CFO THOUGHT LEADER

It’s a phrase that has historically never roamed far beyond the corridors of pharmaceutical companies, but now—thanks to COVID 19—the term “clinical trials” has entered the vocabulary of the public at large. Perhaps at no time in history have the “trials” that pharma companies use to generate data on the safety of a particular drug, vaccine, or treatment been as heavily scrutinized—and at no previous time has CFO Manmeet Soni of Reata Pharmaceuticals believed that the processes and approaches that govern Reata’s “trial design” have been more ripe for innovation. “Our learnings from the past 9 months are going to influence how we operate for the next 90 years,” explains Soni, who says that these learnings were put into motion last spring as COVID’s arrival shut down trials and began curtailing Reata’s data flows. “That’s when we began asking: ‘Why can’t we do trials in a way similar to how home health services are provided? Why don’t we deliver the drug to the patient’s home?’” recalls Soni, who says that serving the company as both CFO as well COO allowed him to be more hands-on when it came time to tweak Reata’s “trial design” and the daily activities performed to keep trials on track. “There will always be certain trials that will have to be completed at the lab, but the pandemic has allowed us to regularly consider how things can be done differently,” adds Soni, who believes that today’s impulse to regularly reconsider current methods and approaches is the biggest change to yesterday’s business as usual.  –Jack Sweeney Leave rating & review  Exclusive Content & More @ CFOTHOUGHTLEADER.COM  Signup for our Newsletter

Among the experiences that Rob Barnhart credits with having prepared him for a CFO role was an executive training program in which he participated when he served as director of FP&A for defense contractor BAE Systems. Known as LEAD, or Leadership Enhancement Accelerated Development, the program put a spotlight not on technical knowledge or management best practices but on each participant’s soft skills, Barnhart recalls. “There were literally clinical psychologists sitting in on meetings who would later reflect on your behavior and give you advice on how you could have been a more effective communicator,” says Barnhart, who also credits one of his own earlier talent development efforts with helping him to advance down the CFO path. At the time, Barnhart was heading FP&A at Fanatics, a company specializing in sports merchandising, “The question became: How can I make sure that I don’t have to level up or bring new people in and put them over people as the challenges get more daunting?,” explains Barnhart, who notes that at the time, Fanatics was evolving from a single e-commerce site to a multichannel global business. “There were people whom I brought in as analysts who today are directors and VPs in the business—this happened during my tenure, so I’m really happy about that,” remarks Barnhart. –Jack Sweeney  Leave rating & review  Exclusive Content & More @ CFOTHOUGHTLEADER.COM  Signup for our Newsletter

Back in 2015, when Gary Swidler was a candidate for a CFO position at Match Group, the seasoned banking executive recalls being told by company management: “On paper, you are definitely not the most qualified person for the job.” The gap on Swidler’s resume was due to the fact that he had never held a CFO position—a void that frustrates many first-time CFO candidates who routinely find themselves second in line to candidates whose resumes list previous CFO appointments. Perhaps frustrated CFO candidates might find some comfort in the notion that Match, a company whose online offerings excel at achieving “matches”—albeit romantic ones—chose to discard industry’s traditional CFO matching criteria. According to Swidler, the CEO remarked: “‘You’ve never done this before, but I’ve known you for a long time and you have very good judgment. You’re a smart person with high integrity, so don’t prove me wrong.” Swidler’s comments expose the roles that intuition and instincts often play when it comes to CFO hiring. They also draw our attention to the type of partner that Match management was seeking: not a blind follower or “yes man,” but someone upon whose counsel the CEO and a board could rely. Meanwhile, as a banker, Swidler’s relationship with his future company had gone back not months but years, giving him an edge over veteran CFOs who were less familiar with Match as well as IAC, the holding company that at the time owned 100 percent of the online dating company. However, within 2 months of Swidler’s arrival in Match’s CFO office, IAC sold 15 percent of its shares to the public, allowing Match to raise a little more than $400 million and giving the company a market cap of around $3 billion. In the coming months and years, more IAC shares were expected to be sold to the public, which would allow Match Group to becoming increasingly unfettered from its largest investor. Still, IAC was evidently not yet ready to part with its 85 percent and opted to hold on to its shares until this past June, when it completed a spinoff of Match Group by selling its shares to IAC’s existing shareholders and thereby giving Match a market cap of $30 billion. “We had such a good business, and we were doing so well—IAC enjoyed owning us and didn’t want to give us up,” says Swidler, who would likely not hesitate to tell us that when it comes to large investors, breaking up is hard to do.   – Jack Sweeney Leave rating & review  Exclusive Content & More @ CFOTHOUGHTLEADER.COM  Signup for our Newsletter

We have been speaking with Hoang Vuong for little more than a minute when he mentions the CFO mentor whom he credits with having influenced his early career decisions. “Hey, what do you really want to do when you grow up?” was the question that Vuong remembers being asked by the CFO, who had gotten to know Vuong personally while the young techie had served as an IT troubleshooter for his company’s ambitious SAP implementation. Fast-forward a few years, and the same CFO introduces Vuong to the management of an early-stage Internet search firm in the travel space, known as SideStep. Vuong joins the young company and subsequently focuses his troubleshooting skills on the firm’s mounting growth obstacles. “I had started reading a bunch of blogs where I began learning about this little company called Google and the interesting things that they did,” recalls Vuong, who says that he quickly began to grasp how Google offerings could help SideStep to address some of its nagging growth challenges. In fact, Vuong was so convinced that Google offerings would unlock new growth for SideStep that he ignored the doubts being flung about by his management peers, negotiated a contract with Google’s bus dev team, and presented it to SideStep’s CEO. Vuong says that the CEO responded by asking: “Are you so sure about this decision that you would risk your career on it?” At the time, Vuong says, he felt that careerwise he had little to lose—and besides, the Google offerings were pretty impressive.    “Google was just getting started, so at the time they would provide search results on the portals of other companies and do a rev share,” explains Vuong, who says that SideStep’s monthly revenues quickly ballooned from $50,000 to $1 million.    Having successfully addressed one of SideStep’s most formidable growth hurdles, Vuong saw his responsibilities at Side Step grow over time to include sales, online marketing, operations, and, of course, finance—where he served in the first of his several CFO roles. –Jack Sweeney Leave rating & review  Exclusive Content & More @ CFOTHOUGHTLEADER.COM  Signup for our Newsletter

When innovation is a topic for discussion, Dynshaw Italia can’t resist mentioning Cobra Beer—or, to be more specific, “the big bottle.” It was Cobra, of course, that first opted to forgo the UK’s standard 500–550 ml beer bottles and introduce an ever more generously proportioned 650 ml vessel. “Cobra was all about doing things differently and better and, as a result, changing the marketplace,” explains Italia, who recalls that Cobra’s big bottle strategic insight had to do with the willingness of UK diners to share their oversize beverage with others at their table.   “Because they were sharing the bottle, it would be kept on the table. As a result, customers entering the restaurant would see all these tables having a bottle of Cobra, and it was like free advertising,” continues Italia, who served as group CFO for the popular UK beer brand from 2003 to 2010 as it continued to flummox its beer rivals by touting the brew’s premium recipe while outsourcing the actual brewing and distribution processes. “Cobra was about creating a premium brand with high gross margins that would eventually fit inside a larger brewery portfolio—one that had their own production and own distribution,” notes Italia, who credits Cobra’s culture of innovation with having routinely led him to explore creative ways to generate working capital. “I learned that every single asset on your balance sheet could create and generate cash for working capital, whether it was stock or debt—you could even get financing against your rent deposit,” remarks Italia, whose working capital resourcefulness proved to be a good match for Cobra’s entrepreneurial founders. In the end, Cobra’s appetite for growth (and escalating debt) led its founders to seek deeper pockets, so in 2011 Cobra Beer Partnership Limited was formed as a joint venture with Molson Coors—which allowed the Cobra brand to achieve a “fit” inside a larger brewery’s portfolio. –Jack Sweeney Leave rating & review  Exclusive Content & More @ CFOTHOUGHTLEADER.COM  Signup for our Newsletter

Inside the realm of corporate finance, it’s safe to say that the year 2020 has been unlike any that have preceded it. As more employees have occupied remote workspaces, growing numbers of finance chiefs have told us that they are more carefully monitoring the financial and cultural levers that influence workforce behaviors.  

Thinking back to his days as a charter boat captain off the coast of Point Loma, San Diego, Dan Stokely marvels at the responsibilities that he shouldered as a young adult. Serving a mix of customers, Stokely would routinely welcome on board groups of small business owners, executives, and doctors before setting off to sea on 3- to 15-day jaunts. “Whether it was dealing with people experiencing some kind of medical emergency at sea, or really rough weather, or mechanical failures—you just had to be on top of your game all the time,” recalls Stokely, who says that the experience forever shaped his mind-set when it comes to taking on challenges.   Initially, Stokely had set his sights on acquiring equity in a boat, but conversations with different customers piqued his interest in business and led him to begin a college career alongside his sea captain vocation. Upon graduation, Stokely feared that the lack of an accounting internship on his oceangoing resume might lessen the odds of him landing a job with a big-name accounting house.    However, Stokely says, the partner in charge of Deloitte’s San Diego office at the time hired him after summing up the college grad’s seafaring days this way: “You had to make quick decisions, and very often with not a lot of information. And you had to live with the outcome.” Another factor that no doubt contributed to Stokely quickly finding his groove in the accounting and finance realm was that he was accustomed to having gray-haired customers turning to him for answers, a qualification that few hiring officers would likely miss. Such conditioning perhaps served him well at Sithe Energies, where he was hired as a financial analyst inside one of the firm’s divisions but within weeks found himself working alongside the company’s CFO as they mapped out an aggressive acquisition strategy involving the medical waste industry. This led to Stokely crisscrossing the county to meet and consult with the owners of different medical waste firms being targeted.    Says Stokely: “This might have scared a lot of people. But with my fishing background and having taken some risks before, I knew how to manage it.” As it turned out, the company would acquire nearly 12 new firms over a 3-year period and reformulate its division known as Recovery Corp. of America. –Jack Sweeney    Signup for our Newsletter  

Back in 2018—when Deb Ricci’s name topped the list of leading candidates to fill the CFO role at Guidehouse, a management consulting firm carve-out—three career distinctions likely set her apart from other candidates. First, Ricci was a veteran public sector executive whose finance resume included multiple chapters inside the government services sector, Guidehouse’s home turf. Second, she had worked inside private equity–backed companies—experience that few recruiters could ignore in light of Guidehouse being the offspring of private equity firm Veritas Capital. Third, she had an EBITDA mind-set—an unyielding orientation that allowed Ricci’s lines of sight to seldom stray very far from the metrics that helped to track, measure, and deliver EBITDA.  Of course, it is just such a mind-set that has likely kept Ricci’s finance leadership credentials on the radar of private equity partners. To date, she has played senior finance roles inside four private equity–backed firms. “I know what they’re looking for. Often I think like they think. And I find that the objectives that they’re looking to achieve are the same ones that I look to achieve,” explains Ricci. Since Veritas first acquired the public sector practice of PricewaterhouseCoopers in 2018 and rebranded it as Guidehouse, the professional services firm has made headlines with its acquisition of Navigant Consulting in October of 2019, a deal that expanded Guidehouse’s workforce from 2,000 to 7,000 and planted a trove of commercial clients inside Guidehouse’s customer portfolio. What’s more, the Navigant organization brought along two-decade–old processes and practices, whereas the Guidehouse organization had still been mapping out its internal approaches and practices.   “We were receptive to adopting some established practices, while on the Navigant side I think that they were very accepting of change—so for me, this was the most successful acquisition that I’ve ever been associated with,” remarks Ricci. –Jack Sweeney     

  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 Signup for our Newsletter

When Tupperware Brands CFO Sandra Harris is asked what set her apart from the other CFO candidates who aspired to fill the finance leadership role at the iconic maker of food storage products, she doesn’t hesitate to mention that her previous leadership turn was not as a CFO, but as chief information officer for outdoor apparel and footwear manufacturer VF Corporation. It was there where Harris first climbed into the company’s leadership ranks from VF’s FP&A function, where she had become increasingly focused on the company’s quickly evolving global supply chain.   “VF was on a trajectory of going from $6 billion to $12 billion, and in order to do this, they needed to optimize their supply chain,” explains Harris, who along the way found herself overseeing VF’s procurement function—a position that made her the direct report for VF’s sourcing for all of Asia. “Asia was one of our most complex businesses—it had every kind of retail channel, and it was because of my Asia experience that I was given more financial roles in the retail segment of the business as well as VF’s shared services,” recalls Harris, who credits her retail experience with having helped her to emerge as CIO and IT leader as she helped the company to forge a digital connection with its consumers. At Tupperware, Harris has made “innovation through technology” a central theme of her 20-month CFO tenure. “Until I arrived, we were really still taking orders by hand and using fax machines,” comments Harris, who says that the company’s rapid adoption of cloud-based tools and solutions paid big dividends in 2020 when, due to the pandemic, increasing numbers of consumers went looking for food safety and storage products as the number of home-cooked meals grew. “We knew that we had to think more about the consumer and create a supply chain that could support what Amazon brought to the world, which was 2-day delivery,” adds Harris, who credits Tupperware’s technology investment with helping the company to pivot to a more digital world. –Jack Sweeney Signup for our Newsletter