How Can Operational CFOs Successfully Drive Change Management

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 Weis. Let's jump right in.

Megan Weis: Today my guest is Jennifer Herdler. Jennifer's the CFO at Impact Health. Prior to this role, she was a senior consultant with SimplyPut Consulting, focusing on project and financial management and process improvement initiatives for companies. She was also CFO of CorseMax Inc, a diversified family office with multiple business lines. Jennifer has experience in logistics, real estate, retail, restaurants, manufacturing, distribution, consulting, and accounting advisory. Jennifer is experienced in consulting for IT, and process improvement, project planning, and operational risk controls.

For over 16 years, Ms. Herdler has been a controller, finance director, chief financial officer, KPMG CPA/CA, and an organizational process improvement consultant. Jennifer is a strong FP&A and accounting leader with exceptional project management and planning skills who connects strategic business objectives and the financial impact on the business to help empower profitable data-driven decisions. Jennifer earned a bachelor of commerce and accounting from the University of British Columbia. She holds a chartered professional accountant license in Canada, the US CPA equivalent. Jen, thank you very much for being my guest today.

Jennifer Herdler: Oh, thanks, Megan. I'm really excited to be here with you.

Megan: I'm really looking forward to this topic. It's one of my favorites, obviously, because of its importance to the success of today's CFO. Today we're going to be talking about the role of an operational CFO and having a process improvement mindset as well as the opportunities and challenges that go along with that. First, let's start with a little bit about you. Can you just tell us about your career journey to date and how it is you got to where you are?

Jennifer: Sure. Love to, Megan. I think, really, all my work experience has centered around those themes that we're talking about today, which is really enjoying being an operational CFO and really enjoying the performance improvement and change management. I think it really goes back to really enjoying business and both aspects of business, both the people side of the business, as well as the numbers.

Even when I was back in college, I was contemplating whether to do an organizational behavior major versus an accounting major. I'd already had experience with KPMG as a summer student, but I really excelled in those HR classes, and it was really hard for me. I ultimately chose to pursue my CPA designation. I'm really glad I did because it has really opened many doors for me, but certainly, I think what has helped me through this whole process and being an operational CFO is really enjoying both the people side and the number side of business. I think that's really what helps you be effective.

When I was back at KPMG, I articled in Vancouver, Canada. You obviously get a variety of experience in these different work environments than what I was drawn to was the entrepreneurial companies because it seemed that management could execute change a lot more quickly. My first role out of public practice was with a denim manufacturer called Pimlico Apparel. Our significant customers were Levi and Gap, but we manufactured denim jackets and jeans. At the time, it was growing at 20% to 30% a year.

Even in the '90s, which I know dating myself, but even back in the '90s, it was hard to keep apparel manufacturing in Canada. We had to be super vigilant with our management of our labor costs, and as well as our supply chain. I think that was my real hands-on, first-time exposure of partnering with operations and really what that means to help drive business results. I really realized at that moment I'd loved operational, being an operational CFO because I really loved the proactive and planning nature of that role.

Again, I would then move to, even though I became a manager of financial controls in a mutual fund in Toronto Canada. You would say that that would not be consistent about being entrepreneurial, but for that role, it was because it was a brand new department. They really they wanted to work on the controls and their processes. I had to really, again, partner with operations to get them to buy into these changes and to create more efficient processes within the company. It was the same thing in a different way.

After working at TriMark, we moved to the United States, we moved to New York city and I took a break in my career for over 12 years. We then moved to Philadelphia, and I took on a role as a CFO for a multi-industry family office. One of the things I did during that time is I did an IT consulting assignment as a finance consultant. It was for a large freight company that needed upgraded IT systems as well as more efficient, processes.

During that year-long project, I worked with both the finance team as well as other operational teams to develop more cohesive processes to run their business more effectively and eliminate some of the redundant processes. I think there I really developed a love for process work and the change management piece because it really utilized my financial, my operational, and organizational skills. It relied on me to help effectively move change in an organization. I realized that that was something that was really satisfying for me.

Megan: I feel like I say this all the time, but it's not possible anymore for accounting, and specifically a CFO, to operate in a silo. Accounting and operations, there so much more value in marrying the two.

Jennifer: You and I, we've been doing this for a while and I think certainly and I keep dating myself, but when I started out way back at Pimlico, cell phones weren't a thing. Email was just starting. Certainly, communications have changed tremendously over that period of time. Really, technology has allowed us to be more analytical. Not just producing the numbers. I think more than ever that, that technology has allowed us to really create this collaboration. With all these departments and to derive financial results. Certainly, I felt like it was definitely obviously more siloed.

Megan: I think the more that technology rises, the more important it is for people to develop their soft skills because that's where the true value is these days.

Jennifer: Oh, I totally agree with you because they provide tools. We're all using metrics now to help us run our businesses, which is fantastic because they have a lot of predictive ability, but certainly, the people that drive the change are the people. We can have all the tools we want and metrics we want, but we really need the people behind it to effect the change, to motivate people, to help manage our costs and your revenue. Certainly, it's all people-related.

Megan: Let's switch gears a little bit and talk about your current organization, Impact Health and what it is they do.

Jennifer: Sure. Impact Health is a leader in providing what we call rapidly deployed, point of care, whether it's health, wellness, or staffing services. What we do is we combine, we have over 20,000 trained healthcare staff. We have a lot of rigorous protocols that we adhere to as well as our technology to provide turnkey services. That includes currently right now the COVID 19 testing and vaccinations as well as biometric screenings and staffing programs.

We provide these services for various businesses, governments, and organizations. I would say one of the things that has helped set us apart is really our rapid response. We really pride ourselves on our quick turnaround to our customers' requests. Even once we have the customer and the project in place, we certainly have dramatic changes in the requirements from the customers. The whole industry has changed so dramatically over this period that we've been in the pandemic. We have to continually pivot with our customers. I think that's one of the things that we've been very successful at and has kept us really loyal with the customers that we do have.

I like to think of Impact Health as a 20 year startup. Prior to COVID, we were this small biometric testing company. When COVID came along, we experienced obviously explosive growth from 2019 to 2020. Obviously again, in 2021. Our revenue in 2020 was 10 times that of 2019, the majority of that coming in the last half of the year. When we started the pandemic, our nurse network was, we had 300 nurses and technicians across the country. Now we currently have 20,000 in our network. That was a dramatic, obviously, increase in the scaling our business processes to create that network of nurses we have throughout the country.

Megan: You've been with them for how long now.

Jennifer: I came on board in August of 2020 as a finance--

Megan: Oh, wow right in the thick of it.

Jennifer: Right in the thick of it. I came on as a finance consultant or simply put, consulting. Over the period of time, I transitioned over to the CFO. Certainly, yes, we were right, we had just gotten a few really significant state contracts. The volume went through the roof, and we certainly didn't have the processes or IT infrastructure to support that. Yes, it's been a real journey over the last year and a half with them.

Megan: I just want to really quickly go back to something that you said earlier. You mentioned that you took a 12-year hiatus to raise a family. For all the other women out there who are in that boat, or who are considering that route? How is it that you got back into the workforce after 12 years?

Jennifer: I really thank you for asking that question because I think it's really hard. I think it's hard for women, they have to make choices. I think, ultimately, a lot of women feel they have to stay working full time because they really love their job and they have concerns about how it will feel to work part-time or even giving up their career altogether to raise a family. I do think it is really challenging. One of the things I think I would say was a turning point in my career would be staying at home to raise my kids. Really, that's because when I wanted to go back in the workforce, and I wanted to work again, I had taken the job in Philadelphia as the CFO for this multi-industry family office.

I knew I needed to update my modeling skills. Obviously, businesses are looking for really current skills. That was one thing I really wanted to work on. I went to a course in New York City by Train The Street, and it was a financial modeling course. I'll never remember when I walked in that first day of the course, everyone in that room was at least 20 years younger than me. It was really intimidating. Of course, as we're starting and we're doing different programs and we're doing different tasks, they were all way faster than I was, completing them. They could move around, obviously with Excel way faster than I could.

When it came to actually discussing the models and the business decisions that go along with these models that we've developed, I realized I had a lot of insights that they didn't have. It was a real moment, for me, that gave me a lot of confidence. It was that I realized, over this period of time, the financial statements hadn't changed. Making good business decisions requires good judgment. You have to be able to communicate the information well. I realized I had all these soft skills that they didn't have, that were actually really more important.

It really goes back to leadership is what I feel drives change in organizations. In itself, that gave me so much confidence moving forward in my abilities in being able to trust my judgment and understanding I had all this experience before. I think whenever you take a break, it gives you a different perspective. I think that's what we're looking for in a workplace, we're looking for diversity. We're looking for different perspectives because that's when we make better decisions and get better results.

Megan: Yes, that's very insightful, and thank you for sharing that and your experience there. Going back to Impact Health, what have been your proudest achievements since joining that organization?

Jennifer: I think the first thing that I was tasked with doing when I joined Impact Health was really the automation of the payroll process. When I came on board, we were running the finance department was pretty much all manual. We were running our payroll system in a similar fashion. Nurses were faxing in their timesheets. We had to manually key in all the information into a database. Then we had to manually key in all this information into the payroll system. As you can imagine, that doesn't go well when you're trying to scale an organization. That whole process was just fraught with errors. Obviously, we weren't doing a good job of paying our employees.

That was the critical process to fix right away because, obviously without happy staff, we're not going anywhere. All my energy went into creating a process that worked manually first and then automating that whole process. That's really what I spent my first six months really focusing on was the whole automation of that process, which we have now done successfully from onboarding, through HR, through the collection of time, the approval of time, and then the processing of payroll, through a system that is all automated.

Through that process, we are also able to then get our labor information by project on a daily, weekly basis, whatever, we need to measure it at. That is a critical success factor for our business. I think I am really proud of just how much work that went into revamping that whole process, but ultimately, making it very successful for our company.

Megan: Yes, what an awesome achievement, and getting paid is definitely part of keeping employees happy.

Jennifer: Well, right? Ultimately, I say this to my team all the time. Finance is the most important thing we do, is paying people because that's really important. From that, we really keep pushing our payroll on how we do things to try and get better at it. Even from when we started, we used to pay bi-weekly, and we've moved that to weekly pay now. Certainly, that makes our employees really happy. I think just really looking at that process continually and trying to get that better, we're all ultimately served in an organization.

Megan: Definitely. Over the last few decades, as we look at the role of the CFO, it's undergone a profound shift. As an operational CFO, and this is the first time I'm actually hearing that term, but as an operational CFO, what does your role entail?

Jennifer: Yes, maybe that's just my term, I call it operational CFO.

Megan: Yes, I think it needs to be a thing these days.

Jennifer: I really do feel like the focus of the CFO has to partner so much with operations because you're really taking your financial knowledge that you have, and understanding what are the critical financial drivers of the business. You really need to then communicate that to your ops team, and give them the information so that they can make good decisions. Whether it's reporting tools or metrics, is really, I feel, like a big education and partnering piece, that we're in this together, and that we're trying to give them the information so they can make really good business decisions.

I think that partnering is really that part of the business versus just I think, traditionally, obviously, CFOs have been reporting on financial results.

Megan: Historical, like looking backwards.

Jennifer: Right. I think really, now, I mean, at the pace of technology, and the way that we do business today, the role has just evolved into this. The CFO role has really evolved into more of a planning and proactive role and trying to help lead the organization by giving ops, or sales, or IT, or whatever department is, the tools they need to do the business. I think as far as my work goes, on a daily basis, I'm partnering with the President so much about these strategic initiatives, and working, whether it's my senior ops team or my IT team to make sure that they know we're setting up the software and systems to support our growth and support us going forward.

Megan: Maybe you've already touched on this, but so what is important for CFOs to know that want to focus on the operational side of the business?

Jennifer: I think what is really critical is you have to really understand your business. You really have to understand the key drivers in your business. I think that's really from getting involved, like a really hands-on from a customer perspective, from a vendor perspective, from the different partners that you work with, and really, obviously, your internal team. I think first, you really have to understand like an ops person, how it actually functions and runs. Then through your communication skills, giving, as we spoke about, the team the tools they need. I think really training and education is really such a big part of that.

Megan: Yes, whenever I speak to my guests about this kind of topic, I'm always reminded of the show Undercover Boss, where the CEO would be out there on the frontline with the workers, and it would give him a true understanding of the business.

Jennifer: Right. I totally believe that and sometimes, I still get there's a payroll issue or email directly to me. Sometimes, you're like, oh no, but it's really good to have a hands-on to talk to the people. For us, our nurses and technicians are on the front line and they're critical to the success of the organization. It's really good when you have a site visit and you can talk to them and hear the frustrations they have or whatever. Often, they have great insights because they're living it day-to-day. They have great ideas as to how you could make change. Certainly, yes.

Megan: With Impact Health having played an important role in the frontlines of COVID 19, you mentioned the company's experienced dramatic growth. Talk to me about what this was like and how it impacted the business and your work today.

Jennifer: Sure. It transformed, obviously, our business completely. We came into a company that didn't have any IT infrastructure. We had to look at the whole IT infrastructure, as well as looking at all the different processes with the company. They all had to be redone company-wide. Pretty much every process in our finance department had to get reevaluated and redone. We obviously wanted an ERP, so we had one source of truth within the organization and we chose NetSuite for that. Everything we did at Impact, we had to implement it in a really accelerated timeframe.

We were working on QuickBooks. It was not obviously giving us the information that we needed, and so all of our analyses and all of the project profitability work we needed to do was all being done in Excel. I had to be pretty aggressive with our plans. It was certainly what was being demanded of me to run our business. We often use that analogy. It was like us building a 747 in the air. You're firefighting all day long with this incredible growth you're trying to manage, as well as you're trying to put in all of this infrastructure and process in to help grow the company at the same time. It's super challenging.

Amongst that, we had to make a lot of pivots because of industry changes. Along the way with COVID, we had change, whether it was counties or cities when they introduced their vaccine requirements. We had the OSHA mandate come in, and that really drove what businesses thought they needed to have in place. We had changes when the variants came around, whether it was the Delta variant or the Omicron variant. We obviously had huge spikes and changes in positivity rates that required us to pivot dramatically our staffing levels at our various projects. Throughout the course of this time, even within the pandemic, it's changed dramatically.

I look at even the tests that are from both the state perspective and from the businesses that we support, what they're looking for has changed too. Versus your PCR, your antigen test, it has changed dramatically over this period of time as far as what they're looking for. One thing I keep saying about Impact Health is that the thing that's constant is change. That has been a recurring theme for us. Even within this pandemic, is just change has been constant.

Megan: I personally love change. I think it makes for an exciting work environment.

Jennifer: It sure does. I always say that-

Megan: Obviously, not everybody likes that.

Jennifer: -to my team. No one is bored. Definitely, you're never bored there. Absolutely.

Megan: What advice do you have for CFOs going through a season of growth? In other words, how can a CFO thrive in chaos? As an accountant, we are known to like structure, so talk to me about chaos.

Jennifer: Sure. Ultimately, growth is really hard. I would say, this last year and a half has been extremely hard. I've never been taxed in a way that I have over the last year and a half. Realizing that that growth really acts as really a positive change agent, you can use it in that way and you can accelerate change in such a different way than you can when you don't have that growth. The structure that I often rely on is just that we need really good information. It goes back to your data integrity and your source of truth and what you're using as far as your information goes because you need to rely on that to make decisions quickly.

I think, for me, as far as when you're dealing with all this chaos, I am also very structured. Creating some structure within the chaos, I simply chunk out times in my schedule every week so that I can work on these long-term initiatives that are strategic. When you're firefighting all day long, you can get lost in that. Without building for the future, if you don't set time aside in your schedule, there will always be a fire in front of you to deal with. I often too, when I come in every day, pretty much have three things that I know I have to accomplish to really move these initiatives or a projects forward.

Many days, that's all I get done because whatever issue has come up for us that we have to deal with extreme growth. In that, having that structure, for me, I know each day, if I'm chunking away at these bigger term projects and moving them forward in the right direction that I know that I'm accomplishing and I'm looking after the company going forward for our growth plan. Certainly, those things have helped me create a bit of structure within the day that can be pretty hairy at times.

Megan: That's great advice. Often, I hear that the hardest part of change is actually getting people to buy into that change and then manage the process of change. What is the key to being successful in change management?

Jennifer: If I knew that, I would be using that on my teenagers and my college students every day, or my kids, they're college students. I wish I knew that as well, because it's all about motivating the person. Really, from a work perspective, I look at it from just trying to appreciate that everyone's coming from different comfort levels with change. Not everyone. Some people can move with change a lot easier than others. For those that have a harder time with change, I think I have found just understanding what it is that is really behind the change that is causing them concern, or whatever it is for them, and try to address that head on.

I often find that a lot of it, for a lot of the people that I'm working with, or even as a department as whole, is that they don't understand what they do affects, whether it's upstream or downstream, other people within the organization. I think when we get a group together and we're looking at a process, and I think this is why I love process work so much, is when you get a multidisciplinary team together and you go from beginning to end of a process and they actually see how something they do affects someone 5 steps, 10 steps down the process. They're much more receptive to doing change when they understand how that can positively help another team.

I think a lot of the time, people just aren't aware of what they're doing makes things harder or better for another department or even another individual within their department. I feel like that's why the process works really helps move through on change management. Then ultimately, I think if people really just buy into the vision of what it is you're trying to change and why you're trying to change it. Taking the time and spending some time on that has helped understanding how this relates to the bigger vision of the company or the department that you're trying to do.

Megan: That's great advice. For someone that said they are not sure how to do it, that's awesome advice. I think transparency, early buy-in, and like you said, getting people to understand the part they play in a bigger picture, are all very important components to managing people through change. As you look out on, let's say, the next quarter or two quarters, what is the biggest challenge that you and your team are facing?

Jennifer: As I've said, our industry has changed so dramatically. One of the things that we're currently facing right now is supply chain issues. Inventory management has been extremely challenging for us over the last few months because it's really hard to procure COVID-19 tests right now. There are global shortages on the COVID tests, so getting this product to support our revenue streams has been really difficult.

Obviously, without these COVID tests, we cannot generate revenue in our testing division. The sourcing of these tests has now become a strategic initiative. I look at two quarters ago, that was not an issue for us at all. Certainly, that is upfront and critical as far as we're managing it every day. Managing it differently, looking at our analytics and our metrics to anticipate our inventory needs and demands. That whole demand planning thing has become paramount for our focus right now.

Megan: Yes. I read in the news everyday about supply chain issues, but I didn't even think about how major that is for you and an organization like yours.

Jennifer: You're right. I know all industries are facing this. It's been really interesting. We're also looking at, for us-- We're transitioning obviously. We have an expansive nurse network across the country. We're really looking at supporting our other revenue streams and using these nurses in other ways that are complementary revenue streams going forward. I know obviously COVID-19 has served our company very well, but certainly we would all like COVID to become a lesser role in all our lives.

Certainly for the country, I would really like to see it become less intrusive for all of us, and certainly, we have been working hard at our strategy as far as developing complementary revenue streams to keep growing our company forward.

Megan: Lastly, as a CFO, as you look at the big picture, what's keeping you up at night?

Jennifer: I think for me, it's providing good leadership. It's really trying to balance, I feel, in the company, the analytics and connecting with people. I think obviously the market is really competitive right now to attract good talent, and the workforce is critical for any business's success. I think looking at making sure that we have policies in place that really support our company, that are progressive, that really mean something to our team and the people that we have within our company. I think that to me I always am very concerned about that we're leading and we're looking after our people in a way that's super positive that will help support our company going forward, and help them today.

Megan: Excellent answer. Jen, thank you so much for being my guest today.

Jennifer: Oh, it was wonderful talking to you. Thank you for your time Megan.

Megan: Yes. I really enjoyed speaking with you and hearing about your experience, and all of the resulting insights. I appreciate you taking the time to be here with us today, and I wish you and Impact Health all the best. To our listeners, please tune in next week, and until then, take care.

Jennifer: Thanks, Megan.

Megan: Yes, that was awesome. Let me stop this recording.

[music]

If you're ready to boost efficiency and streamline your accounting processes at significant cost savings, it's time to talk with Personiv. Their people powered solutions have transformed the delivery of back office tasks and general accounting functions for decades. Partnering with clients to provide everything from accounts payable to payroll service. See what Personiv can do for you by visiting www.personiv.com.

You've been listening to CFO Weekly. Presented by Personiv. Please subscribe wherever you get your podcasts to hear all of our episodes. Want to learn more? Check out www.personiv.com. Thanks for listening.