The Finance Generalist: Precision vs. Accuracy in Forecasting

Megan - 00:51

Welcome back to CFO Weekly. Today, I'm chatting with Derek Paulson, vice president of FP&A at Pura Vida, a purpose-driven lifestyle brand and certified B Corp known for turning simple friendship bracelets into a global business that gives back. Derek is a finance leader who proudly describes himself as a generalist with experience spanning FP&A, strategy, supply planning, and performance marketing across companies like Rad Power Bikes and PepsiCo. In today's episode, we'll explore how finance leaders can thrive as generalists inside highly specialized functions, why connecting the dots across teams is becoming a superpower, and what it really takes to partner across the business to drive growth. Welcome to the show today, Derek.

Derek - 01:35

Thanks, Megan. Super excited to be here. I've been a listener of the show, and I'm just excited to share what I can and hopefully learn from others as well.

Megan - 01:42

Awesome. Well, I'm very glad you're here, and thank you for taking the time to be our guest today. So you describe yourself as a generalist at heart. When you look back at your career, when did you first realize that being broad across disciplines could actually become a strength in finance?

Derek - 01:59

Yeah. It's a great question. I would say early on in my career, I was building an FP&A foundation. I began my career at Honeywell, which is a large Fortune 100 manufacturing company, and I was a cost accountant at a molecular sieve plant in Mobile, Alabama. If you have no idea what any of that means, I didn't either when I started, but it meant I got to wear steel-toed boots and jeans to work. I did spend time in Excel and SAP like you would expect for an FP&A and accounting role, but I also got to walk the shop floor and literally got my hands dirty supporting the business. Beginning my career in that type of environment was a really good learning opportunity for me to see not only what the numbers on the spreadsheet say about the business, but what is actually happening out on the shop floor.

A good example of that is in manufacturing, standard cost is industry standard—how everything gets recorded from an accounting perspective—and then FP&A would typically report on variances to that standard. A lot of times, if you haven't been at a plant and seen how operations actually work, those numbers can just be numbers on a spreadsheet and you lose the context. But because I was out on the shop floor and I was actually seeing the production line workers dumping the material into the extruder and then seeing the finished product come out, you could see where the variances and where that waste was coming into the process. That was a super good learning opportunity for me to see that stepping outside of finance and seeing how people actually work and where the value is created on the shop floor is a superpower. Then my variance commentary was much more informed and straightforward, and it's something I've carried through in the rest of my career. I always try to find ways to get out to the retail stores and talk to customers. Those kinds of things are really critical, and if we're too stuck in our day-to-day, then we miss those opportunities.

Megan - 03:51

As the role of the CFO and finance leaders evolves, I feel like it's so important to really understand the customers and operations. I'm always surprised that more companies don't do some sort of rotational program through different areas because I do feel like this is such an important skill set, like being a generalist.

Derek - 04:16

Honeywell has a really well-structured and well-thought-of finance development program, and it's exactly that: to get you exposure to different areas of the business and different functions. I was a finance business partner for the sales team that was going out and selling repair and overhaul work to major airlines, and I made that transition from the chemical plant. Those types of programs are structured to get you that breadth, and I can say for myself, it's been a huge unlock. I think the biggest learning for me was when I was preparing to leave that role in the manufacturing plant. The plant manager gave me some good career advice that has always stuck with me: "don't ever forget where the value is created." I think a lot of times as finance professionals, we become finance-centric in our viewpoint of the world and the business. But really, when it boils down to it, it's at the production floor; it's at the retail stores. That's where the value is created, and we do ourselves a disservice if we forget that.

Megan - 05:10

You might have just answered this next one to some degree, but you've worked across FP&A, strategy, supply planning, and performance marketing. Was there a moment where stepping outside of the traditional finance role changed how you saw your own role within the organization?

Derek - 05:27

Because of the way I've structured my career and intentionally shaped it this way, there are a lot of experiences of this. One of the most impactful for me was when I stepped outside of not only finance, but the workforce entirely and I went and got my MBA. It's a pretty common career path to work for some time and then go get an MBA. First of all, I'm an extreme proponent of lifelong learning and I always had that mindset of being a generalist. I decided I wanted to pursue an MBA, so after about five years in corporate finance, I went to Northwestern to attend the Kellogg School.

One of the things that I loved about my MBA experience was how much there was to learn, and only a portion of that learning came from the traditional classroom. I learned from peers that had been marketers, founders, engineers, soldiers, and public servants. I took classes in marketing, entrepreneurship, and social impact, as well as economics and public speaking. Every single one of those experiences and those relationships changed the way I see the world of my work. I came out of that experience determined to change the way I worked in my future career. I wanted to continue learning from all sources and not become so specialized that I missed out on the insights and expertise that you can glean from interacting with others.

Megan - 06:46

I love the idea of being a lifelong learner, especially these days where the world is just changing so quickly. If you're not constantly learning, you're kind of left behind.

Derek - 06:56

Exactly. I try to read as much as I can. Obviously, in the world of AI, there is just this overwhelming access to knowledge. Being open to exploring it, but also judicious about how you spend your time, is something I'm always constantly thinking about.

Megan - 07:13

For listeners that are early in their careers, what does being a generalist in finance actually mean in day-to-day work? Secondly, do you have any advice for those who are early in their career and maybe working for a company that is somewhat of a pigeonholer? Any advice to get outside of the finance function in an organization where there's not a structured program to do so?

Derek - 07:42

It's a great question. I think it's so context-dependent, so I don't want to pretend that I have the perfect answer for everyone. In practice, being a generalist in finance means you have earned the right to express a viewpoint in pretty much any meeting you're involved in. Every business decision has a financial component to it, so acting as a generalist while you're filling that finance role isn't really that much of a stretch. Our training and experience gives us not just the opportunity, but sometimes the mandate to participate in discussions on pricing, supply chain efficiency, and marketing investments.

But just because you have that experience in finance doesn't automatically give you credibility. I'd give two pieces of advice on this. First, you actually have to get really good at finance first. You can't earn credibility without nailing your own job description. If you go into a meeting and start expressing opinions that aren't based in fact and you haven't built up that credibility, you lose trust really quickly. Take care of your most critical finance functions. If your balance sheet doesn't balance or your forecast is wrong, you're going to have a hard time spreading your wings. The second thing is becoming a generalist means being humble enough to ask a lot of questions. One of the things that makes a generalist valuable is when they can absorb the input of specialists and then translate that to the big picture. In my current role as head of finance at Pura Vida, I spend a lot of time with leaders from other functions and I'm always trying to glean information and insights from them, which in turn makes me a better finance partner. Have the humility to listen and absorb. Nail your current job, ask those questions, and become a true business partner where you understand their language and they understand yours.

Megan - 09:50

Great advice. At Pura Vida, you partner closely with marketing, operations, and sales. Where does the generalist mindset create the most value in a consumer brand like this?

Derek - 10:02

Finance is one of the most important roles in a company just because it is the backbone. If the CEO is the pilot, then the CFO should be the co-pilot focused on the instrumentation. One of the key jobs of the co-pilot is to keep an eye on every single piece of that instrumentation telling you your trajectory, speed, fuel levels, and whether or not you're on course. The CFO role is very much that: What is our trajectory? What's our cash flow? Are we headed the right direction?

When you partner closely with all those other functions, your role is to synthesize that and bring it all together to help guide the organization. Number two is our role is also infusing the rest of the organization with the financial acumen they need to perform their respective roles. For example, the marketing team spends money on influencers, photo shoots, and graphic design. If they don't have the right guardrails, a good budget process, and a way to measure the return on those investments, they struggle. Finance has a key role to not only be the guide and the co-pilot, but also infuse the rest of the organization through training and business partnering with the decision tools they need.

Megan - 11:44

How much training on financial acumen do you do throughout an organization?

Derek - 11:50

At times, it's structured with budget reviews. Other times, it's ad hoc. I'll be in a one-on-one with someone from another function and they're lost or they need a template. Oftentimes, it's in those casual situations where I'm able to share perspective and tools that work for me. Some of it can be structured, but a lot of it is on an ad hoc basis as things come up.

Megan - 12:19

How does understanding demand planning and inventory change the way that you approach forecasting and financial planning?

Derek - 12:27

One of my areas that I've focused in on is demand planning. Pretty much my entire career, I've worked in companies with physical products where inventory is the largest value on the balance sheet. Find what's the number one driver of cash in your business model and spend your time there. My dad was in the military and he taught me a principle in reference to marksmanship: the nuance between precision and accuracy. If you imagine a target, precision means all of the bullet holes are tightly clustered. Accuracy means that the holes are close to the center. It's possible to have precision without accuracy. If your scope is adjusted incorrectly, you may have a bunch of holes really tight next to each other, but they're far away from the center of the target.

This is a really good lesson for FP&A. You can have a perfectly tuned forecast, but if you miss your main assumptions and you miss the top line, everything goes out the window. We talk about forecast accuracy, but that means not just precision. You need to hone in on the most impactful levers that drive the ultimate outcome. I've started to lean into AI for this—using Claude and Excel. One of my favorite use cases is asking: "If any of these inputs change, what is the most impactful for the end result?" Then I spend my time on scenario planning and sensitivity analysis. Get the top line right, get the main driver of the forecast right, and then the precision oftentimes naturally comes because we're good at building models in finance.

Megan - 14:51

How far out do you forecast these days? Where do you find the most value in the period that you forecast?

Derek - 15:01

The traditional FP&A model is first you build your long-range plan (three to five years), then your annual budget, and then a monthly forecast. We're on a retail calendar. We're two months into our fiscal year and we're already changing big assumptions for our annual forecast. We're in a super volatile time—tariffs, refunds, demand volatility. You always need that full-year view, but the knowledge of where you will be twelve months from now is hard to get right. My advice is get really tight for the next three to four months and then use scenario planning for the rest to help bridge the gap if assumptions are off by 10% or 20%. You have to build flexibility into the model; otherwise, you end up with a stale forecast really fast.

Megan - 16:05

How do you balance staying high-level and strategic while still being comfortable getting into the weeds when it's needed?

Derek - 16:13

Time management has always been a challenge. I have a framework that helps with efficiencies when I need to get into the weeds because finance teams are really lean. As head of finance, I don't have an analyst right now. I have a controller and someone who is analytics-based, but for ad hoc analysis, a lot of times it's me doing it.

I try to chunk out time in the morning before everyone else has logged in and starts pinging me. I follow a framework I call "Plan, Do, Report." First, I plan out what analysis I need. Sometimes I will literally build out the summary slide of what I need as the outcome because jumping straight into analysis without a plan is like going on a road trip without a map. Once I have that plan, that's when I get into the weeds and do the work. This is also where I lean into AI to help increase my speed to an answer. The last part is the report part where I come back out of the weeds and step back up and say: "What would I report out on from what I've just learned?" It's easy to get into a flow state and start to solve the wrong problem. This framework is iterative; I do it throughout the day and week to stay focused.

Megan - 18:28

Looking back over the years, what skills have helped you translate between teams and influence decisions, and how has that shaped your credibility as a finance leader?

Derek - 18:44

In my opinion, the biggest predictor of success is intellectual curiosity. Be willing to sound dumb by asking questions and then incorporate that knowledge in your decision-making. You used the word "translate." I call myself bilingual. I learned Spanish as an adult. When you first learn a language, you think in your primary language and translate it in your head before you speak. As you become truly bilingual, you begin to think in that second language and skip the translation entirely.

Often, finance professionals think in finance terms first and then translate. If you get good enough at understanding what other people value and the language of other functions—like marketing—it speeds up that process. If you understand the way they view the world, you can truly be a connector. If you understand that ROAS (return on ad spend) is essentially ROI in a marketing context, you can be much more productive in helping them understand efficiency.

Megan - 20:43

Let's dig in on the career counseling for just a moment. How did you come to take on that role and who do you career counsel?

Derek - 20:53

I benefited tremendously from great mentors early on. Because certain people invested in me, I'm a big proponent of paying that forward. I help my own direct reports, but I've also gotten involved with a company called Leland. They do career coaching and MBA admissions consulting. It’s a marketplace for people who want coaching. I have loved it. It’s fulfilling and helps me keep a pulse on the marketplace. I primarily focus on earlier career FP&A individuals. If you're aspiring to that CFO seat, I’m happy to help with resume reviews, identifying career steps, networking, and mapping out a career. It helps grow our function and strengthen FP&A as a well-respected discipline.

Megan - 22:50

Do you think the future of finance leadership will lean more towards specialists or generalists? What should professionals start doing now to prepare?

Derek - 23:03

I actually think it's a false dichotomy. There is always going to be room for both. The path of a generalist has led me to the cusp of the CFO seat, but generalists can only do their work well if there are specialists that help hide generalist deficiencies and sharpen insights. The key skill of a generalist is leveraging specialist work to form connections. Neither is inherently more valuable. Rather than focusing on which path provides the best career, focus on impact. Impact can come from any position or working style. Focus on doing your best in your current role and seeking opportunities to grow by absorbing from the people around you.

Megan - 24:28

That's one thing I've loved about having an accounting degree; there are so many different paths you can take.

Derek - 24:37

FP&A is a "choose your own adventure" career. You can lean into accounting, AI, or commercial focus. I love it because I don't get bored.

Megan - 25:02

What is one thing about the future of finance that excites you and maybe one thing that concerns you?

Derek - 25:11

The answer to both is AI. A year ago, I called myself an AI Neanderthal. I didn't see the vision. I didn't see AI taking over monthly close or reconciliation anytime soon. Honestly, a year later, it's doing just that for a lot of organizations. The speed is mind-boggling. It’s opened up doors for high-complexity modeling that I historically couldn't get to. I think of it like the Iron Man suit. If you use it properly, it turns you into a superhero and expands your capacity two to three times.

The flip side is that it concerns me how people who came up as cost accountants or basic analysts will build a foundation if those roles don't exist a year from now. If we hollow out that foundation in a short-term focus on efficiency, we lose the ability to create an environment where early-career folks develop critical judgment. My advice is to focus on what you're outsourcing. If you're outsourcing repetition, that's fantastic. If you're outsourcing your critical thinking, that's where you're going to struggle to grow. Think of Claude or ChatGPT as your analyst. You are responsible for understanding, pushing back, and poking holes in that output. Developing finance judgment is how we successfully integrate AI.

Megan - 27:57

Derek, this has been such a valuable conversation. Your perspective reinforces that the future of finance belongs to leaders who can connect the dots across functions. Thank you so much for sharing your journey.

Derek - 28:16

Thanks, Megan. I've really enjoyed it. I'll leave with the final thought: don't ever, ever, ever outsource your critical thinking to AI. Keep that as your value to the organization.

Megan - 28:30

I love that advice. Thank you. And to all of our listeners, please tune in next week. And until then, take care.