Leaders of Modern Finance Ep. 26 – Building Systems and Relationships ft. Ryan Myers
On this episode of the Leaders of Modern Finance podcast, host Ken Boyd is joined by Ryan Myers, CFO of America’s Thrift Stores.
An Atypical Background
Ryan didn’t follow the standard path toward a financial leadership role. His pursuits prior to joining America’s Thrift Stores weren’t even business-related. Rather, Ryan had spent years studying music and had even gotten a degree in music from the University of Missouri. His career might have gone a very different way had personal commitments not brought him back to Birmingham, his hometown, and the headquarters of America’s Thrift Stores.
In the midst of this post-graduation transition, Ryan took a job as an operator at one of America’s Thrift Stores retail locations. Much to his surprise, Ryan found himself falling in love with the industry and the logistics that underpin it. What he previously thought was simply putting price tags on donated clothes was actually a much more complex process of inventory and data management.
While experiencing this wonder of logistics firsthand, Ryan was also getting his Master’s in Operations Management from the University of Alabama. He used the knowledge gained from this education to undertake a project with America’s Thrift Stores, helping to modernize and streamline backroom operations. His initial success with this project opened opportunities for him to manage the operations at multiple retail locations.
After only a brief time in this management role, Ryan was invited to the organization’s headquarters to take on work managing data and analytics across the whole of the business. Together with the Chief Accounting Officer, Ryan noticed discrepancies in the financial projections and the operational reality of the organization. The disjointed nature of the operations and finance departments was leading to inefficiencies within the business’s operations. Ryan used his knowledge of data systems management to incorporate operational analytics into financial projections and was given a role in leading the organization’s FP&A. After gaining more experience in financial standards through a partnership with the Chief Accounting Officer, Ryan found himself in his current role of CFO.
Ryan gained an understanding of financial management through on-the-job experience; it was his knowledge of operations and data analytics that made him such a promising candidate for a position in financial leadership.
Building Better Data Systems
When Ryan first began to work with America’s Thrift Stores financials, it became quickly apparent that the broad strokes of the budgets and projections were missing some of the finer details of the daily operations. As a retail business, America’s Thrift Stores were processing countless transactions a day, turning over their inventory in just a few weeks. They were receiving new inventory in an irregular and unpredictable fashion, with donations rather than inventory purchases.
There was nothing in the financial projections that took into account the varying prices that donated inventory could be sold at, the frequency of repeat customers, or the shift in purchasing across various seasons of the year. The broad trajectory of the budgets was correct but they lacked nuance and specificity.
To correct this, Ryan implemented a data system called Secure Retail, which has a sub-function called S-Tags. S-Tags function as a grading system, where retail workers can input the condition of donated items to account for size, damage, quality, and category. That information generates a barcode that allows for a centralized pricing system and hub for all other information systems. With this new data, Ryan was able to track what kinds of items sold the most, how often inventory was turned over, and see sales trends month to month as the seasons (and the weather) changed.
Secure Retail also allowed Ryan to implement a loyalty program that let him track repeat business. What this data revealed was that his customers’ purchase frequency was similar to that of an average grocery store: about three times per month.
Taken together, all this information revealed areas of operations that could be streamlined to capitalize on purchase and donation trends, rotating inventory in line with shifting sales across various times of the year. The level of detail these new analytics provided also made room for more accurate FP&A functions, harmonizing the budgets and projections with the operational functions on the ground.
Working together with his Chief Accounting Officer, Ryan brought his experience in operations, and his strengths as a data and analytics specialist, into the finance department to bring out the best of both fields.
Inter-Organizational Relationships
Ryan was not only successful in bridging the gap between the departments within his own organization, but between America’s Thrift Stores and other businesses as well. While most of the well-known national thrift stores are nonprofit organizations, America’s Thrift Stores is a for-profit business. However, they still want to lean into the missional nature of their nonprofit counterparts and so they partner with other nonprofit businesses.
As Ryan puts it, his organization is great at generating revenue. They’re a retail organization that does a high volume of sales with relatively low overhead and, with the newly streamlined business model, are successfully turning a consistent profit.
Their nonprofit partners, on the other hand, like Children’s Healthcare of Atlanta, are great at rendering a service. To maximize the impact of America’s Thrift Stores’ mission, they continue to use their internal data to maximize revenue and profit. They then donate a share of the funds generated to their charity partners. The amount of money donated is on a rate per pound basis, almost like a royalty. The more donated goods America’s Thrift Store receives, the more money is given to nonprofit partners. This allows each party to focus on what they do best and the synergy between them maximizes the efforts of both businesses.
In this way, these charity partnerships function very similarly to the way Ryan manages the operations and finances of his own organizations. Leveraging the strengths of each department and marrying their functions together served as a template for how to engage the inter-organizational partnerships that America’s Thrift Stores built.
This achievement of a value-centric mission was itself the product of Ryan’s understanding of data management. Using information to maximize efficiency has not only helped to build a successful financial system within his organization but also helped his nonprofit partners fully commit to their own mission with the support of Ryan and his team.
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