CFO THOUGHT LEADER

It was October 2019. Red Hat, Inc., was preparing to submit its latest quarterly results to its new parent, IBM Corp., and Laurie Krebs had just been named Red Hat software’s new CFO. As a senior vice president of finance for Red Hat, Krebs had worked closely with the former CFO and more or less assumed that the acquiring company would likely prefer to fill C-suite spots from its “home team” talent bench of senior executives. In fact, Krebs says that during the course of her career she had never truly aspired to be a CFO: “I often wondered who would want all of that responsibility, especially after Sarbanes-Oxley came in. And then, at the time, I realized that IBM had just acquired us for $34 billion and that it was going to be up to us to deliver the results that were needed.”   Krebs says that the finance team at Red Hat, like many executive teams within newly acquired companies, had experienced some attrition and was perhaps not as highly functioning as it had been prior to its acquisition.   As the first quarterly close for the newly acquired Red Hat approached, Krebs sought to reassure her CEO that she would continue to lead the team. “I’ll help you out until you get a legit CFO,” Krebs recalls saying—to which her CEO replied: “No, no, no—we want you to be it.” The CEO then reassured Krebs that it had been a unanimous opinion across Red Hat’s and IBM’s leadership teams that she should become Red Hat’s next CFO. Still, the pressure was on, and Krebs had to not only deliver the company’s first post-acquisition quarterly results but also activate the collaborative processes required to satisfy a giant parent company.   “I did what I always do. I surrounded myself with the right talent and strong skillsets and created a team out of it,” comments Krebs, who says that her team today includes a seasoned “IBM finance partner” now tasked as sort of a go-between and translator for Red Hat and its parent. Echoing the executive’s words, Krebs relays his guidance: “Here are the deliverables that IBM’s looking for. Here’s why they look for them. When they ask for this, this is typically what CFO’s look for.” Krebs adds: “He has been what I call a ‘gift’ on our team." - Jack Sweeney  SUBSCRIBE

When Ray Carpenter retraces his steps to the CFO office at Xandr—an analytics and advertising company formed by AT&T’s WarnerMedia—he singles out two earlier roles as having been outside AT&T’s traditional finance track. “I actually got kicked out of finance for one role,” says Carpenter, referring to a stint as a marketer inside a start-up launched by AT&T’s emerging business markets group. “We did things that were uniquely different from what AT&T typically does when it launches a new business,” continues Carpenter, who in addition to marketing was responsible for the start-up’s pricing strategy.    Next, Carpenter joined AT&T’s mergers integration group, where he helped to lead integration planning efforts for different corporate functions, a role that made him keenly aware of the integration challenges such future acquisitions as DirectTV would present. From his stint in the mergers group, Carpenter stepped back inside AT&T’s more traditional finance and accounting ranks and was soon named CFO of its Entertainment and Internet Services division. “It wasn’t a forgone conclusion and still never is. AT&T has a habit of moving people around,” explains Carpenter, who mentions a number of different functional areas recently led by executives who in the past had held traditional finance roles. Says Carpenter: “I always knew that I’d be close to numbers, data, and analytics, and I felt that this would typically put me in the finance camp, but I wasn’t surprised when other opportunities surfaced.” –Jack Sweeney

Not unlike the careers of his finance leader peers, the finance career of Dave Jones, CFO of online car seller Vroom, has been shaped and influenced by economic crises of the past two decades. Last month, as the initial shock of the coronavirus waned and the stock market rallied back, Vroom moved quickly to go public. Explains Jones: “We consulted with our board and our investors and decided that the time was right.” After pricing its IPO shares at $22, Vroom saw their value more than double on their first day of trading. This was not the first time that Jones had discovered a window of opportunity in less-than-friendly economic times. Back in 2002, he had found himself in a tight spot while serving as a senior manager for Andersen, the historic accounting house that collapsed in the wake of the Enron scandal of the early 2000s. “The view at the beginning of crisis was that there was no way that Andersen would be taken down. For me, the lesson became to never say ‘never,’” says Jones, who adroitly stepped from the ashes of the once esteemed accounting house into a financial reporting role at Penske Automotive Group, where he entered the CFO office roughly 8 years later, in 2011. “I think that Penske was a $2 billion or $3 billion business when I first got there, and it was an $18 billion business when I left,” recalls Jones, who prior to entering the CFO office at Penske in 2011 had served as CFO of Penske’s European operations and consequently weathered yet another economic storm.  Back in 2008, Penske CEO Roger Penske had described the subprime mortgage crisis as “one of the most challenging periods on record in the automotive industry.” The automotive company would post its first quarterly loss in a decade and painful personnel cuts followed, but for future finance leader Jones, along with professional scar tissue would come valuable lessons for the future. - Jack Sweeney   Sign up for our newsletter

Dennis McGrath was only recently married and a new home owner when he was invited to a Phillies game by the CFO of AC Manufacturing. At the time, McGrath was working for Andersen as an auditor of a roster of growing companies, among which AC—a maker of industrial air-conditioning units—was perhaps not the most glamorous. “At the end of the night, the CFO told me that he wanted to hire me and would pay me a lot more than I was then making,” recalls McGrath, who doesn’t hesitate to reveal what allowed AC’s offer to trump all other opportunities. Says McGrath: “I went for the money.” However, what distinguished McGrath’s AC career chapter was neither compensation nor, for that matter, a lengthy tenure (McGrath was controller for 22 months). Adds McGrath: “It was not too long before the owner decided that he was going to sell the company and had a private equity group come in.”   Still in his mid-20s, McGrath took a seat across the table from a seasoned group of private equity executives. “For me, my career has just kind of been perpetuated from there in terms of deal-making,” explains McGrath, who has arguably occupied “the seat” from that day forward, guaranteeing  a CFO career chock full of M&A deal-making.  –Jack Sweeney

When asked to share a few of the experiences that he feels prepared him for a CFO role, Ashim Gupta recalls what he characterizes as a significant accounting problem. However, it was not the nature of the accounting snag that Gupta wants us to know about but instead how his initial response to the problem was somewhat clumsy and ineffective. The event occurred more than 10 years into his finance career and did not lengthen the path to his next promotion because he had only just arrived in a new role as a divisional CFO for GE Water, a General Electric Corp. operating unit specializing in water processing solutions. Gupta remembers the accounting problem as being “the first thing to pass across my desk.” Realizing the gravity of the challenge, Gupta picked up the phone and called the more senior finance leader who was responsible for a wide swath of GE businesses, including Gupta’s group. “I was nervous about it, and I did not articulate the issue in the way that I should have. I didn’t really treat it as a business issue. I almost treated it with some amount of fear,” explains Gupta, who says that the uncomfortable phone call later led him to reach out to a mentor. “He said to me, ‘Your job is to help the business face reality,’” recalls Gupta, remembering the words of his mentor. In short, the mentor told him that the senior finance leader wanted facts and not fear. “I had to learn through trial by fire, and I failed the first time,” admits Gupta, who believes that finance executives must be keenly aware of the facts when delivering bad news and seek to expose possible avenues to where a solution can potentially take root. Says Gupta: “You have to demonstrate that you are now a partner in navigating through whatever the problem may be.”

In the mid-1990s, when Jeff Epstein was busy satisfying the M&A appetites of media clients for First Boston, one of his smaller, but more boisterous clients asked him to join the firm as its CFO.   “It was the type of situation where if they had gone to a recruiter, I would never have made the resume cut because I had never been a CFO and I had never even worked for a CFO,” explains Epstein, who was 32 when he entered the lively entrepreneurial realm known as King World Productions. A one-time family-owned company, King World had seen its stature grow inside New York’s competitive media landscape as the firm began producing  giant hit TV shows such as Wheel of Fortune, Jeopardy and The Oprah Winfrey Show.  “It was actually a small company with only about 300 employees, but they had three of the highest-rated, most profitable shows on television, with about $300 million of revenue and $60 million of operating income,” recalls Epstein, who would go on to add consecutive CFO career chapters at DoubleClick, Nielsen (Media Measurement), and Oracle Corp., a mix that fortified his footing in both the tech and media worlds—but also revealed little preference when it came to company size. “King World had been a family business that had only recently become a New York Stock Exchange company when I joined them, so I had to put in place some basic procedures, but Oracle had been around for many years and already had very sophisticated processes,” notes Epstein, who today exudes as much enthusiasm for Oracle’s approach to simplifying and standardizing its internal processes as he does for the entrepreneurial instincts of King World chairman Roger King. “Three minutes from when an idea came out of my mouth, Roger King would have picked up the phone and be pitching our largest customer, ” says Epstein, whose CFO tenure there lasted 6 years—a span of time during which King World would triple its value and ultimately end up being sold to CBS Corp. It was following the sale of King World, that Epstein would open the career chapter that permitted his CFO career  to grow beyond a single industry.      “DoubleClick was an early Internet advertising technology company and wanted a CFO from either media or technology, so I had the media experience part,” comments Epstein. Today, as operating partner for Bessemer Venture Partners of Menlo Park, Calif., Epstein marvels at the continued evolution of the two industries that shaped his CFO career: “Two years ago, global Internet advertising surpassed global television advertising revenues to become the biggest media opportunity in the world—so if you’re around long enough, you see some incredible things.”   Sign Up for our Newsletter  

When asked what led him to open his latest career chapter as CFO of Biofourmis, Matt Borowiecki quickly mentions the 2018 sale of MassMutual Asia Ltd. to Yunfeng FG. After helping to piece together a string of strategic plays for MassMutual, Borowiecki was instrumental in effecting the Yunfeng FG deal, which was a standout for him personally as well as one that many industry analysts at the time deemed transformational for company. Having helped to spearhead the transaction, Borowiecki was subsequently asked to relocate to Hong Kong and lead international strategy and corporate development for the company. With his deal-making realm vastly expanded, Borowiecki might have been expected to rocket down MassMutual’s transformational M&A track for several more years.    However, the move to Hong Kong challenged him in ways that he had not necessarily anticipated. Seeking to discover new strategies for MassMutual to extend its reach in the region, Borowiecki frequently found himself in meetings with local Hong Kong venture capitalists and private equity firms. “I really started to understand the power of data science and how insuretech, fintech, and healthtech really were transforming,” explains Borowiecki, who found his career ambitions evolving and coalescing around the broader notion of making an impact on industries at large. Knowing that his M&A experience would serve him well inside the start-up realm, he soon saw a new career chapter come into focus. “Quite candidly, the exposure that I had to very different consumer patterns and thinking about health and wealth in different ways piqued my interest in the Biofourmis platform,” explains Borowiecki, who adds that the basic premise of Biofourmis is to enable patients to compare their own physiological signals to metadata from a vastly larger population pool in real time. Says Borowiecki: “We call them ‘Biovitals’—they’re effectively a real-time picture designed to help clinicians to predict and prevent serious medical events. For example, heart failure is one of our focuses.” It seems that as one career chapter closed for Borowiecki, yet another opened. –Jack Sweeney

Early in his finance career, Anders Fohlin discovered that he could ratchet up his capacity to consume information and problem-solve simply by drawing pictures. However, what had originated more as a personal observation would eventually evolve to something more as he discovered that his visuals could serve others.   “I started to regularly draw processes on white boards and paper to make things very visual for everybody and help others to get the full picture,” explains Fohlin, whose knack for creating visuals and goal of making things more visible “for everybody” led him to begin viewing routine meetings as opportunities for visualization. Says Fohlin: “I found that process maps and gathering people in the same room was a really good way to spark energy and collaboration and have people feel that they were important and doing something more than just shoveling coal.”    Fohlin adds that his early efforts to create greater collaboration and inclusion ended up opening the door for him to various senior finance roles and eventually led him to the CFO office at software developer Medius. Among the guiding principles that Fohlin says have influenced his leadership style and approach over time is the notion of transparency. Ten years ago, while a senior finance executive at NASDAQ, he participated in a series of meetings to discuss the adoption of an activity-based costing model. “We would sit around the table and go product by product to explore ways in which we could improve,” he recalls, “and this was done with representatives from all of the different functions.” Part of the approach involved sharing numbers more widely across the organization and downward to the workforce at large. “If each employee can see the overall picture and what aligns their daily activities with the strategy and vision of the company, then they make better decisions,” explains Fohlin, who adds that today—as a CFO—he’s still drawing pictures. –Jack Sweeney

Back in the mid-1990s, David Wells was a financial analyst for a Bay Area supply chain management company that boasted an impressive list of Silicon Valley marquee customers. Counted among their clients was a large chip maker whose customer relationship upkeep had over time become Wells’s responsibility. Because this was a coveted customer, Wells always sought to be highly responsive to any of the chip maker’s requests for information, but he increasingly found his company’s pricing model out of step with the customer’s needs. “There was a lot of confusion and a lot frustration over what the prices for our services and products should be. Basically, we needed a much more sophisticated pricing model that the customer would accept,” recalls Wells. Faced with growing customer unrest, Wells and a colleague created a new pricing model that was carefully tailored for the chip maker’s business. Says Wells: “It was very intricate and more specific, but it was modeled exactly the way the customer saw their business.” The customer quickly gave the new model a thumbs-up, and all was well—until roughly 4 months later, when Wells realized that the new model was about to deliver to his company a windfall that would generate 4 to 5 months of revenue within only 6 weeks. “When I saw what was happening, I went to the customer and said, ‘Listen, this model that we built … there’s kind of a flaw in it. It’s a flaw in our favor, but we didn’t intend for this to happen and we don’t want you to view us as being unethical,’” recalls Wells. To Wells’s surprise, the chip maker was not concerned about the imminent financial swell of its purchases. It was instead highly pleased to have had a model created specifically with its needs and requirements in mind.   “What this taught me was that as a CFO you’ve got to understand the customer and you’ve got to understand your business,” explains Wells, who believes that finance chiefs must first have visibility into customer engagements to better understand the inner workings of relationships with them.    He continues: “If you can distill it down into tools that will then quantify the activity, then as CFO you’ll be in perfect shape to make the right decisions both for the customer and for your company.” –Jack Sweeney

Jon Nguyen got his first taste of M&A-related work in the early to mid-2000s when he served as the finance partner for the auto lending unit of HSBC. “In consumer lending, you end up doing a lot of portfolio purchases rather than equity ones, but I have become more involved in the execution of deals over the past 8 years,” says Nguyen, who, distinguishes the past 8 years as a standout chapter -one that has allowed him to certify his M&A credentials and enter the CFO office at Kyriba. Turn back the clock 8 years, and Nguyen is vice president of finance for Mitchell International, a $600 million software and service business. As the company’s FP&A leader, Nguyen was tasked with supplying key insights to management decision-making behind the sale of Mitchell to KKR in 2013. Meanwhile, 5 years later, Nguyen was once more in the M&A diligence mix when KKR sold Mitchell to Stone Point Capital. Along the way, Nguyen’s M&A resume quickly expanded. “At Mitchell, we were very acquisitive, and during my tenure there, we acquired 12 to 15 companies,” says Nguyen, who frequently became charged with leading the integration of Mitchell’s latest bounty. In mid-2018, following the sale of Mitchell to Stone Point, Nguyen joined cloud treasury and finance solutions company Kyriba as senior vice president of FP&A. Roughly a year later, he was named Kyriba’s CFO—a development that came on the heels of Kyriba’s sale to private equity firm BridgePoint. There’s little question that Nguyen’s latest career chapter has a familiar ring to it and is perhaps part of a larger M&A volume that he first started creating 8 years ago. Says Nguyen: “It’s interesting how life can take you where you belong.” - Jack Sweeney