00:42:22 · CJ Gustafson, Paul Todgham
[00:42:22] S1: Is the savings list a trick question? [00:42:24] S0: There's several reasons why I do this exercise. I'll start with the last piece is that I think it builds leadership skill and collective trust over time. You're asked if it's a trick question is usually the first question I get from folks who've kind of been burned by finance before. Right? Like the people who surface the best ideas are the ones who get their budgets cut the hardest. This is a repeated game with a repeated leadership team and folks. So to me, it's really important that I'm honest about it. If we have our budget submitted on target, it's gonna work. And, you know, it helps that I'm working at a a growth technology company where I'd rather have us grow faster than eke that last 100 basis points of EBITDA. So it's not a trick, but I understand why lots of folks, you know, think it might be. [00:43:03] S1: Have you ever looked at what someone offered to cut and thought, wait, if if it's so easy to cut, why are we spending it in the first place?
00:43:03 · CJ Gustafson, Paul Todgham
[00:43:03] S1: Have you ever looked at what someone offered to cut and thought, wait, if if it's so easy to cut, why are we spending it in the first place? [00:43:09] S0: It does pressure test the thoughtfulness of decision makers' trade offs. Right? Like, as a CEO or as a CFO, it's hard to to scrutinize whatever your cost base is. You know, for us, call it a $100,000,000 or a $150,000,000 at any given detail. But understanding maybe that marginal $10,000,000 of choice, which is maybe sort the degree of freedom you might have in a given year and stuff, is really, really helpful. This also does allow you to test two things. One, just your skill of your team and doing these work. So if someone surfaces the really, gosh, that was a dumb idea, it's like, that's valuable, maybe they need a little more education, or maybe they're not the right person in the seat. As well as sort of, we do our best in FP and A to come up with targets for everybody, but we're not going to get it right. And you can tell by how hard or easy certain trade offs might have been made across functions that maybe actually we do need to reallocate in the company. We'd be better off if we, you know, spend a little less on our finance function and spend a little more, let's say, on our our product function. [00:44:02] S1: What makes a good surge? What characteristics do you look for?
00:44:05 · Paul Todgham
[00:44:05] S0: I'd say a good surge is it's typically something that you can see why the business would benefit from doing it, but you also understand why it's on the surge list. Because if it was such a great idea, it really should be prioritized and built into your budget from the start. Maybe a growth investment that's less certain or more likely to pay off in 2028 than 2027. Going into new markets is always an interesting and fun and challenging thing to navigate between a go to market team and a finance team. You can invest aggressively in year one and two, or you can try to self fund your growth more. Where you find yourself on that spectrum is often a matter of several factors. But the surge might be getting you just a little closer to more invest early and a little less self fund. Another one would be a marketing investment that's positive, but they can't fit into their current budget envelope. So I think a lot of finance teams struggle with whether to treat marketing as a cost center or as a profit center. And there's typically a bit of both. You want to get it to a profit center, but it really takes a lot of trust conviction, trust building across the teams, and conviction in what you're doing. I felt pretty fortunate that over the time, you know, I was at Levi Strauss and Company, I think we took them pretty nicely from sort of mostly a kinda cost center view and skeptical. And whenever we ask marketing what to do, the answer was always more marketing. Everything was some version of, you know, good to amazing, you know, activity to actually building a really good ROI model with the market intelligence team, making bets, then seeing if whether they worked or not, and tweaking and adjusting. So my north star is always, I want to get there at a profit center. But it is tricky, and it takes time to get there. While you're often in this sort of middle ground is what you've done is teams are stack ranking their initiatives or, you know, organizing their initiatives by the highest ROI to maybe the least certain, but you're holding to some cost envelope. So you've drawn the line somewhere, chances are there might be some initiatives below the line, but also still have good ROI. That would be a great example of a surge. Right?
00:45:47 · Paul Todgham, CJ Gustafson
They they couldn't have submitted that come in on target unless they could convince maybe sales to take their target up, their revenue up, which they might not have been... You know, had enough conviction to do. And so that's a good example of, like, you know, can we afford to sort of be slightly different on that curve, either make that investment or, you know, offset that investment with with a saving someone proposed earlier that in a different function that, you know, to the example you raised, hey. Maybe that isn't such a hard thing to cut. Why don't we do that to go go fund some growth? [00:46:14] S1: Paul, I'm gonna take you into our next section here. It is called asking better questions. It's brought to you by our friends at And let me tell you, the folks at they really ask the best questions. I'm gonna I'm gonna try to emulate that here. First one I ask every successful person on the podcast, what is an example of something you've screwed up on the job before? Could be here or previous role.
00:46:34 · Paul Todgham, CJ Gustafson
[00:46:34] S0: Forecasting. Right? I was in FP and A for a number of years, and and I approve our forecast as a CFO. You know, I missed a cash forecast at Ross as we needed to build more discipline and a a better partnership between Treasury and FP and A. Now, thankfully, we missed by having a lot more cash than we thought, which is obviously the better problem than the reverse. Yeah. We had to reengineer our forecasting there. And and and then a similar issue, you know, again, still fairly early in my finance career. At Levi Strauss and Company, we were planning the business on a constant currency basis, constant currency world. We were operating in a lot of different geographies. And the world was anything but constant currency in 2014 and 2015 with Brexit surfacing and the Russia Crimea affair. So I'd say forecasting is a big one. On a more personal work one, I think this is... I think lots of folks have this. But just sticking with an employee longer than you should have. Right? I think just believing that coaching would have made a difference or, you know, a little more time versus kind of doing the the organization and yourself a favor by cutting bait a bit sooner. [00:47:30] S1: Paul, if you could tell your younger self something knowing what you know today, what would you tell him?
00:47:30 · CJ Gustafson, Paul Todgham
[00:47:30] S1: Paul, if you could tell your younger self something knowing what you know today, what would you tell him? [00:47:34] S0: I think the quicker you can figure out what's kind of unique to you, like, in your career motivation, in what brings you energy, in your style, the better and more fulfilled you'll be. So I'm a pretty ambitious guy. You know, had some great experiences. But kind of resisting that temptation to take the next sort of logical step if it doesn't align with that. Moving to a smaller company for a better cultural fit. Right? That would be an example of maybe a non, you know, career linear move. Or even just a smaller one of, you know, I've learned to lean into how I present. I like to use humor. I talk pretty fast. I'm not gonna win any TED Talks, but I'm much sort of more comfortable in my natural style than in kind of the coached coached version. [00:48:12] S1: I love that. It's kind of finding what makes you unique and stacking those talents rather than resisting them. [00:48:18] S0: You know, if you have career limiting things, you should fix those. If it's some question of more sort of good to great or, you know, the best people do x, but there are other, you know, other paths to to y or you actually don't really want x. [00:48:29] S1: More of a technical one, can you walk me through your finance software stack? What tools does your team use to get the job done? [00:48:34] S0: We currently use Adaptive for financial planning, NetSuite for ERP, and Coupa for kind of POs, procure to pay. [00:48:41] S1: What's the most recent tool you bought?