How Top Financial Leaders Stay Ahead in Today's Economy

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 - 00:00:29: Today my guest is Adam Ante. Adam is the CFO at Paycor, where he leads all aspects of finance for the company, including planning, accounting, treasury, analytics, and corporate development. In 2018, Adam was named to the Cincinnati Business Career 40 under 40 class. Prior to joining Paycor, Adam spent 10 years with Vantiv, including leadership roles in M&A, Investor Relations, and as the CFO of the Merchant Services Bank Referral Channel. He also served eight years in the US Army Reserve. Adam, thank you very much for joining me on today's episode of CFO Weekly.

Adam - 00:01:10: Megan, thanks for having me. It's great to be here.

Megan - 00:01:13: Yeah, today we'll be covering a multitude of important topics, including talent, the current economic environment, and the associated challenges, and changing priorities and strategies for remaining resilient and competitive. And I'm really looking forward to learning from you, so let's jump right in.

Adam - 00:01:29: Sounds great.

Megan - 00:01:30: First and foremost, tell us about yourself your career journey, and how you got to where you are.

Adam - 00:01:37: Yeah, absolutely. So, it really started in finance for me in my undergrad when most folks were going into marketing. I found myself enjoying accounting and corporate finance a little bit more. One of the things I really loved about the idea of corporate finance was really about driving decision-making and investment ideas and long-term investment decisions at the corporate finance level. And so, finance really gave me a lens to look into the business, to help make decisions, and then eventually I realized I could help guide both tactical and long-term strategic planning. So, it's been a lot of fun and it was a start early on for me as I sort of realized I liked corporate finance or fell in love with it. My first finance role was with a company called Fifth Third Bank, which is a bank here, a regional bank based out of Cincinnati. And I sort of fell into what would become a really big merchant services company that's now owned by FIS. And I found myself running a whole bunch of different parts of the finance organization within this division within Fifth Third Bank and learned about business services that I didn't even really know existed. But I was supporting new product investment. I was supporting investor relations and we eventually took the company public in 2012 I ended up running a piece of M&A for a couple of years and just learned a ton about business broadly. And again, really through that finance lens. I ended up rolling off of the acquisition team to run an acquisition that we had made out in Colorado. And so I spent some time trying to learn how to be a business unit CFO before leaving Vantiv at the time to come to the company that I'm at now, Parkour. And I jumped over there to run analytics for the firm as they were growing and looking to take the company to the next level of scale and eventually moved into the CFO role. And so I've spent the last 20 years really around all different areas of finance and treasury and analytics and corporate development and now at the CFO level.

Megan - 00:03:33: So as you look back on your career, are there any stories or moves that you made that really stand out in your mind as turning points?

Adam - 00:03:42: Yeah, so when I was in M&A for a couple of years. It was my dream job. I just absolutely loved doing deals and meeting new companies and then going through these acquisitions. We made this acquisition of a company called Mercury Payments in 2014. And I really wanted to be a business unit CFO. And led to this opportunity to become a CFO, but I really hadn't managed the business on a day-to-day basis like that. But I took the chance, I left M&A and I went out to Colorado effectively for like a year and a half. I had moved out there with the hopes of becoming the business unit CFO. And really after like six, nine months, I realized it wasn't working out quite like I had planned. And they ended up hiring a CFO to come in to run that business unit. And I ended up reporting to her. And man, it was really tough. It felt like I was failing. My family actually still lives in Cincinnati. And so there was sort of this question like, why am I doing this? Did I make the right decision? But it was a really good inflection point for me where I realized that the skills that I had and the things that I was working on, weren't the right, they weren't what I needed effectively at that next level where I needed to rely less on technical finance experience and a little bit more relationally focused with folks like the CEO there who I didn't have a great relationship with. And that CFO that came in that I worked for, she really helped me to see that. And it was a great opportunity for me, even though it felt like a failure at the time, sort of a jumping-off point to the next opportunity for me.

Megan - 00:05:11: Before your career in finance, you were in the US Army as a Combat Engineer. So talk to us about how that experience impacted your life and work.

Adam - 00:05:21: Yeah, absolutely. I was in the Army Reserves for eight years and deployed to Iraq in 2003. I wouldn't change it for the world. It was a big part of the foundation of how I sort of grew personally. I think the biggest thing that the military taught me was this opportunity to be part of something bigger than what I was working on. That was really important to me. And it was one of the great lessons I took from the military, of course, because I was just an Enlisted Soldier at the time. I had no big part to play other than to be a part of a team and a unit. And that was a great lesson. And it really translated ultimately into the discipline that I ended up bringing to every other part of my life, from waking up early to work out before work and the dedication of my family and the kids. It all comes from, I think, the early discipline that was instilled in me from the military.

Megan - 00:06:16: And talk to us a bit about Paycor and what it is that they do.

Adam - 00:06:21: Yes. So, Paycor is a software company focused on really building and empowering leaders to build better teams. And so we focus on software development to enable teams from talent attraction to hiring to talent management and everything around the people management services. And that includes payroll as well as compliance associated with payroll. But we're a 30-year-old company that's really in a fantastic growth mode. Over the last five years, we've grown from about $200 million to now over $500 million, $550 million of revenue, more than doubled the company over the last couple of years. And it's all through a fantastic leadership team that we've been working on and really accelerating our product capabilities, expanding nationally. And we've seen a lot of success that's been fun to be a part of over the last handful of years.

Megan - 00:07:11: And what are your proudest achievements since joining Paycor?

Adam - 00:07:15: Yeah, I think the number one thing for me that's been just, it's been great to witness to and to be a part of is just the fantastic team that we've put together. When I started, the company was going through its original sort of scale from $50 million to $200 million and really needed to build the finance team to the next level. And so we brought in the head of FP&A, right after I took over in the CFO role, we brought in a new controller who's now the Chief Accounting Officer and just the amazing team that's helped us to get through the last four years. We immediately went through COVID and everything that had to do with the labor market and our company was a pretty complex 2020 for us. And then we immediately jumped into the IPO and took the company public in 2021. And there's just no way that would have been possible without the great team that came to support Paypor and support the finance organization. And most of that team is still here four years later.

Megan - 00:08:13: And talk to us about the culture at Paycor. What is it that you guys value in your own workforce?

Adam - 00:08:20: Yeah, over the last handful of years, we've really focused on taking our culture from, I'd say like founder fun to a performance organization. And the culture was one of the reasons why I joined in the first place. It's a fun place to work. People really care about each other, they're community-focused, they're customer-focused and software-focused. And so there's a lot of collaboration and camaraderie. And over the last couple of years, we've taken that and really started to turn in more of the performance management side, which has been great because you have a lot of engaged, really strong, great place to work, strong workforce, super engaged, and now they're turning that engagement into strong results. And it's shown up for us externally. As we've taken the company public, we've just seen some really strong and consistent results over the last two years. And again, that's, I think, really driven by all of our associates who love Paycor, love each other, love the community, all the customers, all of the sort of silly things that you would say about culture. It feels really true at Paycor and we're turning it into performance as well.

Megan - 00:09:21: And I'm just curious, how do you grow quickly, go through an IPO, and keep it fun? I found in the past that as companies grow, somehow they tend to become more bureaucratic and less fun.

Adam - 00:09:33: Yeah, there are definitely places where we have to instill more governance and process. And they're not always the fun places, but it's usually driven by some sort of compliance and shareholder protection and all those important things. Compliance can put you in a bad spot, of course. And so we want to make sure that those processes work and that they're scalable and that we're fair and balanced. But at the same time, I think that as long as you really do care about people you're authentic in the way that you lead, and that you partner with your team and folks across your organization, I think you can still keep it fun. I mean, there could be, of course, times when you get just so big that it's hard to have one culture that has a little bit more fun and is not solely performance-oriented. But I think we've been able to strike that balance really well, really great performance. We hold each other accountable. We have just a lot of authentic people who continue to care about everybody at just a different level than a number or performance.

Megan - 00:10:29: That's great. So tell us how you guys are attracting top talent with the talent market the way it is right now. So tight. And yeah. So just talk to us about how you're attracting the best talent.

Adam - 00:10:43: Yeah, I think talent attraction is the number one issue that our customers hear. And it's one of the critical factors that we think about. One of the things that we struggled with in 2019 and earlier is that we're primarily Cincinnati-focused. And so we're in terms of our headquarters, we have a big associate population here in Cincinnati. And as we were growing, we were sort of outpacing the labor market in Cincinnati. And so we had a little bit more of a presence in like Frisco, Texas and Jacksonville and Kansas City, primarily through other acquisitions that we had made. But we started to consider other locations as we built out more of our operations team. Should we be somewhere that's more west-focused? Should we bring be somewhere where you have more talent associated with call centers that we could pull from or other universities? And what was really interesting about COVID in 2020, of course, is that that opened up everybody who wanted to at least you could go virtual. And so we went virtual pretty quickly. And that's been part of our value proposition to say, we can hire talent all across the US. And we've hired some really great folks from places like Chicago Seattle, and Phoenix that we just wouldn't have had access to. And that's happening all over the place. And I think on top of that, of course, our performance in the market as a software company has really helped us in those situations. So we're a software development company, virtually focused, and we're performing well. And we haven't actually had too tough of a time from a talent attraction perspective. We've hired probably more than 1,000 people over the last 12 months and grown from about 2,200 employees to 2,800 employees. We've been able to keep up with all of our expansion as we're continuing to add new sales, new product leaders, et cetera, all across the country.

Megan - 00:12:30: And as you continue to expand and grow, how do you make sure that you're hiring the best talent for each role? Because I imagine that the roles change along with growth. So how do you make sure that the best person is in each spot?

Adam - 00:12:45: Yeah, it's tough. I mean, talent, hiring, and talent attraction, it's got to be one of the more complicated. And low success rates, I think, or marginal success rates seem to be the going concern for most of my career. And I think one of the more important things that I found is that everybody, talking and thinking and talking about our value proposition, our employee proposition, and the expectations that we have for folks when they come in, we're talking about it consistently. And the expectations early on can be misconstrued or can be difficult for folks to really understand. Of course, as a fast-growing, seemingly, like a 30-year-old startup, when you come in, sometimes folks can get just railroaded or they don't like the pace or they don't like having to figure out new processes. So we're looking for people who have more of an entrepreneurial mindset and who are looking to come in and create, not just sort of take on processes. And that can be hard for sure. But we try to set expectations. We try to be clear upfront. Like in finance, we have a set of values that we work from and we talk about those values when we talk to applicants. And usually, that resonates with folks, and the people that it doesn't resonate with, they usually self-select.

Megan - 00:13:58: And let's switch gears a bit and talk about the current economic environment. So how has that changed your priorities or the CFO's priorities in general?

Adam - 00:14:08: Yeah, the last couple of years have been interesting to say the least. When we were going into 2020, we weren't, of course, thinking about COVID, and we had our plan laid out for the year, and we really had to switch up everything that we were working on. And I think that, at that point, it really highlighted how much flexibility we needed to build into our processes around planning, capital allocation, and operational understanding, all of those things needed to evolve to the next level. And so we continued to work on building more flexibility into our processes, into our planning cycle, into our forecasting, into capital allocation, better alignment, and continued alignment across our executive team and our functional understanding of the business. It's gone deeper and deeper and closer and closer together over the last couple of years. And I think, like, specifically, some of the things that we are thinking about continue to be technology. Technology is growing at a rapid pace, faster than ever. We're not even on a year of ChatGPT being a common term, and it's already evolved so much of how we think about technology where we're going to invest, and how we're going to invest in AI. And so those things continue to be top of mind for us as we go into the rest of this year and into next year.

Megan - 00:15:23: And what challenges are CFOs facing when it comes to managing financial risks?

Adam - 00:15:28: Yeah, the financial risks and broadly, I would just say, risks and broader macro market and related to the banking crisis and COVID crisis over the last couple of years, I think just highlight that things can change quickly. And there are more cybersecurity incidents than ever that the CFOs end up having to get into, I think, more and more. So we're getting into technology, we get pulled into things like talent management we get, which could be huge risks for the organization if you lose talent and access to talent. And so CFOs are continuing to try to manage across all of these diverse risks. And it comes, I think, first through the relationships that you have with the rest of the executive committee and your peers and how you can help them unpack those risks, identify those risks, and then make sure that we have the right sort of either reporting or management on the back end to step their own when we do realize those.

Megan - 00:16:20: And what strategies are CFOs using to ensure that their companies remain resilient and competitive during uncertain times?

Adam - 00:16:28: Yeah, I think that the best way to remain competitive when things are changing is to make you understand the levers in the business. And create flexibility in your cadence around decision-making and capital allocation so that you can pivot as quickly as possible. The more you know about the business and how the business operates and the fundamental operations in nature, you'll be able to make those quick, tactical decisions when things start to change and things are changing, of course, faster than ever.

Megan - 00:16:58: And let's talk about financial planning and budgeting. So what should a CFO be considering when it comes to these two things? I mean, as you've mentioned, changes, I mean, COVID taught us that change, we can't really predict what the future is gonna bring. So what advice do you have for planning and budgeting in an uncertain future?

Adam - 00:17:20: Yeah, one of the things that we think about when we manage our forecast is that we forecast every month and create updates for longer-term forecasts, which you might say longer-term forecasts are less valuable. But the thing that we actually try to build into it is more scenario understanding or sensitivity analysis around what key decisions and key metrics, how might impact the overall operations, and the financial performance. And so we try to be as flexible and as nimble as we can on our forecasting and how tightly we're tied to the business leaders who manage their respective functions. And then when we think about the sort of traditional budgeting process, which feels a little antiquated, we've tried to change that to more of a quarterly process. And I would say that we're not fully there, we're not fully where we wanna be, but when we can get to a more consistent alignment of clear capital allocation strategies on a quarterly basis where we can build more sensitivities into those analyses so that we can, again, pivot quickly when things start to change. I think that would be the sort of next phase for us. And we're slowly moving towards that. We have great visibility into the sort of month-to-month performance of a function. And we're continuing to move towards how we change the capital allocation planning cycle so that we can be just a little bit more nimble. But it starts with, again, great relationships with the peers and the folks who run those, who are chief product officer, our chief technology officer, as they're driving product investment, staying really close to them as we think about how quickly we wanna invest in the product, what are the next things we wanna do, and how we might pivot that and to the extent that things are changing for us. And then the technology that underlies that, I think is critical from the data and how you maintain and manage the data, who has access to it, and how quickly it's refreshed and updated. Those are critical pieces that we've invested a ton in over the last couple of years. We wouldn't have been able to do a lot of the stuff we have over the last couple of years without a lot of that early investment and ongoing investment in our data infrastructure.

Megan - 00:19:24: And then, during economic downturns, can you share some best practices that CFOs can use to streamline their financial operations?

Adam - 00:19:31: Yeah, I mean, as we think about downturns, I think they just tend to put more and more pressure on cash flow. And that's the first thing that we think about Is our capital structure set appropriately to withstand a potential downturn? And do we have the right understanding of the levers that we can pull when we need to make those changes? And so I think the first thing is, again, like understand the levers that you can pull, what the impact will be, and how long it takes you to pull those levers, whether that's on or changing how you're investing in your software, or maybe you have some sort of a PP&E that you're making investments in and capital investments. And when those explicit cash flows go out, of course, I think all CFOs are thinking about that. And then as we think longer term about scaling the organization, it's really around the technology that enables us on those key pain points. So places like for us are a billing infrastructure and our entire quote to cash or revenue systems, we continue to work to scale those so that they're not hang-ups for us so that we don't have to focus on development costs, so that we don't have to miss billing. All of that is a core technology for us that we are thinking more and more about in business processes. And that spans well outside of finance, from sales operations to billing operations in our customer service areas. So we try to be intentional about those bigger business processes as we think about long-term scalability.

Megan - 00:20:53: And I'm just curious since we're talking about scalability, but how do you know when you've outgrown a process or when a system is broken? How do you know when that happens?

Adam - 00:21:05: Yeah, I get, like most folks, just a ton of outreach on LinkedIn to sell me things. But I can tell when customers start reaching out to me because we've messed up their billing and they're reaching out to me on LinkedIn or we have a customer complaint because of a specific issue. That's when you can start to see that maybe we're running it. We have either a bad processor or our technology is falling behind. And so we evaluate stuff like concessions. So we'll evaluate concessions and say, what are the root causes of these? Do we see acceleration because of a certain area or a pinpoint that a customer is having? Do we have adjustments in billing that we're having to make that are rooted in technology? Do we have to spend too much on development? And does the amount of time it takes to make even business-as-usual changes, like changes to your pricing catalog? How long are those taking? And how expensive is it for us to make those changes? And those sorts of things start to point back to, like for us, it started to point back to our quote to cash and revenue systems. And so we started to evaluate that technology more intensely.

Megan - 00:22:05: And what trends do you see emerging in the CFO's financial management strategies and in the role of the CFO in general over the next few years?

Adam - 00:22:15: Yeah, that's interesting. I really thought that up until probably 2020 or maybe 2021 through 21, especially in software, there was a lot of growth at all costs, right? There are lots of companies, hyperscale, how do we sign as many deals as we can and accelerate the front end? And I think then you started to see more of a shift towards understanding the operational underpinnings of the business. Just a little bit more. I think that CFOs have always been critical to this, but over the last maybe two years, three years, it's really started to shift more towards you have to have a complete understanding of the operations from your pipeline to how you do software development and your deal cycles and supply scenes have become clearly a lot more important to understand. And so I think that you're seeing more and more CFOs take just broader responsibility and or if it's not complete responsibility, it's at least playing a bigger role working with the teams and the functional owners who own those responsibilities. And we're starting to get involved in more things like talent management. We've spent a lot of time talking about talent management and how critical it is to the future success of these businesses and employee engagement and how you drive engagement, in virtual work environments. And so I think more and more, you just have to be more flexible. You have to be willing to spend time with your peers on the key things that they're thinking about. And that's going to drag you maybe a little further away from the day-to-day balance sheet management as an example.

Megan - 00:23:43: And on a personal note, you're known to engage in rock climbing as a way to decompress from the daily pressures of work. So how important is it to maintain a work-life balance?

Adam - 00:23:54: Yeah, I think it's important. I don't know, I guess I'll figure, at some point, out what sort of balance I've been keeping, but I think it'll be, probably not the answer that I would have hoped for. I think that work-life balance is hard. It's more of, like work-life integration for me and I think for a lot of folks, especially when you're just laboring over the business. And most of us are like, super passionate about this stuff. And so you just become consumed by it, either because you love it or because you don't know how to get off the train. But finding some outlet, I think, has been important. And so for me, and one of the things I do with my kids is I coach them in baseball and we go, one of the cool things that we've done is go rock climbing and we all learned how to rock climb together. And we built a small rock climbing wall in my basement that we get to, we usually use like in the winter, but it's like a disconnect, right? So it's just this chance to disconnect and reset a little bit. And in that case, put in a little physical exertion before you get back to your desk. And when you're rock climbing too, your hands don't work on the keyboard. So you really can't do any work anyway, at least for a couple of hours.

Megan - 00:24:55: And last question, but as a CFO, what is keeping you up at night right now?

Adam - 00:25:01: Yeah, you know, I think that the number one thing is really cybersecurity. That's the thing that just scares me the most. Most of the things in the business around the operations and things we're working on, if we mess something up, we're going to address it, we have ways to do it, and we're going to fix it. And I think that we've had a lot of success there. But cybersecurity is something that can just bring you to a halt. And so we spend a lot of time working on that. We spend a lot of time thinking about it. And we have a great team that's focused entirely on it. We spend a lot of time talking with our board about it, and educating our employees about risks. And I think if anything, that's the number one thing that just sort of scares me.

Megan - 00:25:37: Yeah, I mean, it's amazing how frequent and sophisticated that has all become.

Adam - 00:25:43: Yeah, it's definitely scary when you start to see some of the ways that fraudsters are approaching and companies are getting attacked. And I think that management teams are doing, for the most part, they're doing the best they can. And it's just, you just got to stay on top of it. You have to have teams and like a CISO who is passionate about it and who eats and sleeps it every single day. And that's what we've been able to find. We have a great CISO and man, he knows everything about what's going on in the market and the things that he's able to eat. He cheers with me. They scare me. But thankfully, he's out there hunting on the other from the opposite direction.

Megan - 00:26:15: Adam, thank you so much for being my guest today.

Adam - 00:26:18: Megan, thank you for having me. It's been great to catch up.

Megan - 00:26:20: Yeah, I really enjoyed speaking with you and hearing about your experiences and the resulting insights that you've been able to share. And thank you for taking the time to be here with us today. I wish you and Paycor all the best.

Adam - 00:26:31: Yeah, thanks so much.

Megan - 00:26:33: And all of our listeners, please tune in next week, and until then, take care.

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