Episode #3

Building on Legacy: The New Finance Organization

Get energized because Joy Mbanugo, the Chief Financial Officer at ServiceRocket, is here to shake things up. Joy will to explain how the value of finance teams has evolved, new legacies are being written, and technology has taken giant leaps forward. Joy believes that finance teams need to be at the forefront of disruption, but how do we get there? Join her as she explores strategies to position finance teams for success in this ever-changing market.

"All the things are going on at Silicon Valley Bank. I personally don't think things are gonna get better. I think there are more banks that probably could and should fail — but that's me, personally."

Please note that the transcript is AI-generated and may contain errors. Podcast is not intended as advice and is meant for informational and entertainment purposes only.

(00:00:00) Chris: Welcome everybody to another CFO Trends. I’m really excited today to talk with Joy Mbanugo, who is the CFO at service Rocket Joy, welcome to CFO Trends.

(00:00:11) Joy: Thank you. Thank you for having me. I’m excited. I, I, I’m, I feel like I’m talking to a celebrity, so thank you for having me.

(00:00:17) Chris: likewise. Congratulations to you, you got your new role as CFO of Service Rocket. The conversation we’re going to talk about today is building on legacy, the new. Finance organization. I think you hear this phrase so much, and like to me I think there’s, there’s so much opportunity of finance leaders, CFOs, financial analysts, to really rewrite this legacy of what it means to be a finance professional.

(00:00:43) Chris: So what are the biggest areas that you see for finance organizations or CFOs to improve?

(00:00:50) Joy: Obviously forecasting right there, you can talk about forecasting until the cows come home. So I would say three areas. One, forecasting, two risks, and three, like just being like a strategic partner, strategic finance, and I’ll start with strategic. A lot of people are like, what does strategic finance mean?

(00:01:10) Joy: And it can mean different things to different people, but I’ll give what I think it means by way of an example. So I used to work at BlackRock in one of the, and I was on the tax team. You wouldn’t think tax would be strategic, but, and I will always refer to my tax friends and tax nerds because I think we, I think tax nerds get a bad rap and I’m a tax nerd turned CFO.

(00:01:31) Joy: But anyway, to make a long story. I worked for a really smart director who would always say, Hey, in one of your goals, try to come up with a goal that will improve the business or improve the bottom line. And so many times, like a lot of finance functions are viewed as overhead controllers, FP&A tax especially.

(00:01:51) Joy: But he was like, and I was on the fund side, so not on the corporate side, dealing with the entity. I was able to come up with goals that would impact the performance of the fund. I was in securities lending, the taxation of securities lending, so looking at finance holistically, like strategically, not just from I think when people hear strategic finance, they think of very narrow FP&A type adjacent lens.

(00:02:16) Joy: Let’s grow the business. But there could be a myriad of ways. Impacting the business in in a positive way, even if it’s cutting expenses, but being more strategic, not let’s just slash expenses. It’s what if we improve our tax rate? What if we earn more interest? So there’s a whole host of this, a whole host of ways of being strategic, and it just doesn’t have to be.

(00:02:38) Joy: Let’s improve sales, let’s improve margins. There’s so many other ways to be strategic. Secondly, I talked about risk. And honestly, I have to give credit to my brother, Michael Harper, who is a managing director at KP, who’s a nerd.

(00:02:52) Chris: Yeah, we’re all nerds,

(00:02:54) Joy: so I am too, but I am, and I like Star Trek cause I’m a big nerd.

(00:02:57) Joy: So I call my brother, I’m like, Hey, yeah, Mike, I’m a CFO. I’m, he’s congrats. The second thing that comes out of his mouth is, who’s your risk person? And I’m like, whoa, I just told you I just started this job. And like he literally is you got to have a risk person. And I’m like we don’t, it’s a privately held company, 330 plus employees.

(00:03:16) Joy: I’m like, we don’t have a risk person per se. There’s me and then there’s the general counsel and my controller. I think risk, looking at what happened with Silicon Valley Bank and just knowing what’s going on in the economic ecosystem. One person could say that’s economics. I would say it’s risk.

(00:03:34) Joy: And also, there’s a famous CFO, CEO, Larry Finger BlackRock, that was saying, you need to be a student of the market and you have to be, and I was just thinking my founder sent me something like, I need to be aware of what’s happening in the market like every single day. Not to the point of, knowing every minute and being antsy, but I need to be aware of what’s happening in the financial markets.

(00:03:53) Joy: And then three forecasting. And the only reason why I bring that up and it goes along with being strategic A and risk is you can do, I think with the tools that are coming out, there’s a lot of hyper out, not. There’s a lot around CFO F Tech. I have people email me all the time on LinkedIn all the time now.

(00:04:14) Joy: They found my email. I don’t even know how, I haven’t even been there that long. People found my email addresses Service Rocket. I’m getting pings and dings to review, whatev what I’m calling CFO F Tech. There’s like treasury planning technology platforms. There’s, dynamic forecasting and then there’s some that are looking at doing both and I.

(00:04:34) Joy: Finance professionals will have to know how to use those tools in the future. Gone. Are there days where you just use or, and I hope so, right? Because like I worked at Company’s are super painful. I wasn’t an fp and a long time and I will say what company, but we were doing stuff in Sheets and I was like, this is insane.

(00:04:51) Joy: Like why are we using Google Sheets and not a tool? Not that replaces good old-fashioned handwriting and figuring out how. How the business is going to grow and how to do forecasting and working with sales and sales ops. But I do feel like in, I have a podcast coming out later this week that I did with Service Rocket and NetSuite, or I’m using tools to help you with forecasting.

(00:05:13) Joy: So that was a very long way of answering your question, but that’s what I see on the horizons and for us,

(00:05:19) Chris: Joy for sure. And I love how you broke down those three elements and not one of those, like the thing I love the most about those three elements, right? Forecasting risk and being that strategic partner. None of that is what you talked about is Hey, go be better at learning Excel formulas or go be better in IFRS.

(00:05:38) Chris: 15 or go be better in the budget in for budget versus actual variance analysis. Right? Everything that

(00:05:44) Joy: Yes,

(00:05:45) Chris: joy, these are really the game changers, right? These are the, everything that we just mentioned, like those are table stakes for organizations and teams, right? And I think it, when we think about legacy and the opportunity to build upon that legacy, I’m not discounting to say those things aren’t important, but like when you talk about.

(00:06:02) Chris: Forecasting and strategic partners, that hits a whole other element. I love your story about being that strategic partner. And I want to start there and we’ll deep dive into these three, but like you said, everybody has a different version of what a strategic finance partner means, I know for me, when I think about it, when I look back over my career in leading high growth finance organizations and even also building Fresh FP&A, right?

(00:06:25) Chris: That’s one thing we, one of the guarantees I make to all the clients and prospects we have is we’re going to be the best finance partner that you’ve ever worked with. And if we’re not, I guarantee you and we’ll give you your money back. And part of that is saying that what it means to be strategic.

(00:06:39) Chris: Is like, how are it is the four Cs of what I call it. How are you being a great communicator? How are you building collaboration in the business? How are you turning complexity into clarity? And how are you building community, right? Like how are you doing all those different things? And as you mentioned, it being about a strategic partner and you broke it down and say it’s more than just the numbers, it’s more than just the reporting.

(00:07:01) Chris: Like you’ve got to actually get and know the people. You got to know the. So when you think about that legacy in terms of that strategic partner, right? Let’s like what are some areas or like common myths that you see like finance leaders face when they go start that strategic partnership with the business?

(00:07:20) Joy: Yeah, I think we’re going to talk about this all the time and. Hopefully my head of sales

(00:07:27) Chris: Hey, head of sales. Don’t listen. Don’t listen. Blackout. Mute. Mute. Head of sales.

(00:07:33) Joy: I think there’s a, there’s the way that finance people think and the way that salespeople think and act are totally different. And I think if you’re going to be a strategic partner away from a growth organization, and I’m just thinking selfishly about the role I’m in. I have to be a good, you brought up one of your four Cs.

(00:07:56) Joy: A good collaborator with sales, and sometimes finance folks think salespeople are just like, oh, they’re just out to make a sale. They’re just out to make a commission without even thinking oh, but this is the lifeline of the business. Seeds are the people bringing in the revenue? How can I be a better partner to them to understand one, what drives them?

(00:08:19) Joy: What are their intrinsic motivations besides just money? And then how can I also help them see like the traditional finance points of view, the importance of invoicing and pos and keeping expenses low so that our margins are high and if EBITDA is high and all of that. And it’s not just about bringing in a sale and a high commission check and it, the sales impacts everything all the way down to the bottom line, all the way down the net income.

(00:08:47) Joy: And so being a strategic partner and thinking about, okay, how can I empower? And equip you without just saying, if you come to me and you need an exception, or you come to me with an idea, or you need budget, or et cetera, et cetera. I’m not a partner where I’m just like, no. Or even in target setting, talking to salespeople when you’re setting targets instead of setting targets in isolation.

(00:09:11) Joy: I’ve seen it done a lot of ways setting targets in isolation, based off of some growth rate from the past. Whatever, and then turn around and be like, Hey,

(00:09:20) Chris: Yeah. Just feeding it down their mouths. Yeah.

(00:09:23) Joy: Here you go. This is what you need to do. Whereas some organizations do that and have a conversation with sales and sales reps and say, okay, let’s look at past performance and let’s have a conversation about what on the horizon.

(00:09:38) Joy: And then you can take two meth, take those two methodologies and smash ’em together. But you have to partner with sales and you have. Enable and unblock, like the one thing finance can’t be is a blocker. And I think I saw a post, maybe you saw too on LinkedIn where someone said, CFOs are like having a seat at the table and they’re not strategic and they’re thinking is backwards.

(00:10:00) Joy: And all they say is no to expenses. And I felt personally attacked for all CFOs out there. I’m like, no, we’re better than this. Like we’re strategic, like we’re about partners. We want to grow the business because we like getting paid too. That’s why we’re financing. You like money. So I think that’s one thing that the, as, especially in this current environment like finance folks, we need to spend more time in the business with the business, not just with our finance and accounting friends, because it’s safe there.

(00:10:26) Joy: I love talking to legal, finance and accounting because they’re my people. We speak the same language, we get it. You got to come outside of your comfort zone and spend some time with the

(00:10:36) Chris: Most definitely joy. The I love your mindset around that, right? And to all those VPs, CFOs, and finance professionals, right? Most of that new legacy that we’re talking about, right? It’s not about the skillsets, it’s about the mindset shift. Like the biggest rumbling and the biggest opportunities for superstar CFOs like you and others is.

(00:10:59) Chris: Don’t go to, don’t leverage that skill that you have. If you can manage that, and when I look back over my career, like in high growth SaaS businesses and high growth retail and e-commerce businesses, right? Sales were always my biggest partner. Like I, like one of the first people I wanted to meet and I made sure in every interview I was like, Hey, look like, yeah, I can talk with hr, legal, the C e o founders board, blah, blah, blah, blah, blah, blah.

(00:11:22) Chris: I can talk to all those people. I want the go to market, I want the marketing and I want the sales. Like I want conversations with them. And part of it, and part of it, me just doing that and requesting that even at the interview phase is like I wanted to build that relationship right out the gate.

(00:11:37) Chris: Like I wanted you to know that, hey, I’m not coming in and going to be the number police and say, hey, while you’re traveling $5,000 and not realizing that’s a multi-million-dollar opportunity, of the other phases that you talked about too, think about the opportunity to learn the business when you’re working with sales.

(00:11:54) Chris: Like these are some of the biggest skill sets and mindsets and just perspectives that I have throughout my entire career. I learned from salespeople. I learned how to prospect. I learned like one of the superpowers of CFOs is like not just information but influence, right? Having that opportunity to like influence and know you’re like influencing the decision, but you’re navigating it and you’re like finessing it and you’re putting that in there to know you’re like driving it.

(00:12:25) Chris: Huge value and opportunity.

(00:12:28) Joy: Yeah, for sure. I think that’s, like CFOs sometimes you can be very literal. I am on a lot of CFO type councils and for various ages and ranges and it’s funny to see, not funny, but different industries, different ages and different demographics all have very different points of view. And you have the very, and I laugh, I call it the FP&A MOFs, you because that’s not my background.

(00:12:52) Joy: I’m a tax

(00:12:53) Chris: I love it, the FPNA gang.

(00:12:56) Joy: look they’re serious. They’re like, and I see all the posts on LinkedIn and I like ’em, and they’re all accurate and fine, but I’m like, oh, like this is going super far. And the thing is though, I want my, I have a senior director. I want my senior director of FP&A to be like that because I need that.

(00:13:14) Joy: Like I need the data, I need the numbers, I need the. However, we still need that soft skill of collaboration. And I think sometimes CFOs forget that because we’re so focused on the technical the numbers and you didn’t meet the numbers, so why didn’t you meet the number? And beating people up over the head where it’s how can we, what, where are you blocked and how can we unblock you?

(00:13:35) Joy: And who cares if you took a business class flight if you just landed a multimillion dollar? That helped improve margins because I’d ha I’d be happy to approve that kind of flight all the time. Now if you’re taking a, a business class flight somewhere out of the country and the deal is the same amount as the ticket, then yeah, I’m gonna be yeah.

(00:13:52) Joy: Then I turn it to a very crazy, see, I feel like, what that make any sense? And then all the whole team is up in arms. But, I think we should think about it outside of our silos and think more about collaboration. Being an un blocker.

(00:14:08) Chris: I love that. Like CFOs like being a seat at the table where we’re not like ordering the food and like checking every ingredient, but we are partaking in the meal. Like that. That’s the legacy. And I think a lot of finance professionals, a lot of CFOs, a lot of people that are going to be listening to this, they may have that challenge of having that seat at the table, right?

(00:14:27) Chris: They’re like, man, I’m stuck in my career. I have these great ideas, but nobody listens to me. I’ve been there that point in my career, right? Coming. Through leaving accounting, going into FP&A where I had all these great ideas and I didn’t have that ability to be able to do it. And I think one thing that really helped me like cross that chasm is getting outside of the finance organization of what you talked about, right?

(00:14:49) Chris: Like how can I build my influencing, how can I bring my presentation skills? One of the key like. Opportunities for all of those people is change, decrease your level of skill adoption, increase your level of service adoption. Like, how can I not, how can I serve you with the chief filling officer?

(00:15:08) Chris: Like, how can I put my feeling? How can I put emotion? How can I put that into it? And less about the figures and the numbers and how can I serve? That was the game changer opener for me. Joy is like once I moved away from not wanting to be the smartest finance person in the room, but just wanting to serve everybody in the room.

(00:15:26) Chris: Game changer, like that’s where everything opened up.

(00:15:30) Joy: huge. And I like you I like that line of thought. And one of the things I tell people is sometimes you won’t get the opportunity, like I had the opportunity to move into different teams. I have an accounting background, I have a legal background, so I already had a pretty broad experience minus, won’t get the F P N A mafia started, but, Sometime in FP&A, but to get to that point, one of the things I said to someone, especially in startups, and even in public companies, sometimes you can just do, if you go ask a friend, depending on the level you are, let’s say you’re both, analysts, senior analysts, senior financial analysts are a controller or.

(00:16:11) Joy: You can’t, if you can carve out time to help solve someone’s problem, someone has a problem. You have a friend in sales, you have a friend in sales ops. Oh, we’re always blocked here. We can’t figure out pipeline or, the tool we use for pipeline doesn’t make sense. Or finding an in to, like you said, serve to help someone solve a problem that you might be able to solve, whether you’re accounting.

(00:16:36) Joy: FP and a whatever, economist, whatever your background is, pro project management, like talking to someone and understanding where they’re coming from and where they’re feeling pain and finding a way to be helpful. That you’re right. That is a game changer because then that person’s oh they’re an ally.

(00:16:55) Joy: Like they’re not, I don’t know if there’s an enemy, but like gangs in Gangs of New York always call like different functions and different companies can operate like gangs of work. Like you got this one and that one. But if you bridged, like you said, cross the chasm, great. Look, if you take the time to understand someone’s pain points and reach out to them and say, Hey, let’s chat, maybe I can.

(00:17:16) Joy: Just do it. You never know why. You may get to the point where nothing comes of it. I’ve done a couple of times and nothing came of it, and sometimes I didn’t have the time to invest in it, but you’d be amazed what could happen and what kind of allies you get and who you can find indirect ways to get a seat at the table from the most unlikely from the most unlikely

(00:17:39) Chris: it. Joy and I think like one of the points that you talked about, right? In building that legacy, right? I think legacy thinking for the finance organization has always been, we have solutions and we’re finding problems, right? Oh, we got all the solutions. Let’s go find the problems that solve these solutions.

(00:17:54) Chris: Versus what you just talked about, flip it the other. Go understand the pains, the frustrations, the challenges then serve in providing the solutions, right? It’s, that’s the, that and to me that is the mindset shift, right? That is building that new legacy. It starts with, and I love your point and to all those people listening to this, right?

(00:18:15) Chris: Like I always looked at it in like professional development. I had a good mentor. He always told me, he’s like Chris, 80% of everything that you’re going to learn in your career is not going to come from the C P A exam. It’s not going to come from your MBA, it’s going to come from you getting that practical experience and going to do it right.

(00:18:32) Chris: And one thing I’ve always done, even with my fresh fp and a team now is like I set quarterly OKRs for it. And those OKRs, we find one to three projects that we go work on inside the business that either builds a better partnerships, builds better efficiency drives accountability on the top line, or we go find those opportunities like.

(00:18:52) Chris: Go find those passion projects that you can have inside the organizations, understand the pains, and then serve through the solutions. Like that framework is a game changer in terms of building that new legacy and that mindset that CFOs and finance professionals need to have for the future.

(00:19:09) Joy: yes. Yeah. Gone are the days where you can just provide financials, budget, tax, actuals. Here’s a performance. Gather all the data from the teams that report up to you. Like you. You need to be a thought leader.

(00:19:22) Chris: Yeah. And to me, I, that talk, I think that hits on your first point where you talked your second point about risk, right? I really love that your brother gave you that. And the first question he asked you was like, Hey, what’s if he didn’t ask you, what’s the status of the business?

(00:19:34) Chris: What’s your cash burner runway? Like, how does that look like? He’s no. How are you looking at risk? So Diving into that, right? When we look at the macro environment, we look at what just happened with Silicon Valley Bank, signature Bank, first Republic Bank, the hopefully we’re in a more stable state in terms of like financial institutions.

(00:19:51) Chris: But that’s a great question that how are you making sure you assess your risk? So to all those CFOs out there in high growth businesses, or even at larger businesses, Building, building that pillar of risk, how can CFOs, VPs of finance and finance professionals bring that risk element in terms of how they’re building that legacy for the future?

(00:20:14) Joy: Yeah, I would say it’s like doomsday planning and my current c e o, he doesn’t like, he’s like joyer language. He’s you got to get rid of that big tech language. He’s no one’s dying. And I’m like, let’s do a pre-mortem and then we could plan. And he’s like a pre-mortem and he’s just you know what?

(00:20:31) Joy: If we do a retrospective or a prospective, and I. To totally different way of thinking, which is a whole other podcast for another day. But I think if you take a step back, so I’m also, I also have a background as a lawyer, I never practiced, but I went because I knew I, I went to law school because I knew I was going to be in tax.

(00:20:50) Joy: And one of the things, lawyers always care about risk and they’re thinking of ways to mitigate risk. And I would say think about everything that could go wrong at any given. And think about how you can protect the business. And I think this is where the CFO and the GC have to be besties, right?

(00:21:09) Joy: During the pandemic, people were probably thinking about a whole host of d e i issues and or location issues, which are continuing, like the look I’m working on workforce planning location strategies continue to be an issue because you have people moved around and then they were getting paid.

(00:21:26) Joy: Salary based on this location and they moved here. And then you have all these interesting kind of dynamics that change. Or you have the people who game the system and who may really live one place and then they have an address another, and you have to think about risk, does that sound smart?

(00:21:42) Joy: Yeah, it sounds smart. Yeah. I want to be, yeah, I want to live in, a state with no tax and get paid my California salary, but that’s not going to happen. I think from a risk standpoint, thinking about in the moment, like what’s going on in the economy, what’s going on in the environment, what’s going on in your particular business, and thinking about what can go wrong and planning for it, right?

(00:22:06) Joy: Don’t see, when the whole thing’s, all the things are going on at Silicon Valley Bank. I personally don’t think things are going to. Better. I think there are more banks that probably could and should fail, but that’s me personally. If you look at their leverage, if you look at home, what they’re invested in, like they’re just over levered.

(00:22:23) Joy: Which if you were a pers person, an individual, you declare bankruptcy, but that’s another story for another day. I’ll go into that, but I was texting with the, with my c e o, like at six o’clock in the morning on a Saturday. We didn’t bank there, but just thinking about okay, we saw this happen at Silicon Valley Bank.

(00:22:45) Joy: We are seeing the knock-on consequences at other banks. What can we do to protect ourselves in the future? And it’s not about let’s run and grab our money out of this bank and put it in that bank, but let, how can we futureproof the company? How can we, again, I also have a treasury and capital markets background.

(00:23:04) Joy: So my first line of defence from a risk standpoint is, Planning for the future and preserving a little bit of cash. Not just, and we’re not a VC backed company, we’re not PE owned like a lot of players in this space. So right now for me, it’s more protecting the cash for the shareholders and the employees, because those are the shareholders.

(00:23:23) Joy: And so that’s my, right now, that’s where my mind is from a risk standpoint. But it would depend on what’s happening in the market. If you talk to me, if I were a CFO F back when everybody was raising money, Pro my risk thoughts are my risk appetite and my risk strategy would be different than what it is now.

(00:23:42) Joy: But now I’m all about capital.

(00:23:44) Chris: Definitely. And I love that idea of risk because I had a good friend ask me, he’s another fractional CFO his name is Terrell Turner at the TL Turner Group, really great friend of mine. And he said, is it the CFO’s job to be aware of all the like macro financial trends? And I’m like, of course it is.

(00:23:59) Chris: I have Google alerts set up on my phone that it’s like bank or like keywords that go on, right? And it talks about to the point that you mentioned of. One of the things that we did at Fresh FP&A is when Silicon Valley Bank happened, we had a couple clients. We were able to get them proactively out in time.

(00:24:15) Chris: I’ve always believed in having a diverse treasury management operation, right? Have two big banks, have a local, have two local banks that you can call up on the phone that just want your business, have multiple redundancies of like processes and sweep accounts. And like I’ve always believed in that because earlier in my career, I got burned at a high growth business where we were reactive and we’ve always advised our clients, but Joy, one of the things that I seen was like there were so many high growth businesses, founder led CEOs and business owners that didn’t have that plan B, they didn’t have that plan B at all.

(00:24:48) Chris: And they thought at the moment that they had that strategic finance leader to say, here’s what we need to do, here’s why we need to do it. Here’s when we need to do it. Here’s what I need from you. Here’s that cadence and that f. And there were so many businesses that we helped them migrate and set up that diversification and part of the risk.

(00:25:05) Chris: And I think this is where, a lot of CFOs, and I’m, I struggle with this, right? Once my mind goes, I’m thinking through 80 different scenarios and I go into planning supply plan, like scenario planning mode. I need to sit back and say, all here are the top, like here are the top three, what could go wrongs?

(00:25:20) Chris: And I learned that from my audit days. Like what could go wrongs? What could go wrong from a control perspective? And if that happened, what’s the eventuality? What’s the risk? What are the mitigating controls or plans that we have in place that if this eventuality happened, And then another thing that I’m starting to do with clients is I call it running these wartime scenarios where it’s like we get with them and we’re like, okay, what if we got hacked in our bank account and we couldn’t pay payroll?

(00:25:44) Chris: Like how would we be able to do that? And you do these, like in the military, they run these like wartime scenarios where it’s like,

(00:25:50) Joy: Yeah,

(00:25:51) Chris: If this happened,

(00:25:52) Joy: I love it.

(00:25:53) Chris: I, I advise our clients and we run that with them. We’re like, okay, what if you lost this key customer that’s 30% of your revenue? What would happen?

(00:26:02) Chris: What would happen in the HR plans? What would happen in the finance plans? What would happen? What would happen in the forecast? And just run these wartime scenarios. You’re prepared for the business. If that eventuality did happen, it’s like being in school and they always test like the fire alarm and like you’re in class and it’s what if this happened?

(00:26:20) Chris: What are we going to do? I think CFOs as a game changer. We need to be doing that in our businesses. We need to be doing that and running these world time scenarios, because the benefits you get from it, like you’ll see the gaps, you’ll see the leaks, you’ll see the where yet we’re not weak at this plan right here, like this contingency didn’t work at all or this didn’t happen.

(00:26:41) Chris: And you’re able to proactively identify that versus that eventuality coming and you’re left to be. The time, energy, and effort. A lot of these businesses were spending to get like that diversified, just in treasury operations. And as CFOs.

(00:26:55) Joy: Yes. Yes.

(00:26:56) Chris: mentioned the first point that you said we have to have strong like legal partner, general counsels, like you got to be at the hip.

(00:27:04) Chris: You guys have to be there, right? Like you have to make sure you have the contracts and the language in place on the front end, but that risk element, I love that your brother asked you that because as walking into a CFO row, right? Like I would’ve asked you was like, Hey, what are you most excited about building?

(00:27:18) Chris: Like I would’ve been, I’m the optimistic person, but he’s no. How are you preparing for the doomsday? What is the war like? How are you preparing the doomsday scenarios?

(00:27:26) Joy: So in, in background, why, and it’s funny you mentioned like military. My brother, it’s ex-military, he went to West Point, he’s a captain in the army. Yes, he’s very like, logical, methodical and I’m an optimist. I don’t know if you can tell, but I’m chatty and I’m like, oh, yeah, fine. Somebody asked me to take on a new department.

(00:27:44) Joy: Sure, fine, I can do it. I say yes and figure it out later. And I’m glad he said that because it did make me stop and think okay, outside of Silicon Valley Bank what ha, what would happen? I like your wartime scenario. I called it pre-mortem. I’m not, I don’t know.

(00:27:59) Chris: Yeah maybe not the right word. Like maybe just.

(00:28:02) Joy: i, no, it is, I know what you mean, but I gotta find a term for it that is appropriate in the service rocket culture.

(00:28:08) Joy: Because EO will be like, oh, joy, what is this language? But I like that thinking of, it’s like scenario planning, right? The different type of scenario planner for our FP&A friends. Cause you know, I like to give them a hard time. Scenario planning and thinking about, okay what if it’s almost what if, like hypotheticals, like what if we lost our biggest client?

(00:28:30) Joy: Then what?

(00:28:31) Chris: Yeah.

(00:28:32) Joy: What if.

(00:28:32) Chris: And I think those scenarios too, joy, like I, run that with clients that we work through, right? And we like what it does. What it’s doing is pressure testing the framework is pressure testing the people. It’s pressure testing your systems. Like I and these don’t always have to be like negative kind of things that happen, like a wartime scenario that we were in with a re a large retail client that we serve is you doubled your customer volume.

(00:28:56) Chris: What would that mean to the systems? Like how accurately like business boomed overnight. Which a lot of high growth businesses, it could do that. It could do that in a week. You could go from doubling your client sizer and then now like, how’s it, how can our systems, how can our people, how can our infrastructure, how does our data, how does our technology, how does our platform, how do all those things, if that happen.

(00:29:17) Chris: And you’ve got, you got HR in the, you got operations in the. Tying back to that first point, you’ve got the entire business like running these scenarios of what happened. It’s man, if I seen this right, and like you, it, it gets outside of just the skill of the financial model of doing it.

(00:29:34) Chris: And it actually gets to the people. Cause it’s hey, VP of sales, you just got you just hit your goals and you just double, we just doubled our client size right now. I drop. Two x amount of contracts in it right now. How could you service these? How could you service these leads?

(00:29:48) Chris: Could you actually do it right? What.

(00:29:51) Joy: Yeah. We, and I work in a service like I’m a CFO of a service-based business. If we doubled our contracts, that would be awesome, right? First of all, I’m going to be excited and then I’m going to be anxious and nervous, because I’m be like, Oh my goodness. Are we adequately staffed to even take on the amount of work that we have?

(00:30:07) Joy: And yeah, it doesn’t have to always be negative. It could go either

(00:30:10) Chris: and I think that’s a great hack for all those CFOs out there. And like talking about your last point in forecasting, right? You talked about it where technology, I think forecasting right now is I have a love hate relationship with forecasting because I think a lot of the legacy that finance has brought to forecasting is like, Hey, let’s go do our five month budget, forecast budget and we’ll spend all this time and we’ll spend four months in doing it.

(00:30:34) Chris: And then outside of the four months, everybody’s looking at that budget and being like, this is completely worthless. What do we do? This doesn’t even make sense. And I think. Building the legacy of finance, right? Like that forecasting needs to be more agile than static, right? And it needs to be focused more on Hey, know your business.

(00:30:52) Chris: Too many CFOs and CEOs that I know here’s the reality. They’re measuring like 50 different things, right? And I always go back to that c e o and I’m like, Hey, okay, so you got 50 things that you’re measuring to be good at, right? If you break that down into a quarter, that’s a little over, call it 12 o 12 factors that you want to get better in a quarter, right?

(00:31:11) Chris: That’s 90 days that you’re trying to get better. 90 divided by 12 is I’m doing math on the fly. That’s eight or something, right? No, it’s seven. You got to get seven OKRs better almost every day of the week. Like how’s that even possible to do that? Like how are you even able to do that?

(00:31:26) Chris: So when you think about the legacy for finance, bringing that new insight to the new finance organization around forecasting, maybe it’s technology, right? But getting back to that collaboration aspect of it, how can CFOs bring in that new legacy for the finance organization around forecasting?

(00:31:44) Joy: Yeah, I, one of my goals. I don’t know if it’s a OKR, is to think about dynamic forecasting, because I agree with you. You can spend months and months coming up with a great plan, and then no one cares and no one goes back to it. Or finance is the only team that cares, or there are no consequences for not meeting targets or whatever.

(00:32:06) Joy: And I think. We need to be a bit more flexible in how, one, how we do it. It doesn’t have to be the traditional way of doing it in sheets. There are tools that we can use if you’re open to it, and I think technology, everyone’s going to be like, go use ChatGPT. Now first of all, I’m not going to be putting confidential data in a tool where I don’t know where it’s going.

(00:32:29) Joy: However, I do think that technology and some of these tools are super neat. My husband is a control. And he showed me something he uses and I’m like, oh man, I won’t say the company becauase I, I can’t endorse anyone publicly. But I keep looking at the tool that he is using. Oh man, I wish we could use that.

(00:32:45) Joy: And there are a lot of for, FP&A type tools and I think we’ll get to that point where we do that. There’s something in, I can’t mention that suite because that’s what we use. There is a tool that’s associated with NetSuite that does a little bit of forecasting, but I don’t know how dynamic it is.

(00:32:59) Joy: I haven’t dug into it yet, and I haven’t been in the role long enough to do that. But I’d like to get to a point where, not just me, because forecasting is not just, okay, what do we do last year? Let’s apply 5% growth rate, and that’s what we’re going to do this year. Forecasting to me and dynamic forecasting is, What did we work on with sales and with sales ops, and what did we as the company agree to that we’re going to do for, we’re going to, the numbers that, what did we agree to as plan for the next year?

(00:33:30) Joy: And then how do we need to adjust it depending on what’s going on in the world or what’s going on in the business, or do we need to adjust it or do we need to. There is something to be said for being rigid. Sometimes as a finance organization, if there’s certain targets you need to hit, you’re, if you’re accountable to a board within reason.

(00:33:49) Joy: So when I say dynamic forecast, and I don’t mean, Hey, let’s just change the numbers every day, every week, every month, but being able to look at it and look at the pipeline, because you talked to sales, you talked to sales ops, and that deal you thought was going to close in January actually didn’t close until June and.

(00:34:07) Joy: Adjusting the forecast for that and looking at it and looking at quarterly performances. Why are numbers off? Oh, because this big million dollar deal closed in June. It did close in January and now you, you understand the narrative and oh, by the way, you also, going back to your four seeds went back.

(00:34:23) Joy: You’re collaborating with your sales and sales ops friends so that they’re not like, they don’t feel like you’re just beating them up over the head because they didn’t meet their. You’re working with them to understand, okay, how do we need to adjust it? Because we’re looking at pipeline all the way from the interaction with the potential customer down to even the net income.

(00:34:44) Joy: So it, it’s a process and there’s, it’s like a journey. And I think sometimes people stop at one part of the stop at one.

(00:34:51) Chris: Yeah, and that aspect of forecasting, when you look at like the legacy that we’re building on top of, right? I think so much about forecasting from the finance organization. Was we’re on the C train today. It was commanding the business. Hey, we would give the business, Hey, go update this forecast and put it in your assumptions.

(00:35:09) Chris: And it’s just like we would push it out, command the business to go and excel or whatever tool, right? But.

(00:35:16) Joy: Yeah.

(00:35:17) Chris: legacy is about how do you like, there’s a, there’s anytime I think about forecasting, it’s just like a really key, and I’ve carried this throughout my career and carried this, how we work with clients at Fresh FP&A is if you want to move fast, move alone.

(00:35:30) Chris: If you want to move further, move together, right? And like when you’re walking through a forecast, like I’m sitting down with sales, I’m sitting down with operations, I’m sitting down with people. I’m making sure that we’re balancing precision and accuracy, becauase I think a lot of forecasting, a lot of budgets, it gives the business and it gives finance this false sense of confidence.

(00:35:50) Chris: Here’s my thing, joy, and I’m pre, I’m pretty sure we’re on the same page with this, right? Like I had a client say we need to do a 24 month like forecast, and I. Okay, I could do a 20-month forecast right now. Let me go put up numbers on a board and throw it at it. And we’re probably as equally like confident in what I say 18 months.

(00:36:09) Chris: I’m like, no, like what we need to have precision on, which is that 95% confidence level really in the next 90 days. Like how are we looking at the quarter? And when and finance are producing this plan, we give it to the business. We give that false sense of confidence, right? And we don’t ever go back and look at it.

(00:36:27) Chris: And I think another second aspect of it too is like what we talked about through this conversation, making it more collabo. Like when you’re sitting down and you’re looking at those, what, those scenarios and those what ifs that could happen that you mentioned, like sitting down and looking at, okay, what if this happens?

(00:36:43) Chris: What does that plan look like for cash, revenue, or headcount? And making it more about how you’re looking in I’ve always believed a hundred percent a rolling forecast. Get another month of actuals, have confidence in the next three months, have a little bit of confidence, directionally accurate in six to six to nine, nine to 12.

(00:37:00) Chris: Who knows what that’s going to look like? I think it’s making sure to set those right expectations up front with the business.

(00:37:07) Joy: Yeah I am, I’m an advocate of plant doing long range planning, but it’s planning, I’m, for me, it’s planning and it’s like looking, and this comes back to being a strategic partner. If I’m thinking two, three years out, I’m thinking about how the business can grow. How can we empower the business to grow?

(00:37:23) Joy: What’s in the realm of possibility, not accuracy, like I’m predicting in two years we’re going to grow, 20%. No, I’m not predicting that. What I am saying. Here are a couple of things we can do based on Plan A, B, and C, that here are paths we can go on, what we, what investments we need to make, depending on the direction we need to go.

(00:37:43) Joy: And I think sometimes when people build out plans, they don’t think about it from as if it’s a map. Like it is a map in a place where we want to get to, depending on what the company and the board thinks, versus this is a number we need to hit in three years. That’s insane. That’s saying go predict the stock market in three years.

(00:38:05) Joy: Go predict the price of Bitcoin. Is Bitcoin going to be a million dollars in three years? Nobody knows? But having a plan is very different.

(00:38:13) Chris: Yeah, for sure. And I think to me like, talking upon these like topics, I love how you mentioned all those CFOs out there, right? When we’re talking about building the legacy of the finance organization, of the future, forecasting risk and being that strategic partner, everything we talked about, this is the game changers.

(00:38:29) Chris: This is really how we level up. Our value. This is how we really leave that legacy. And to me, like every listener that’s going to go back and take away the insights that, and knowledge and wisdom, joy that you’ve been able to share with us, right? Just know you have the opportunity right now to really write what that legacy’s going to be.

(00:38:47) Chris: So my last question to you, joy, we ask every guest this what is your number one hot finance trend and why?

(00:38:56) Joy: Hot finance trend. Right now for me, treasury management, and it’s easy because the collab, the banking situation we’re in. It does, you know what, it’s a trend to me, but what’s interesting is I feel like I don’t see a lot of people posting about it. I feel like it happened and people are talking about it, but I don’t feel, I personally, and maybe you do tell me if I’m being crazy, but I feel like I don’t see enough people in finance talking about.

(00:39:27) Joy: Cash and capital preservation in these times. And for me that’s a, maybe it’s not a trend I’m seeing, it’s a trend I’d like to start. So I see a little bit of it, but I still see people talk about forecasting and EBITDA and all these things, and I’m like, but what about the cash you have right now? Like you’re talking to me about cat free cash flow, but what about the cash we have in the bank that is currently at risk?

(00:39:48) Joy: What are we planning to do with that? So if I could start a trend, I hope that’s a trend I could start, like I. Everybody was on that board and changing bank accounts and thinking about that. But I feel like I haven’t seen the continued conversation that would continue, that continues on. What are people thinking?

(00:40:07) Joy: How, what plans, what type of treasury management systems are you using? Are you using one at all? Hey, I don’t know. It feels weird. I feel like the conversation kind of puckered out a

(00:40:18) Chris: Yeah. I would agree. And one thing I always say, and I’ve always been a strong proponent in this, and a lot of it is coming up in high growth, like startup scale up enterprise level SaaS and technology, retail, e-commerce companies is I, I. Profits are a dream, cash is a reality. And like to all those CFOs right now, like if there’s two metrics for you to take away that you need to be looking at this is part of the two metrics I talk with and my team talks with every client at fresh FP&A cash burning cash runway, right?

(00:40:45) Chris: Because like none of this planning eight months out, 12 months out to, 24 months out, none of it matters if you can’t meet payroll next week, like none. Actually matters, right? Like the business doesn’t care that you just do this great exercise of 18 months and you didn’t make payroll, bro.

(00:41:02) Chris: Like what are you really doing? What is really the priority? So I would agree.

(00:41:07) Joy: Yes. Sorry, I didn’t answer your question. I felt like it was a trend and I feel like it died down and I’d like to, reinvigorate the conversation because I feel like more of us in finance need to be talking about capital preservation and not the juicy, sexy topics. We need to talk about some of the fundamentals.

(00:41:25) Chris: I love it. Joy. If anybody wants to find out, learn more about you, connect with you. Where can people, resources, give them resource, where can they follow you, connect with you?

(00:41:35) Joy: Yeah. The, so on LinkedIn if you just look me up under my name, joy Mbanugo, M B A N U G O, or if you go to my website it’s joymbanugo.com.

(00:41:52) Chris: Hey, and to Hi, everybody listening. Joy, it has been like I’ve been following you. I’ve been engaging with your content. It is absolutely an amazing opportunity to be able to learn from you, share this time with you. So to everybody listen to this podcast, I would definitely connect with joy.

(00:42:07) Chris: She’s a superstar. Congratulations on getting that CFO f o role and crushing it. I know you’re going to bring tremendous value to your team and organization. Thank you for joining CFO Trends. Really appreciate your time, energy, and effort, and all your insights there. I was sitting here taking notes and I took so much from it.

(00:42:25) Chris: Joy, it’s been an absolute pleasure.

(00:42:27) Joy: you.

(00:42:27) Chris: Cool. All right.

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