisitions. FLEETCOR has done some 80, 90 acquisitions over our 20 year history. I’m cleaning up the chart of accounts around the world, so we all speak the same language, which should be helpful. We are going to implement that global planning tool this year. I’m also transitioning off of a legacy ERP system this year and have plans over the next three years to reduce the number of ERPs. Again, many of which we inherited through acquisitions, sourcing new tax software for next year. And then I’ve got four or five different HR systems. We have a plan to reduce that footprint over time. We’ll move down to about three next year and then see where we go from there, so a lot of system related things to standardize, simplify, and automate.

Jill Klindt, CFO of Workiva, shares her journey within the company and the role of talent in unlocking future growth. The podcast discusses the company's culture of humility, mentorship, and continuous improvement. It also highlights the structure of the F P and A function, the appetite for growth and strategic acquisitions, leadership during growth and change, and the significance of company culture and feedback.