How Technology Influences the Modern CFO

January 26, 2023 Mimi Torrington

CFO using the right technology to assess company's finances

The role of the contemporary Chief Financial Officer (CFO) is one of the most important functions in any organization. In today's ever-changing business environment, CFOs need to possess a unique set of skills and abilities that will enable them to effectively lead their organizations through times of uncertainty. For that reason, Dan Fletcher joins the show to share what these skills are, along with some tips for the modern CFO looking to improve technology within his/her organization.

Dan is the CFO of Planful, an FP&A platform that empowers businesses to plan confidently, close faster, and report accurately. He is a C-suite executive investor and board member with deep experience in high-growth SaaS companies. Dan also serves as an Advisory Board Member at Gappify and is a Certified Public Accountant.

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Welcome back to CFO Weekly, where we're talking with financial leaders about how to build efficiency in their teams, create time for strategy, and ultimately get results with your host, Megan Wiese. Let's jump right in today.

Megan - 00:00:31: My guest is Dan Fletcher. Dan is the CFO of planful. The platform empowers businesses to plan confidently, close faster, and report accurately. Dan is a C-suite executive, investor, and board member with deep experience in high-growth SaaS companies. Dan also serves on the board of directors for Gappify. Dan, thank you very much for joining me on this episode of CFO Weekly.

Dan - 00:00:57: Megan, thanks for having me.

Megan - 00:00:58: Yeah, I'm looking forward to learning about you and your story today and hearing about your experience as a finance leader. And we've got a lot to cover, so let's get started.

That sounds good to me first, and as always, let's start with you and your story and how it is that you got to where you are today.

Dan - 00:01:16: So maybe we start at the end. So I am CFO of a high-growth software company called Plan Full that makes software for anyone doing planning and reporting throughout the organization, from marketing to HR, but especially for finance and accounting, where we got our start. So think of me as a tech CFO today, but it looked very different at the start of my career. And I think the theme if I reflect on my career, is just two big Pivots. And we can tug on those threads as much as helpful. But I started my career, and I think you and I are both PWC alum.

Megan - 00:01:53: I was there for a bit early in my career.

Dan - 00:01:56: Hey, it still counts. So I started my career at PWC, actually, right into the teeth of the global recession, which was interesting. And I was working as an auditor in assurance services at PwC on several of the big financial institutions in the Chicago area. And so that was just baptism by fire. And many folks auditing is a great career. Many folks will use that career as well as a launchpad sort of graduate with that accounting degree and then learn a bunch about a bunch of different businesses and then find themselves. And so that's what I did. I pivoted to investing, which I did in the private equity world for about four years after that, and then once again had to follow my passion for operating businesses. And so it was just a product of being a 20-something learning every single day, and I'm still learning every single day at this stage if we're honest, but learning every single day, what resonates the most with me and then taking some chances to put myself in a position to be doing that work?

Megan - 00:03:00: How did you make that pivot? From auditing to investment. Did that require, like, an MBA or how did you do that?

Dan - 00:03:09: That's probably the more interesting pivot. But folks who are in the private equity world running models as an associate will also recognize that it is a big leap to go from being a deal associate to being a CFO, for example. So we can talk through both those Pivots. The fun part about it, Megan, is they're both very different, but they touch on two big learnings for me. So the two things that I think will allow someone in any career to make a career Pivot are relationships. Number one, which is no surprise to anybody listening to this podcast, and number two is just absolute perseverance. And then we'll get to that in the second Pivot. But the first pivot was relationships. So what I mean by that is not just the classic networking being on LinkedIn, going to little social events for the local Chartered Accountant Group or the local marketing professionals group, but actual personal relationships out in the world and sort of 10, 20X the number that you would normally have. What I mean by that is not to hoard relationships, but just be open to them. So I was able to make this pivot into investing in my sort of review mirror predominantly because I was in a Thursday night basketball league, which sounds ridiculous, but after playing for several months with the same group of folks and getting to know each other. And sports have a way of accelerating that. By the way, both the ease of the relationship and the trust in the relationship. But I found out that they were searching for a role. They found out a bit about my background and were willing to take a chance on me. And it was that simple.

Megan - 00:04:54: Wow.

Dan - 00:04:54: So the second pivot was really about perseverance. So I tell this story to my own teams. I'm a two-time CFO now, and on both teams, I've told this story as sort of a lesson I learned, right? Take from it what you will, but when I was operating sort of the P models, I don't know the nature of the audience of your podcast, but Private Equity Association is predominantly doing diligence and running valuation and deal models. And it's a very can be a bit of a lonely exercise with Excel. You and Excel are sort of dating, so to speak, and great experience, though. But this is not a private equity podcast. But the one thing you're not doing is you're not running teams, certainly. And you're not running businesses, certainly. And so making that leap was tricky. I asked my firm after my classic two-year role, if would they be willing to stick me on their operating team, which is there's an investment team and an operating team in private equity firms. And the operating team is one step closer to running businesses like executives. And they were kind about it, but they essentially laughed at me and said, listen, Dan, we like you and this is what we like about you, that you have this confidence, but you absolutely know nothing about running businesses. And furthermore, you would not hold water for 1 second on an executive team in a business with the other executives. And of course, Megan, they were right. And so the journey from there required a four-and-a-half-year stop in consulting to do both consulting projects, but more importantly, to do interim management roles, starting with the humble, not necessarily the humble, but the director and the VP level role, and then slowly working my way up to the C Suite.

Megan - 00:06:40: Wow, that's an amazing career right there. Where were your consultants?

Dan - 00:06:46: Alvarez and Marsal.

Megan - 00:06:48: Okay, yeah. They take on a lot of turnarounds, right? Is that correct?

Dan - 00:06:53: They do. That's their DNA, and it's probably what they're still best known for. The group that I was in and say hi to any A and M folks in Peppy listening is named Peppy, Private Equity Performance Improvement, which is a great catchy acronym, better than most acronyms. And what Peppy does. There are many disciplines within Peppy, but one specific discipline that I sat in is this interim management practice with sub practice, you might call it, which, when a private equity firm goes and invests in a business, they often show up on day one after close with a 100-day plan. Or they need a 100-day plan, but they may not have all the right butts and the right seats on the management team. Some of the management may have made good money in the exit and maybe onto their next thing, some other management might not buy into the go-forward. And there are holes on that management team. And one of the things that A and M has learned to do is grab good athletes who can sit in those roles and execute the vision of the new board, which is the PE, but also bond with the team and be in the trenches when the bullets are flying with the existing management team. And that's a very hard needle to thread to be able to win the trust of both groups.

Megan- 00:08:07: And as you mentioned today, you're a CFO at a company that helps CFOs manage financial performance, Planful. So, first of all, do you use your own software?

Dan - 00:08:17: Of course, we run our business on Planful. And I'll tell you what, we got a screaming deal, as you might expect, on the software at zero dollar price tag, which I love as CFO.

Megan - 00:08:28: Talk to me about the product.

Dan - 00:08:30: Planful is for anybody doing financial and operational planning and reporting anywhere in the business. And that's an evolution. The company started out in the kind of mid-2010, early 2010, with specific folks at the office of the CFO. So think of classic FP&A and accounting processes. And that would be financial consolidation, month end, close reporting, and then two different types of planning. One would be structured planning. So you're a finance professional, Megan, you get this. But some planning is best done in a grid. And that would be things like headcount and OpEx and Capex where you've got names or general ledger counts down the Y-axis and across the top X-axis you've got time. And that way of structured looking at planning is very financed centric and very helpful. But there's also dynamic planning, which is the final legacy I don't want to call it legacy. My CEO hates when I say that. But the final plan for the core use case is modeling. So building a sales capacity. Model or an SKU level demand forecast or a commission's calculation module. And so planful historically offered that record to report, which was consolidation reporting and your planning and budgeting use cases with the two different types of planning. And more recently in the last five years and many other vendors in the space have done this as well, plans will recognize that planning and specifically planning with numbers happens everywhere in an organization but it doesn't always happen in general ledger level structures. And so in marketing, we just did an acquisition of a marketing planning company. In marketing, they're planning campaigns and programs and allocating funds against those campaigns, and tracking the results very differently in leads and net new names. And in HR, they're planning in headcount and recruiting metrics, and retention metrics. And in IT, they're planning in projects. And so the idea is that planful should be the planning tool for the entire and some areas of were much more mature like marketing and IT and HR and other areas were still more unstructured planning like the modeling I talked about.

Megan - 00:10:42: And we all know that technology is becoming increasingly important to being a high-performing CFO and notoriously finance and accounting has been slow to embrace new technology. So talk to me about whether or not you're seeing CFOs that are still resistant to adopting technology and how you're getting them to accept your product.

Dan - 00:11:08: This is a fun word, but I'm going to turn it around on you. You are an award-winning podcast host who speaks to many CFOs and financial leaders. Do you think there has been a hesitancy of the folks you speak to DOP technology and why do you think that?

Megan - 00:11:27: The people that I speak to, I would say no. A lot of them are fully embracing technology, but a lot of them are also forward-thinking. But I've also heard some statistics like only 5% of what can be automated has been, which is surprising to me because when you hear about automation it sounds like it's everywhere.

Dan - 00:11:57: I think we've hit on the thesis here, Megan, which is the folks you want to bring on your podcast have a positive correlation with being forward-thinking and technology-adopting. Should we write that one on the whiteboard and test it? I agree with you. I think you're spot on, that you've got a subpopulation that you're talking to and that there's a much broader silent majority if you will, who are still finance leaders in accounting and FP&A who are somewhat hesitant. And there are many in my experience this is just in my experience, but many reasons for that, probably the number one of which is resources, and that can be monetary, but much more likely time resources. This is what most finance folks think. When you tell them, hey, adopt a piece of technology, they think, well, what I'm doing today, let's say it's calculating sales commissions. What I'm doing today is very painful. Doing it in Excel, I'm downloading CRM data and running an analysis every month and yeah, it's stinky work, and I didn't go to school for this work, and it's painful, but it gets the job done. And my buddy over at XYZ Company implemented a commission calculation engine three months ago, and they're still in the implementation and he's still doing the manual calculus alongside that. So his job now is even worse than it was. And everyone's heard these horror stories, and that's because a lot of technology is very hard to implement. Megan, you may have your own stories of going through painful implementation, whether it's ERP, which can be the worst to even point solutions. And so I think there's a very real need for the tech industry as a whole, and specifically, the tech industry, serving hesitant buyers like CFOs and their teams to recognize that they've got a bit of a bad reputation for being tough to implement and slow time to value and to step up their game and address that fear, which is very real. Instead of putting it on the buyer and saying you're hesitant to adopt tech, they should look in the mirror and say, well, why are we so hard to adopt?

Megan - 00:14:09: Yes, that's very true. And so what has Planful done in that regard?

Dan - 00:14:13: Well, Planful has tackled that as one of their three biggest initiatives when the company changed investment backing. So the company got a new investment at the end of 2018, and one of the three big initiatives was to reduce implementation timelines. And at the time it was averaging between 35 and 40 weeks, and so almost two, four a year. And the CEO, this gentleman named Grant Howard is my CEO today and is a very visionary leader. He took a look at that and just said, well, why is it the software? Is it our processes? And the answer turned out that it was mostly our processes following an old waterfall-style implementation where, frankly, you were billing a lot. And that was good for the consulting group, but also some tech things. Just the way that we thought about integration, the way that we thought about setting up hierarchies. Not very agile in either processes or the product. And so that has been compressed down to twelve weeks, which is great. So we can incredibly say to a prospect that we'll have you up and running on use cases like reporting in a couple of weeks, and by the way, just stop and think about that for any of you finance and accounting people listening who have owned month-end reporting. But let's just start with Gap, not even management reporting. You have to dump your trial balance out of NetSuite or Confusion or whatever. If you're doing this manually, dump out your trial balance, run it through either Sheets or an Excel model that you have hopefully stood up that maps the trial balance to your groupings on the reporting, whatever your industry is. Get the classic income statement line items, the classic balance sheet line items, classic statement of cash flow line items. Map them all in, pull them in, and then the real journey starts, which is trying to make sense of variances and things that don't balance. And by the time you're all done with it, after several days in your eight to ten-day close, you barely have time to analyze it and do your real job, which is to provide insights and MDNA. And that journey, I mean, I've done that manually many times in my career, but that is up and running and automated within weeks with our tool. It's not a silver bullet, no tech is. But it's a really powerful automation journey.

Megan - 00:16:31: It sounds like it. So does it just sit on top of most ERPs or how does it integrate?

Dan - 00:16:37: Absolutely. So ERP is a system of record for most businesses and at times Plan pool becomes that system of record if you're doing consolidation. But it is always, Planful will always sit on top of the general ledger and then integrate with many other tools out there. Almost think like a bi in the sense that Planfold pulls in data from your CRM, from your commission's calculation engine, from your marketing automation software and it's pulling in that data primarily for planning and analysis use cases rather than for reporting, but also reporting as well.

Megan - 00:17:15: And you mentioned that Planfold just recently acquired another company by the name of is it Planful?

Dan - 00:17:22: Yes. So Peter Mahoney, founder of Plannuh, explained this to me and I just about spit up my drink because I found it very funny. But I'm a finance guy. So the company is founded in Boston and with everything in Boston, you say he's a great player for Butter, for a Red Sox player. Exactly. So became Plannuh. Became Plannuh. And he tells a really funny story where he came up with the name and it was a bit of a eureka moment, and he shared it with his wife, and he actually has a very funny text exchange that he shared with this, and she basically just tells him that's a terrible name. And yet he kind of already had decided on it, and so it didn't stop him from executing a great merger a couple of years later. So good for Peter. But yeah. So that's the name of the company, planner.

Megan - 00:18:16: And can you tell us a little bit about the merger and why you wanted to bring them on board?

Dan - 00:18:21: If you think back just maybe five, seven minutes ago when I was talking about what planful has become this Xena, as Gartner calls it, or planning for the entire enterprise, that was the thesis. But critically, Megan, if you think back even before that, when I talked about adopting technology and implementations and how painful they are, the goal is to be planning for the entire organization, but purpose-built. And I was going to say those two words together again because they're a huge part of my own sort of lens through which I view the future of tech. It's purpose-built, meaning out of the box when you go to the store to buy a leaf blower. It is, I would hope, assembled as a leaf blower in this whole world we live in now where you go buy furniture and it's 3 hours later you're scratching your head and yelling at your spouse, trying to put it together. That's great when it's together, it's economical and great for shipping costs, but it's a pain in the rear end. And so purpose-built means that it's out of the box, designed for what you need to accomplish, and flexible enough to adjust to the reality of a dynamic workplace and dynamic competitive landscape, but out of the box. And that's what planet is, I think only two, although I will not name the competition, one of only two true marketing performance management vendors out there. And what that means is, every year marketing and finance haggle over a budget, and hopefully, it's friendly, but sometimes it's not. Finally, finance gives the marketing team the budget and they say, all right, so here's your headcount number. Think about it like the GL. You're in my world, Megan. Here's your salary, here's your bonus, here's your T and E, here's your tech stack, and then here's this big lump for events, and here's this big lump for programming or demand gen. And marketing says, well, thank you, the numbers are great. Now I have to actually go do my plan. Their planning starts when they get that number because let's say you give them 15 million for web advertisements. Well, they have to then go plan that in campaigns and they have to put content around those campaigns and cascade the timing of those campaigns and figure out a way to measure the ROI. If they're really good, what you might call contemporary CMO, then they're looking at things through an ROI lens. But it's all very manual. I mean, there are some kinds of workflow tools. They can do it on a Monday, but it's not purpose-built for that. So many of them were in spreadsheets and what they would do is they'd say, all right, that 15 million. We're going to do that across 20 campaigns. Here we have our campaign for about a barbecue that we're going to run through Google web ads and Facebook and Insta. And here this next one, we're going to run a podcast. We're going to sponsor a, Megan Wiese. No promises, Megan. On and on. Right? And this is a tool that helps them automate that process, organize it, collaborate, and automatically link outcomes to the planning. So they integrate now with planful, they pull over the full budget and immediately can drag and drop and cascade that into campaigns, assign the right people to them and track the outcomes. So it's a really beautiful marriage, I would say a very natural fit for these two products.

Megan - 00:21:38: Yeah, definitely sounds like a very powerful tool. So throughout your career, and obviously in selling your product, you must have interacted with a lot of CFOs. So what do you think personally makes a great CFO?

Dan - 00:21:53: I just had a really hot take on this one, so I'll try it out here. And you and I were chatting very briefly before this. If you can, you can cut it in post if it's too aggressive. But I would say that to me in 2022, this was not true ten years ago. The hallmark of a really good CFO is if the CEO had to step away from the business for a month, two months, or longer, the CFO would be considered as the replacement, as the interim. And what I mean by that, Megan, is, I think, the superpower of a CFO. In this day and age, you'll hear a lot of things. They need to be friendly with tech and they need to be more operational or they need to be more strategic. But the true litmus test of it is, do they know the business? Do they have a relationship such that they could lead it? And that's my hot take.

Megan- 00:22:45: I like that, and I completely agree. I see a lot of CFOs these days becoming CEO or COO. Whereas like 15-20 years ago, CFOs were only about finance, now they're very much about operations as well.

Dan - 00:23:04: Absolutely. Operations and the third pillar of the strategy. And so what I mean by that is you have to understand the why of the business. Why does it exist and where is it headed? And I think CFOs have been historically a step removed from that. That was the purview of certainly the CEO and the board and perhaps some of the more go-to-market or production-oriented executives. If it's a product company now, the CFO needs to have a seat at that table. And the benefit, the reason the CFO role is so incredible, in my view, is you have not only the excuse but the mandate to know every part of the business. You have an open door as long as you partner the right way to understanding and helping, partnering with everyone from marketing to It to HR to the shop floor, to all the retail branches out there. It is your mandate to know those businesses. And what other exec can say that? Only the CEO.

Megan - 00:24:15: Yeah. And you just mentioned partnering in the right way. But how can a CFO partner in the wrong way, in your opinion? What does that look like?

Dan - 00:24:25: Well, first of all, you have to be useful. And so if it's always a one-way street, you're going to someone and dealing with budget compliance and asking them for metrics and asking them to explain things, then it's very one-way transactional and you'll never be pulled in and trusted the right way. So table stakes is you must be useful. And then there's, of course, and frankly, many people will say this, but I had to learn this the hard way, that you have got to understand how to balance the very real requirement of a CFO to protect the business to manage costs within the budget, to make sure things that are being invested are producing an ROI. To instill the right governance around the business. You have to make to balance that requirement with also the very real need to, like I said, be useful, but to partner with the different executives and help them accomplish their mission, many actions of which will be very antithetical to a normal CFO. Deciding to spend more than you had in the budget is a great example. Deciding to take on a little bit more risk in a contract on limitation of a liability than you normally would because it's hyper-strategic. Deciding to pay a bit more another turn of revenue on acquisition than you normally would because you understand this economy in this environment, that's the only way you're going to get it done, for example. And that's a very hard balance. And I have at times struggled with that. I think you will always struggle with that as the CFO.

Megan - 00:25:59: Yeah, and I'm sure that's even more difficult in high growth or start-up environment.

Dan - 00:26:06: I think that's right. I could imagine it's very difficult in low growth or declining environment. True.

Megan - 00:26:14: Maybe in a different kind of way. And you've served as a board member for a range of companies throughout your career. So talk to us about how this has helped you become a better business leader.

Dan - 00:26:24: It's a wonderful provider of perspective to sit on the board. Now. We should clarify. Megan There is two types of directors. There are classic representatives of the investment group and shareholder representatives. So whether you're representing a VC firm or a private equity firm, in the big public it gets a little different. But in the vast flood of companies, you have two types. You have an independent director and you have an investor director. And they're very different roles. I play predominantly the independent director role, meaning that I'm a bit of a Switzerland, and that job is very different. So if you're representing your investment group, you have an investment committee that meets periodically to review that investment. And you as the investment firm representative, are carrying the company line and protecting the company's interest much more than you are protecting management interests, for example. And all directors have a fiduciary duty to the shareholders, we should just say, but the independent director I think what makes a good independent director is different than what makes an investment representative director. An independent director is one of the most unique animals in industry, period. In the sense that you've been brought in because you can be helpful. I'll just use that word again because you can be helpful. You can be helpful in a variety of ways, but maybe you're an industry expert, maybe you're a product expert, and maybe you can provide really good relationships. You see a lot of celebrities getting on boards now because they can open doors to different channels of distribution or supply. There are a variety of different things a human being can do for a business to be useful. But you also have to be usually an independent director, someone who carries the classic responsibilities of governance. So understanding how to put in good governance to metric the business to ask for the right metrics, to ask the right questions. And then the last piece of it I'm busting around a lot making because this is probably a whole different topic for a different podcast board, governance, and roles. But you ask the question I'm trying to answer, it meanders a bit. The last thing I would say is a really good independent director is helpful to the CEO as an advisor, as a coach, and as a friend. And CEO is a lonely role. They don't really have a peer in the business. They're everybody's boss, just factually. Everybody in the business reports to the CEO in one way or another in a classic hierarchical organization. And so having that independent director who's seen as a bit more of a peer to the CEO is really valuable. I mean, I am going later today to have drinks with the CEO of a company I'm on board of and we are friends and we test each other, we push each other, we ask each other tough questions and I think we've innovated a lot in our classic little pickups. Maybe it's the beer, but I would say that we generally walk away with great ideas from those discussions. So being helpful to the CEO, that's a great answer.

Megan - 00:29:33: And yes, a couple of drinks always help. And if I look back on your career, a common theme is that you've worked in a lot of high-growth companies. So what do you see these companies had in common? Why are they high growth when other companies aren't or fail?

Dan - 00:29:49: You're going to be annoyed because I'm answering so many of these questions with sort of it depends. So it depends on the stage of the business. So the early stage businesses that are doing the classic t for the listeners who aren't steeped in venture speak, that's triple your revenue twice and then double it three times as a quick path in five to six years from. One to 2 million to 100 million, and therefore, theoretically $2 billion valuation. You can look it up. Agrawal T so in those businesses that are high growth, that is thriving, they are literally, Megan, trying to triple or double their revenues every year. And so it's a very different entrepreneurial, pressure cooker environment that often you laugh and roll your eyes because there's just such a lack of instrumentation. You really are in the kind of the Wild West. Many of those companies I've been involved with are actually the first mover in a market. They're defining a market. They have product market fit. But they're going and talking to buyers and saying and the buyers are saying, well, who else does this? And they're saying, It's just us. We're the first one. You have to trust us that we can do this. Whereas later-stage companies like Planful are high growth, it's a different beast. You have this battle you're fighting to stay high growth. And the natural decay of that energy, it's kind of like entropy. It's like the bigger you get, the more drags you down. And I think there have been great pieces written by companies who've shed that, like, salesforce and workday are great examples of companies that have stayed high growth. And so it's this constant battle to actually say what you're not going to do and to be laser-focused. Whereas in a startup, you know what the mission is, and everybody's rowing toward that mission. You have this whole layer of bureaucracy that you're trying to make sure it doesn't drag you down in a later stage business. And I mentioned my CEO, Grant Howard, and he's absolutely great at making sure we examine that and repurpose folks who might be feeling like bureaucracy toward growth-oriented activities.

Megan - 00:32:04: And let's talk about your credentials for a second. So you're a CPA. First of all, do you think that a CPA is necessary these days to become a CFO? And if so, or if not, what is the best path to becoming a CFO?

Dan - 00:32:22: I do not think it's necessary, and the data would support that. I think there are many paths to CFO. You could be in classic corporate accounting, in which case you probably have CPA and corporate finance. So the sort of FP&A track, which is probably the most popular now, I think the data bears that out. You could be in consulting, sort of think the work I was doing at A and M or one of the Big three strategy firms. You could be in investment banking or private equity. And I think that speaks to the sort of multi-tool nature of the role, that there are so many drastically different paths to get there. But whereas 20 years ago CPA was requisite, you had kind of the Arthur Anderson, the Big Four, Big Five audit partner track to CFO. I think that I'm not breaking any news here to say that has fallen out of favor with investors and boards. But I think and I actually may write a little piece on this because it's been really on my mind lately with the FTX news and just thinking about some of these things that have happened over the years with Health South and Enron and FTX. I think that we're starting to see some symptoms of the pivot from CFOs who have pride in integrity and governance. And there's a reason for the pivot away from that it's growth at all costs, especially when money is free for almost 15 years. But there's a cost to it as well, Megan. And I think we're seeing that cost now with businesses that got out over their skis on investing and are having to cut, cut, cut now. And that kind of lack, that voice in the room, that CFO to say, I'm a champion of controls, I'm a champion of return on investment, I'm a champion of integrity. And so I think there's always going to be a place for the CPA because to me, a CPA is not just a validation of technical skills, but it's someone who is vouching that they understand integrity in business. And taken reg, for example, and take ongoing CPE for business ethics, and that's top of mind for them, in addition to the other skill sets you need today. So that was a long I'm just going to hop off my soapbox now and let you talk for a minute. That one you can tell is top of mind for me.

Megan - 00:34:51: Yeah, no, and I completely agree. I mean, I talked to a lot of CFOs today that come from engineering or marketing. I even spoke with one the other day that was an architect early in their career. And, yeah, I think that's great. And the CFO is definitely becoming more well-rounded. But I do agree that there's definitely a need for kind of that traditional background somewhere in there, whether it's your controller, your CFO, whatever the case may be.

Dan - 00:35:26: I think if you're going to be a CFO from outside the world of accounting, you do yourself a big favor by over-indexing toward learning outside of your formal educational structure. The whole of human knowledge is at our fingertips in 2022. If you just think about something like Chat GPT, this will date me in the podcast, like, five years ago now. But the idea that you can query a chatbot to answer most common sense questions out there or fact-based questions is wild. But you could do that three weeks ago with a Google search. If you're a CFO for marketing, you should study what happened at FTX and understand that that could happen at any company if there's a lack of oversight and a lack of controls. And you should put in place the structures. Don't be lazy. Put in place the structures in the first three months that would help you avoid that system of controls and documented policies and procedures, the right technology, I mean, that I think is at risk of being lost. And honestly, Megan is great if your controller has that, but the tone comes from the top, let's be honest. The CFO has to care and has to be conversant in that stuff. And if I'm a board and I have an audit committee, I would be absolutely asking the CFO and testing him or her to make sure that they're across those areas of the business.

Megan - 00:36:53: And you just gave us some, but what other advice do you have for CFOs or aspiring CFOs who are listening today?

Dan - 00:37:01: Oh, boy, don't get the small children out of the way before you take the CFO role. Just sharing this with Megan. I've got two small two years old and three weeks old and great to balance those things. But it's an honor, right? And I say that not to be sappy, but goodbye sleep. I'm sure I would go back to what I said. I think the number one thing a CFO needs to do is to be useful. And in order to be useful, you have to understand your business. You have to be an expert on the industry and the business. And there's nothing stopping you from doing that research. Now, as I said, on this World Wide Web thing, you can go out and you can download industry reports and you can learn the history. Who are the first movers in your space, in your industry and how did it evolve over time? Who has acquired who and how to have the products evolved and just become as good at talking about and holding water in your industry as your CEO, you'll find that doors open and you'll find that you can be helpful and useful to people that you otherwise wouldn't have been if you were only focused on the finances?

Megan - 00:38:17: And last question. But as we sit here staring down 2023, what are the challenges lying ahead that are keeping you up at night, other than your two-year-old and you're newborn?

Dan - 00:38:32: The biggest challenge I have is I don't have a crystal ball. And that is killing me. What I mean by that is we just don't know. Everybody is riding this roller coaster of uncertainty right now where signals are positive and you're going up, and then signals are negative and you're going down. And it sometimes changes within the day, but certainly changes multiple times within the week. That's indicated in the public markets and in the sentiment and in the layoffs. But some people are hiring and some people are leaning in. And so the biggest challenge is that uncertainty. And I've actually written an article or two about this, but that uncertainty provides opportunity. And so the biggest challenge is understanding, accepting the uncertainty, planning for different outcomes, and being in a position to capitalize in a turbulent situation. There was a lot of set of consultants speaking there, so I'll try to distill it down. We don't know what's going to happen, but being ready for multiple different outcomes could be very valuable, would be very valuable, and should be very valuable to most businesses.

Megan - 00:39:40: Great answer, Dan. Thank you so much for being my guest today.

Dan - 00:39:44: Thank you, Megan. And I'm a fan of the podcast. Keep doing what you're doing. We all appreciate it.

Megan - 00:39:49: Well, thank you and I appreciate you taking the time to be here with us today. And I wish you and Planful all the best to all of our listeners. Please tune in next week and until then, take care.

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In this episode, we discuss:

  • Relationship building and perseverance for career pivots

  • The FP&A platform for continuous planning

  • The role of technology for CFOs

  • What makes a great CFO?

  • What makes a good independent director?

Key Takeaways

Career Pivots

Quote cfo career pivots

Dan started his career in auditing working as an associate at PwC. In time, he pivoted to investing. Dan believes two aspects will allow anyone to make a career pivot: relationships and perseverance.

“Folks who are in the private equity world, running models as an associate, will also recognize that it is a big leap to go from being a deal associate to being a CFO,”Fletcher said. - 03:01 - 06:40

The FP&A Technology Platform for Continuous Planning

Quote Dan Fletcher cfo of planful

CFOs use Planful to streamline FP&A planning, budgeting, consolidations, reporting, and visual analytics. The platform aims to accelerate a company's cycle times, increase productivity, and improve accuracy across the end-to-end FP&A process.

“Planful is for anybody doing financial and operational planning and reporting anywhere in the business,” Fletcher said. - 08:07 - 10:42

The Right Technology for Your CFO

Technology is really important to be a high-performing CFO. However, due to high monetary and time resources, as well as the unsuccessful experiences of other folks, most finance and accounting professionals have been slow to embrace new technology. Dan admits there is a need for the tech industry as a whole to recognize these drawbacks and find solutions to help finance professionals adopt their products efficiently.

“And so I think there's a very real need for the tech industry as a whole, and specifically, the tech industry serving hesitant buyers like CFOs and their teams, to recognize that they've got a bit of a bad reputation for being tough to implement and slow time to value, and to step up their game and address that fear, which is very real instead of putting it on the buyer and saying, you're hesitant to adopt tech, they should look in the mirror and say, well, why are we so hard to adopt,” Fletcher said.- 10:43 - 16:31

What Makes a Great CFO? Technology & Relationships

Quote great cfo who understands technology

To succeed in their role, modern CFOs should be more operational and strategic, know their businesses well, and build strong relationships with all teams. A CFO is seen as the right hand of the CEO, who should take on the executive and leadership roles in case the last one steps away from the business.

“The hallmark of a really good CFO is if the CEO had to step away from the business for a month, two months, or longer, the CFO would be considered as the replacement,” Fletcher said. - 21:42 - 24:16

What Makes a Good Independent Director?

Quote good independent director

Regarding the business, Dan states there are two types of directors - an investor and an independent director. Dan considers himself an independent director that a business brings in because he can be helpful, whether as an industry or product expert or a relationship builder. An independent director also has to carry the classic responsibilities of governance and be helpful to the CEO.

“A really good independent director is helpful to the CEO as an advisor, as a coach, and as a friend,” Fletcher said. - 26:16 - 29:35

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