Leaders of Modern Finance – Beyond the Numbers, Hosted by Jack McCullough ft. John Baule

On this episode of the Leaders of Modern Finance podcast, host Jack McCullough of The CFO Leadership Council is joined by John Baule, CEO at FutureView Systems

Learning the Basics.

John was given a thorough understanding of the fundamental principles of financial management from his undergraduate education and his early professional career. After finishing a degree at William and Mary University in Williamsburg, Virginia (the second-oldest university in the United States), John became a certified CPA and moved straight into work at KPMG Peat Marwick. His first professional role was as an auditor, and so he received plenty of hands-on experience poring over numbers and data. 

The majority of his supervisors in this first position were either veterans of the US Navy or married to Navy servicemen (a product of his proximity to Norfolk, a US Navy hub). John jokes that these supervisors treated him like a military recruit, with strict guidelines and write-ups for even the smallest deviation from those guidelines. While this is slightly tongue-in-cheek, John was nevertheless given a rigid structure and codified processes to follow. This framework was yet another opportunity for him to become well acquainted with working with hard data and formal systems. This time spent in Norfolk, and his first auditor role with Bristol Meyers Squibb, was a necessary crash course in the basic math of overseeing financial assets.

Despite the importance of his professional beginnings, perhaps the most formative time in John’s career would be his appointment as the Director of Finance and Administration for Bristol Meyers’ division in the Philippines. This transition marked a change in John’s financial approach in several very important ways.

Becoming Conversational

In the Philippines, the resources that John had become accustomed to working with were no longer available to him. While it was still early in the days of technology that could help with accounting functions, there was nevertheless a noticeable difference in the available infrastructure when John moved to Manila. This meant that there were no shortcuts in financial management. Whereas before John may have been able to plug the numbers into his balance sheet and walk away, in the Philippines he was forced to go beyond the numbers.

This new challenge came hand in hand with the tools to overcome it. Since John was no longer isolated in his particular role, but was now in a leadership position that gave him a bird’s-eye view of the whole organization, understanding the implications of the raw information in front of him was far more feasible. Now he was able to see the way financial assets and financial data affected other business functions and operations. This newfound perspective would come to be one of John’s favorite parts of being a CFO. The ability to see the broad strokes of the business and the interactions between various operations provided the kind of organizational knowledge that would help him steer his team through uncertain times.

With a more intimate understanding of the assets at his disposal, John got creative in his financial approach. He began focusing on analysis and the implications of data and their source rather than the raw data itself. It was this new focus that taught him a principle that stayed with him through the rest of his career: numbers are not the whole story, but the beginning of a conversation. It was under that mantra that he began interrogating the information he was receiving instead of simply entering it into a database. 

The success of this new approach is demonstrated in a brief story from John’s time in Manila. While selling infant formula to a distributor in the Philippines, John’s organization was consistently underperforming in the amount of revenue they were pulling. His supervisors in the US were initially tempted to slash advertising funds because this slump in revenue made them believe that the demand simply wasn’t there. John, however, wasn’t convinced.

He hired someone to go to the stores where the distributor was selling the formula, and mark down not only how many sales John’s product was making each day, but how many sales of the competitors’ formula were being made as well. John freely admits it was an imperfect method, but he didn’t need precision. He simply needed more information to work with.

After analyzing the data he got, John realized that the low revenue was not due to a lack of demand. The aggregate sales of all the infant formula products proved that people were in fact buying it, but John’s organization simply needed to increase the demand for their formula. He convinced his supervisors not to slash the advertising budget, but actually to increase it, and in the following year sales skyrocketed.

The disconnect between John’s and his supervisors’ understanding of the data was a validation of John’s new analytical philosophy of financial management. His creativity and his dissatisfaction with data that had no context allowed him to turn a sinking ship into a successful revenue stream.

Understanding the Business, Not the Numbers

John’s experience in Manila wasn’t just a stepping stone on the way to a successful decades-long career, but a learning experience that transformed his understanding of finance. He now wants to offer the wisdom he gleaned from it to future financial leaders seeking to build a more holistic understanding of their organization.

As John puts it, and as his story demonstrates, numbers are sometimes an obstacle to understanding a business, rather than an asset. To be truly successful, a leader has to go out of their way to learn more about operations, corporate structure, work culture, and the like, rather than just steeping themselves in data. The latter is only the beginning of a complex conversation, not the end in itself.

Viewing financial assets this way cultivates empathy and cooperation, according to John. After all, a conversation requires relationships. An accountant logging data in their office alone is not nearly as beneficial to the organization as the CFO conversing with various department heads about mutually accessible data and how it affects each member’s work.

When information is the launching point for company-wide engagement and creativity, the whole team wins.

This episode is brought to you by Stampli. The Most Powerful Way to Process & Pay Invoices. Stampli is the only AP Automation software that centers communications on top of the invoice so that accounts payable collaborates better with approvers, vendors, and anyone involved with purchases to quickly resolve issues and questions, resulting in 5x faster approvals.

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