This week's topic: Want To Know Your Business Better: Spend Time On The Front Lines.
It might seem strange to go from working at a nationally recognized auditing firm like PricewaterhouseCoopers to a small regional convenience store chain.
One day you’re overseeing huge audits of Fortune 100 companies, the next you’re poring over the financials of your convenience store chain, dealing with nearly 100% annual employee turnover.
But our guest on this week’s episode of CFO weekly did just that. Brent Chadwick is the CFO of Plaid Pantry, which is a chain of convenience stores in the Northwest. Upon his arrival at Plaid Pantry, Brent took the opportunity to learn from the front lines and that has made all the difference in his journey.
Getting Out of the Office & Into the Field - Know Your Business Better
While most CFOs spend their first few weeks or months in meetings, getting up to speed with the company, and reading countless pages of financial documents, Brent went a different route.
For the first few weeks as CFO, Brent spent his days in the stores. He’d get up at 5:30am to get to the store at opening, and was a shadow of the store manager for the entire day. He saw happy customers, grumpy customers, and everybody in between. It was an invaluable experience for Brent.
Why did he do it? “It was a really good experience because I got to see firsthand what our employees' days look like,” Chadwick said.
He wasn’t content to merely sit in the corporate office and try to understand what was going on. He decided that if he was going to be making decisions that impacted their employees, he needed to know exactly what they were dealing with on a day-to-day basis. What are some of the inefficiencies you might discover when you spend time on the front lines? Check down below.
Uncovering Inefficiencies From the Day-to-Day Grind
Besides realizing that he was lousy at running the cash register (his words), Brent's time in the stores did make a difference, and allowed him to make some immediate changes, and hear some employee frustrations.
First, he found out that Plaid Pantry’s 401K service provider at the time didn’t have any sort of web or mobile app. Employees had to wait until your quarterly statements came in the mail to make investment decisions. It’s something that Brent and his team wouldn’t have known had he not spent time in the stores, and was something he took action on right away.
Second, he noticed that each day the stores would print around 15 pages of reports that got sent to the corporate office via a courier. He found out that over 10 pages of the reports that were printed every day by their 110 stores were never even read or used.
This meant that in the course of a year, they were printing nearly 400,000 sheets of paper needlessly. A drain on resources, knowing this information allowed Brent to change the process for the better, eliminating wasted time and money.
“We were basically printing 400,000 sheets of paper with the associated costs of the toner and you know, wear and tear and the printers that were basically not being used at all,” Chadwick said.
The third thing he noticed was around coupons. He found out they were spending $20,000 a year on insurance to ship these coupon boxes, roughly $400 per box of coupons, even though the insurance company would only cover $100 worth if the coupon box was lost.
So $20,000 to receive a maximum of $5,000 worth of replacement? It certainly didn’t seem like a good use of resources to Brent. Yet again, another thing that he never would’ve known had he not spent time on the front lines in the stores.
Taking Action On Lessons Learned on the Front Lines
After his initial foray into the retail world through in-person shadowing, Brent was ready to take his findings into the C-suite and improve things for the better. He was able to make adjustments to everything from a 20-year-old IT system to streamlining the accounting process, saving up to the company hundreds of thousands.
He took a look at everything the company was paying for and understood what was needed and what wasn't. For example, he removed their asset-baseline of credit and replaced it with a traditional revolver saving dollars and resources, eliminating wasted time and inefficiencies.
His improvements didn't stop there, even going as far as replacing their audit firm (incidentally his previous employer) to save on costs. Knowing Plaid Pantry didn't need to the same scale available in a Big 4 accounting firm, he went with a smaller, regional company.
By taking the lessons he learned out in his stores, Brent was able to make data-driven decisions, remove inefficiencies, know his business better, and succeed as a CFO in a brand new industry.
Brent's biggest advice? Knowing that 99% of the businesses have under 500 employees, take the time to understand how your transactions originated across the entire process.
For more interviews from the CFO Weekly podcast, check us out on Apple or Spotify or your favorite podcast player. Looking for more accounting podcasts? Check out this top CFO podcast list from Feedspot.