Are You Solving Business Problems or Just Reporting Numbers? with Eric Alexander

You need curiosity about the business case related to the numbers you're looking at. You can't do good analysis if you don't understand what the business case is all about. I'm not talking about a formal business document. Maybe it's written out in a document, but I mean the operational business realities around what you are modeling. So that's number one, related to it, you've got to be able to communicate what you're seeing in the numbers. And that how you present it, it's how you put it on the slides, it's how you use graphics, it's the level of precision you use or don't use. It's the range, it's the point, think about your audience, you will optimize your value if you will strengthen your communication. Welcome to another episode of FPNA Unlocked, where finance meets strategy. I'm your host, Paul Barnhurst, aka the FPNA guy. In each week, I'm joined by thought leaders, industry experts and practitioners, who share their thoughts on FPNA and are helping shaping the future of FPNA. This podcast will talk about going from good to great FPNA. This week, I'm thrilled to be joined on the show by Eric Alexander, Eric. Welcome to the show. Paul, appreciate it, grateful to be here. Yeah, excited to have you. So let me start by just giving a little bit of Eric's background and let them add to that if you want. So Eric is an author speaker and president of six arrows consulting. He provides coaching, mentoring and advisory services to leadership teams of community banks and other mid market companies. His advisory work spans leadership, development, board training, strategic planning and transactions, finance, function, evolution, finance related regulatory challenges and deep analysis. Across nearly 40 years of financial management leadership, 20 of them in CFO roles. Eric served eight years as CFO of happy state bank, a six billion community bank in Amarillo, Texas until it's 2022 acquisition. He holds an MBA and is a CPA CFA and CMA, so we've covered almost all the A's a 2017 graduate of the stoneier graduate school of banking, ABA slash Wharton. He now serves on its faculty, along with the S W graduate school of banking at SMU, the Texas Tech School of Banking and the Barrett School of Banking. So if you're catching a theme, I would probably say it's banking. He's been published in journals, including financial management magazine and the journal of accountancy and speech regulatory at industry events. He also hosts the podcast Stewart leaders, not about us and his book stewardship readership for stinking accountants serving as the CFO and it releases this July. Eric and his wife live in Amarillo, Texas with six sons, six daughter in laws and 20 grandchildren. Did I cover it all? You covered it. Yes. And as far as we know, 20 is the current count. Sometimes there will be one in progress. We haven't heard about yet. But yes, we ended with the most important stuff, which is blessed to have a really, really good family at the end of the day. It's where the joy comes from after we finish here. I get to take my daughter to horse lessons. So I understand very good. All right. So I start every interview with this question. What does great FPNA look like? If you had to describe it, how would you describe it? I put it inside the context of one of the key things that happens in finance more broadly, which is information for decision making. This is a specialized form of information about consequential decisions that people are making. So it's quality of the information, which also means there needs to be an understanding of all the key business realities going around it. If it's just numbers, that's not helpful. Numbers that are done correctly relative to business issue and then communicated well to the people that need to make decisions, that's good FPNA. So you spend good part of your career as a CFO. So how did you make sure you had a good FPNA function? How did you think about it during your career? For a while during that period. Well, across the 40 year career, I've been doing FPNA related things for roughly three quarters of that. Sometimes is the analyst, sometimes working with other analysts. And then in one of my CFO roles, I was essentially the FPNA function. I was doing that as part of my responsibility. When I was at the bank in the second CFO role, same kind of thing. First there, I was doing it off the edge of my desk along with other responsibilities. But as we grew and I was able to make a case for the value of a strong function, we grew our own department. So I lived it up close and then was fortunate to be able to shape a department that was able to take it over and do the technical pieces even better. I came in the one of the Excel hot shots and then pretty soon my team outstripped me and they're showing me all the tricks and tips that they were able to do. I made sure they had the support and I made sure they were doing the appropriate reviews and made sure they were understanding the business case. So they knew how the numbers needed to fit in. Yeah, you're not the first person to say that right as you become more senior in your career and by senior I mean, move up the leadership ladder. The less and less you generally use Excel, not always, but as a general role, there's almost inverse relationship to your title and your Excel use. Yes, agreed. Every now and then I might still surprise them with some little function they weren't aware of, but yes, pretty soon they outstripped me. And Excel has moved so quick nowadays, right, you know, I do a modeling podcast and so that one there's a lot more talk of Excel and the tool today is not the tool of five years ago, 10 years ago, 15 years ago, as I said on a post once if you're using Excel, the Excel of 10 years ago, then yeah, you should get rid of it. But you shouldn't be using that learn learn all the great things that's added over the last decade and, you know, or hire somebody who who yeah, exactly if you're in a leadership role, bring in the technical person that understands the new tool because the hours saved if you have the technical skills and I'm sure you've seen it in your career are incredible. And that just frees up time to focus on the important part of F PNA, which is the analysis and the communicating to the outcomes. Yeah, I mean, I'm sure you saw that how did you balance that challenge because there's whether it's on the accounting side, whether it's on the F PNA side, there's a lot of reporting, there's a lot of regulatory, there's a lot of manual stuff, numbers not matching. How did you manage that and help people stay focused on what moved the business forward because right, you have to obviously the regulatory, you have to do a good job starting reporting. But you know, how do you find that balance of helping people realize yes, technical skills are good, but at the end of the day, this is all designed to help move the business forward. Often you would find that it starts with somebody who already has a technical bent, they have a general understanding of the business, in my group, it was coming up through, through accounting, the accounting part of finance generally, that was my own route, my own progression. If they don't understand the numbers, and there may be some nuances of the gap, for instance, that they, the accountants will know better, but they need to understand the numbers, whoever's doing the F PNA, doing the analysis needs to understand the numbers. But if we stop there, we're not delivering what the company's really paying for in terms of the output from that function. So I could see opportunities, this is not exactly what happened at the bank, I could see opportunities where you might have a broadening assignment, let's ship somebody over into another function where they can learn more of the business and then bring them back and they'll, they'll run F PNA. We're passionate about the quality of the data, but also the quality of the thinking around the data related to what the business is doing, if that's disconnected, we're wasting time, we're wasting cells in Excel, it's, we're bad stewards of the resources and the opportunities, if we don't have that fundamental understanding of the business case around the numbers. Something you said there, I want to drill into a little bit, you mentioned sometimes setting people out, you know, having them take a role in the business or learning the business, what's your view on that, especially for people in F PNA, do you think everybody should have some time working in the business, do you think, you know, it's really valuable to go out and have an operations role, or how do you think about that? I think if we make our objective to broaden the business understanding, there are a variety of ways to accomplish that, rotations through other functions can be powerful, I've never experienced that personally, never did that with my own team, sometimes it's because the person I have doing this is too valuable in this role for me to lose them for six months, we rotate them over in the loan administration, whatever. There are other ways to do that though, and a lot of it has to do with a collaborative perspective, a collaborative mindset, and it helps when business leaders and other part of the organization understand the benefit of F PNA, and we'll talk with my team about more than just the numbers, here's the problem we're trying to solve, how can you help us bring analysis that will help with that? The exposure to different parts may not be as intensive as being reassigned, but it can accomplish some of the same. And I agree, you can be put on projects, there are definitely ways you can learn other areas of the business. I tell people I think if they're able to take an external rotation, that benefit is incredible throughout this CFO, especially as you see now, and I don't know how prevalent it wasn't, you know, when you were a CFO, and it's been a few years, or in the banking industry specifically. But we see so many, especially smaller companies where the CFO is also the COO. They go sales force going to fray, they made their CFO the operating offer. They call it the chief operating finance officer. C-O-F-O. I think the F should always go in front of the O. The F is always the most important. Well, that's a given. Yeah. Hence why I'm not the operational planning and analysis guy. The S comes first. But you know, so I think that's just kind of invaluable now with more and more operational requirements to have that experience. Whether it's a role, whether it's your partnership, you need to actively seek it out, I think is the short answer. And it may be that there's not an assignment, a reassignment to another function that is possible. Still, you can actively seek out projects where they collab, there's collaboration and interaction with other functions. When I was at the bank, we did multiple acquisitions. We'd always form a cross-functional team. One of the things I observed through that is the connections, the connective tissue throughout the back office functions got really strong. We're working together, used to their personalities, their quirks, their needs, learning more about each other's business. Take advantage of that when the transaction is done. That collaborative network that's created, build on that. 100% agree. I was fortunate enough to work on the teams of a couple acquisitions or we closed them and then work on the integration. And that's an incredible way to gain deep experience and understanding other parts of the business. Because there's nothing like, oh, we've now bought them. Now we need to really, really understand them. I mean, obviously you tried to understand them before, but it's totally different when it's on paper and conversations versus. Now we've got to figure out how we bring Mary and Joe into the same team and their processes and we keep the customer happy at the same time. And it's also an application of a general principle of if I'm part of a process, a flow, value creation flow, it always helps if I understand what's downstream and what's upstream. Who's feeding me? Who am I feeding? Who's serving me? Who am I serving? If I live in my little silo by myself and ignore the effects upstream and downstream, I'm missing opportunities. And I'm likely creating value delusion or even destruction. I'm fully with you. I kind of 100% agree. So before we get into your book and a few things around that, a couple more questions I want to ask. But one I want to ask in general is I know you mentioned you came up through the accounting route. Many of the people you hired in FPNA came up through accounting. So what would you say to accountants? I get a counsel listening to show some time people that want to get into FPNA. What advice would you give them? Maybe they're sitting in an accounting role right now. I think AFPNA looks interesting. Any advice you'd offer them? Oh, several things. Making your interest known. And maybe even viewing it and pitching it as this is a broadening track or path that can help make me and my value, my contribution more value to the company. It's often it's easier to get a reassignment within finance that it is to jump finance operations, finance to technology, finance to sales. But so the one I had at the bank that turned out to be the one that ran the function came up the accounting financial reporting side. She then hired a couple who came up the finance side. One we brought. So you can have a couple of paths there. And I would encourage people in accounting, particularly if they have an interest in growing. Take advantage of that broadening. It can help set you up to create even if you come back into the financial reporting what you've learned there about the interaction the interplay of the numbers and also about reporting and giving analysis based on what you've done that that only helps you. So go ask, go make a case for it. That's a really good point. I worked with a couple of people that, you know, one had done accounting FPNA role. For a while back to accounting end of going into FPNA again and they were really good controller. Because they really understood the value of FPNA and they partnered really well. And then another he went from accounting, FPNA spent six months in it and said, I don't like making up numbers. The nice fact that everything ties out versus I feel like I'm just making up a bunch of stuff. I'm going back to accounting because I asked him if you wanted to be an analyst, I had a role open and he was like, no, I don't like that fake math. If you are driven to the point where your balance sheet and our balance sheets always need to tie out our balance, the debits and the credits always need to balance even in the models. But there are people that would do not have predispositions that would be helpful in FPNA. Yeah, I think you called it funny math instead of fake, you know, and I just kind of laughed and he was a fabulous partner on my guy, you stay where you're at, I'll find somebody else. Keep making that contribution. Let's not put you in a seat on the bus that's not best for you. So I think there's some great points there. Next one I want to ask. So obviously give some points for account and I think making your voice known, you know, even if you go back looking for those opportunities. What would you say somebody in FPNA that, you know, their career goals, they want to be in the CFOC. Obviously you got there. You spent nearly half your career in that seat. What would you say to someone wanting to be a CFO? It's very similar to somebody wanting to come into FPNA with a few extra pieces to it. You're taking the data, you're taking the numbers and you're doing an analysis to understand implications for the future. That's a big part of what what comes out of good FPNA function, especially like we talked earlier when it's wrapped inside the business case and I have an ability to communicate it well. The chief financial officer has to be able to do all that too. Now often it's in reliance on the people who are the controller owns the numbers. My FPNA person is my strong go to for analysis. I'm leaning on these people. I need to understand their world, their worlds and their outputs. In my leadership role, there's a whole different component of my role that goes beyond the numbers. It's the collaboration. It's the interaction. It's removing obstacles for people. It's dealing with politics. It's part of it's part of an organization. So my role becomes very different. I become in a way the steward of the processes that are serving the business. And then I'm also a communicator and chief for the business on all things financial. And I'm also a strategic voice at the table with the rest of the executive suite and the board about what does all this mean. And if I'm only bringing a numbers focus to those conversations, I'm not leading well because I've got a narrow focus. Just like I need my FPNA people to think about the business, I need to think broadly about the business too. So FPNA is a good launching point. The accounting is a good launching point. I love a path of accounting to FPNA and then you layered up with strategy, leadership. Now you've got a good path to start getting somebody headed towards a senior role. FPNA guy here and I'm really excited to tell you about an event I'm excited for. If you work in FPNA or enterprise planning, you're going to want to check out the EPM summit this November in Vegas. What makes it different is that it brings together the entire enterprise planning ecosystem software providers, implementation partners, analysts and practitioners for independent discussions, hands-on learning and real conversations about where AI is taking enterprise planning. If you're evaluating platforms planning a migration are simply want to stay current, it's definitely worth a look. It's November 16th through 19th at the Bellagio in Vegas. Who doesn't want to hang out in Vegas? Go to epmsummit.com/register to learn more and register for this exciting event. That's epmsummit.com/register. Yeah, having, I mean, whether you come up through accounting or not, you need that solid accounting foundation. Absolutely. No question. I like, you know, you level that up with strategy because you're going to be doing that in senior roles, which you should be. And then as you mentioned, kind of leadership and as you start to bring those together and there's other things that could you in a better position to be in that type of seat. So it makes a lot of sense. In a way, you never lose that strong technical foundation. The numbers, you may, you may not have to stay totally fresh on the latest. You need to know all the consequential gap. You may not need to know all the little gap that's, that's not affecting your business as much. You may not be the technical pro in your shop on the Excel. You definitely need to understand the outputs from all of those as they are germane to the opportunities and risks of your business. So as you're moving up the ranks, it becomes more and more about a broader outward and forward focus and a softer and softer set of really hard things, leadership, communication, taking good care of people, stewarding the culture, learning how to collaborate, learning how to disagree. So I think an interesting one learning how to disagree. What advice do you have there? I think that's one we all struggle with, at least I did. I still do. - It was like, right. I like to be right, I normally am, and I like it. I'm lucky. I love it. I ran across something in Peter Drucker recently. He didn't write it recently. This book was six, 1966, it's his classic, The Effective Executive, and I've used it with several of the folks, CFOs that I coach. His chapter on decision-making says, "Do not start by going looking for consensus. Cultivate disagreement." Now, I think that's really wise in this sense. I'm not looking to make an argument just to be difficult, but when we collaboratively are making a decision, if I don't give people space to raise questions and point out problems, we will overlook things that will come back and buy this later. Yes, we need to end up with an agreement on a path forward, but the whole idea of cultivating an environment that lets people disagree. Not to be difficult, but for the benefit of the wisdom that comes to the surface, I really like that. Now, disagreements when they get personal, when it's, you hurt my feelings, or you're cutting off my growth opportunities, or, hey, you like this person better than all those more emotional kinds of disagreements, we've got to deal with those two. For more, as we move up the leadership, it becomes a bigger part of our portfolio. But that other part, the decision-making disagreement, let's foster that. Yeah. So, I love how you said that. There's a great quote when you mentioned not getting emotional that I saw where someone they were reading an article, what someone wants to do, a great, I think it's called, "Top Gun Maverick CFO" or something, and number two was, "Hard-headed, fact-based analysis." And it wasn't stubborn. It was based on the facts, and this guy was saying it was like, "Remove the emotion from it, remove the people involved, lay out the facts, and let everybody have the conversation." And I mean, it's one of the things we teach all the time when I, like you mentioned coaching, I do some, of course, managing tough conversations. And the tip we give again and again is separate the person and the emotion from the facts. And agree to disagree without being disagreeable. And you know what I'm talking about. Yes. At the bank, one of our core values was HPA, Honest Professional Adversarialism. Not that you're my adversary, but we can have a conversation that seems adversarial in an honest professional way, we need to be able to do that. So Paul, you're saying this, I think you've overlooked this, here's some facts we need to bring to the table. I need to be able to challenge in a factual way. Now it also helps. Sometimes we, we quantitative ones, can get a little bit to wound up in our own numbers. And we will assert a higher level of value for our data than maybe it has. Sometimes we have numbers that are a little bit squishy. In those cases, it may be more helpful to say, hey, it's a range of this to this or my confidence in this number is not super high. If we always assert, if we're always hardheaded, this is the number and it's maybe squishier than we're pointing out, that's not helpful. 100% agree. And I love the point you said about psychological safety and really being able to have those conversations where look, we're on totally different sides here, but you can still recognize that and be friends after. I had a, you know, someone I was close friends with, not in a work situation, but we had lived together and we had worked together at one point. We were very close friends and I, him and I had a disagreement on something and we just, you know, we were going back and forth and just completely disagreeing with each other. I think at one point, even, and it didn't, I thought nothing of it, even called me stupid. That's just the way we talked to each other, you know, it wasn't in a personal way. Did he call you a panda? Probably. He probably did. And we got all done and I left. And this is the first time his wife had been with the two of us and she turned to him and goes, he's never coming again after the way you treated him. There's no, you don't understand him. He'll be back and, you know, because we both go each other, you're completely wrong. And I think at one point, even told me I was stupid and wrong. And I'm like, yeah, you're opinion, like, okay. And not that you should do that in work, but being able to learn to separate how the person fails about you, how you should fill about them from the situation is incredibly valuable. I don't think enough people are able to do it. I struggle with sometimes where you take it personal. And that's the worst thing you can do in a business situation where you need to optimize the outcome is to take it personal. And the worst thing you can do is to make it personal, which we bought. I've been guilty of it. I think we've probably all done it before. Thoughts on that or anything else to have there? Well, I had a colleague who modeled some of this really well. He would present a perspective and say poke holes in that, his name was Alan. He's a fellow, fellow executive. And I love the humility there of, I'll be open to my idea. I think it's a good idea. But tell me where I'm overlooking. What am I missing? Is there a factor I'm not thinking about? That humility and that openness to input, that that fosters the kind of conversations that need to go on? It's kind of like, and I'd love to get your thought, the idea of a pre-mortem, yes. If you've heard that, I mean, what are all the ways this can go wrong before you start the project? Yes. That could be really helpful. I'm a big fan of the post-mortems, the after-action review, the debrief, whatever we call it. But the idea on the front end, unless we spiral down into wasting time on trivialities. The idea on the front end of saying where could this process break and have a material effect? Where could this transaction go wrong? It relates to our FPNA analysis, too. Part of the value of what happens with FPNA is not just the numbers that come out of it, but the relationship of the business factors that play. We run scenarios so we can see if this could do this, what happens? We do this, what happens? We play with sensitivities to find the factors that have the biggest effect. Same kind of thing. We are looking for those pressure points that either are big risks or big opportunities, and that thinking on the front end, as long as we're disciplined, and we'll run down an occasional rabbit hole. Let's extract ourselves from that when we figure it out and go on and find the next material thing. That can be really helpful. Quick story about from the bank. The bank, when we sold it, was close to $7 billion in assets. Not big from a money center basis, but it grew from really small beginnings. And it was $2 billion when I started, and so quite a bit of growth in the 10 years I was there. Early on, we still had our external auditor helping write the financials. There are, I'm on the accounting side for a minute, not the FPNA. There are financials, but often in a smaller shop, the accountants will write them, and there are ours. Well, when I got in, I said, we need to start writing our own financials. So I pulled together one of my strong folks and said, let's think through the process of how to do this. Where could it break? How do we need to anticipate risks so we can prepare for that as we're developing our process? If she was adapted that, we were basically pre-mortem mean, if that's a word, while we were developing our process, we used that process or a version of that process for nine years till we sold the bank. She was also a strong one that I moved over and had her run the FPNA shop later. FPNA guy here. I want to take a minute and share something I've been working on. I've spent several months adding new affiliate programs to my website, by wondering why affiliate programs. Well, I can't train you on everything, but I can show you and give you trusted resources with exclusive FPNA guy discounts in many cases on my website. I have several of the top FPNA AI people in the world. I have the top certificate programs. I also have other programs like Excel, Power BI. I'm bringing you some of the top people that train in the world. There's Nicholas Boucher with exclusive discounts, David 14, Matt and Carl Sideman with exclusive discount, the top programs, FPAC, FMI, and more. So go ahead and check it out on my website. Sign up. Question on what program is right for you. Go ahead and message me. I'll get back to you, LinkedIn or you can email me. So go to the FPNA guy.com and check out my trusted list of resources for you to upskill yourself. Yeah. And that totally, that makes sense to me. One thing I want to touch on, and then I want to ask a question about your book. And I know we've talked about this today, and I want to get your thoughts on the whole idea of point estimates versus probabilities. And how should FPNA think about those two and kind of sensitivity scenario? What's your take on all that? Well, let me back up and talk about this first. I think about like a budget. Generally with a budget, you have a number. Our earnings, we are budgeting that our earnings will be this. We normally don't do that with a range. It is helpful though, and sometimes budget is part of the FPNA function. That's how we edit the bank. It is helpful for the business decision-makers to understand the range around that. We're budgeting this. It's based on these assumptions. If those change, here's what the outcomes could be. And the banking world, especially the interest rate environment. big deal. So one of the things that I think is really important in banking is we set our budget on the front end, that interest income, what we're making on the loans versus what we're paying on deposits, simplified, assumes certain things about volumes of both of those and also level of interest rates. If the interest rates are materially different, what would the outcomes be? Let's communicate those to the board so they're not surprised if we get halfway into the year and there's a change in the interest rate environment. Sometimes we miss a point estimate because we failed to pay attention to a number. Sometimes there's a totally unexpected outcome. Sometimes it's just there was a key assumption we had to make a decision about a number to estimate and reality turned out to be different. In those instances, that's one instance where I think it's helpful to give a point estimate within a communication of a range. If I were to think say about maybe M&A for a minute of what could be a range of outcomes on our operating income on the other side or maybe even what is a range of reasonable prices to think about or within a range of reasonable reasonable prices, what do they do to a variety of outcomes on our financials? Thinking about ranges can be a lot more intellectually honest where we have uncertainty about the incomes about the incomes because of the inputs. So it's just it can be more honest and there are sophisticated ways to do it. We can do some you can do just some simple scenario analysis inside Excel with the you know little table of these inputs and it gives these outputs or you can do the whole Monte Carlo thing where you run the thousands of different models with different assumptions. As long as you understand the outputs and you're able to communicate those well, that can be really helpful for showing when does a decision possibly go really really wrong. I may see all these things that look bright shiny and exciting, but there's this part of the range of potential output outcomes that's scary. Management needs to know that. The board needs to know that. Well said, I liked your point about sometimes it could be simple even as much as back in the napkin or a simple model or some tables. You know, the bigger the risk, the more the uncertainty, and you're going to have a pretty good idea when you're building it. The more you need sophisticated because that's Monte Carlo and full-blown scenarios and so I think sometimes we overcomplicate it and want to do it every every time. I get right to interview someone who's writing a book on the precision travel, which is like it's whole ideas. Accountants are designed to be precise. And what's happening now is we were moving a world where speed and approximate is more important than precise and slow. Yes, and it always has been. We just now have the ability to be over precise now because the tools are so precise. That's probably true. I think it's always been important, but I'd say things have got moved faster and faster today. So it's even more important if anything. So he's writing a book to help finance people understand your perfect model that's given to the CFO or the CEO a week after they made the decision. Doesn't do anyone any good. And I don't know how many times of every people say, yeah, as a CFO, I tell my team to go do something. And they come back to me three days after I'd already made the decision. I'm sure you experienced that more than once. And sometimes it's because we're worried about a factor that's not material. An input that's not material or we're worried about it. Like you said, to a level of precision that doesn't really make a difference. It drives me crazy. Board presentations where you have a multi-billion dollar balance sheet presented down to the nearest penny. Why? Yes, we pride ourselves and it's got to balance in the system. Great balance in the system. But when I show 12 significant digits, the brain shuts down. It takes extra discipline on the part of the decision maker to filter it down to what's really meaningful. Show it at $3.12 billion. That's what they need to know. That's what I say. Don't go to on billions. Don't go to more than two or three decimals. I would go to do maybe three if it's important. Yes. Now, sometimes that 10th of a percent, that hundred that we're talking interest rate environment for a bank, a basis point is material. Yes, you need to go out to the least two decimals on a basis point. No question. Yes, but even then it's only about four significant figures. So, yeah. Yes, yes, you can tell you hit one of my pet peeve. It drives me crazy. I will be interviewing them soon. I think, I'm not sure if this will come out before or not, but precision trap, also if Mason he's releasing a book on it. So he's written on the whole topic. It particularly to help accountants going into FPNA to realize you got to focus on what's material, what's important, what will help the business move forward. Not how do I be exact when you're never going to be exact anyway? Did you ever hit a budget down to the thousand dollars? No. We sold it with hit a GL category inside the budget. Yeah, 100,000 on your revenue for the full year. No, no, no, probably not. Right? No. And so, and often we're worrying about should I use 0.98 or 0.97? It made a half a percent difference. Who cares? That's why ranges get a quick answer, bucket it in some ranges and then ask them if they want you to dial it in because they may say I need you to be more precise, but get to them quickly and let them come back and tell you they want you to be more precise than be late with the perfect answer. That's that's helpful. Sometimes the iteration and the sophistication of the model can really be helpful. Based on these assumptions, this level of connections, here's what I've come up with. Based on what I'm seeing about sensitivities, I think I need to refine this. Do you agree? Can you help me get some business data that'll help us do that? The converse often, the conversation about it is more important than the exact point estimate you come out with on the other side. Almost always. I'd love to get your thought. Planning isn't about the budget number you come up with. It's the process so you're all moving toward a shared goal. Agreed. And the budget's also an accountability tool, particularly for those things we have control over. I don't have control over the interest rate environment. My branch manager does have root have control over how hard they work towards their loan and deposit goals. Correct. Exactly. And that's what you have helped. We can't none of us can control the macro environment. If you can, I'm taking you to Vegas. We're repyaring at the end of the week. So if any of my audience can, let me know. And if it takes you the end of the week, then you're a slacker. Yeah, but you know, I might you might take a show or two while you're there. I will not be able to put my notice for a couple days after so long. Oh, okay. That's okay. You got it. Yes. Actually, there's some places you'll make better money than if you go to Vegas. So that is true as well. All right. So I want to get to your book for a minute before we move into my standard sections or wrap up wrap up. So let's make sure I got the title right, steward leadership for stinking accountants serving as the CFO. That's close. Stewardship leadership for stinking account. Oh, that's right. I did say steward. Yeah. Stewardship leadership. Sorry about that. Go ahead. Let's not it. Okay. Serving as the CFO. So it's not a technical book. It's it's not a finance book. It's not just a leadership book. It's about leadership at the intersection of leadership and finance. And it's born out of my own experiences. Like you like you mentioned, I've been in the CFO seat. And it's it's not hey, Eric's been brilliant. Watch Eric learn from Eric. It's more I've been paying attention. And I've also I've there's a variety of business leaders I work with in respect that I pinged them for their thoughts about the role. And I have incorporated a lot of wisdom from others. CFOs or members, CEOs, audit partners, people like that. People I respect are helping feed the content in here. And it's about stewardship. I am convinced that stewardship is the key for effectiveness and leadership in any leadership role. It's especially the case for finance people. One of the key aspects of leadership is things have been entrusted to me. I am accountable to others for what's been entrusted. And fundamentally it's not about me. CFOs, we don't own the assets on the balance sheet. We just don't. We have responsibility for vast things that are not hours. And that's not to diminish it. That's actually to elevate the significance of the role. It's a significant role of trust. And it's really it's a nobling. It's exciting. I was having a conversation with somebody once and they said, and it's scary. Because we have to do it well. Other people are relying on us doing it really well. So I'm focusing on stewardship leadership. We talk about character. We talk about some of the key aspects of the role areas that are challenges and then some keys for effectiveness. And let me talk a little bit about the title because I get some funny reactions to the title. Okay, stewardship leadership. I don't think that's controversial for stinking accountants and it's stinking not stinking with the G, you know, I kind of like the G, but no, stinking. See, I wasn't an accountant. So I make fun of accounts. Stink will bet. There's the point. Do you know the difference between an F P and A professional and an accountant? So one of my favorite jokes. Go ahead. I need to add this to my repertoire. When an accountant gets creative, they go to jail. When an F P and A professional gets creative they get promoted. That's why I work in FPNA. I don't look good in pinstripes. - I had a boss that I worked for. We would be facing a business decision that had accounting implications and he'd say, Eric, isn't there a creative accounting way to solve this? And I said, Mark, that's the one class in my accounting program I did not pass. Actually, I didn't even take it. It was not one of the options. Now, he was actually asking a pretty good question. Are you sure we understand the rules? So we are not boxing ourselves in inadvertently. That's a really important question. As a steward, I need to know the technical pieces. - There are often judgment calls of how you choose to do something as long as you're transparent, forward and in lines with the guidance. That's what he's getting to versus, "Isn't there a way we can make this happen?" Which is very different when it's, "Well, can we just bend the rules a little bit and make this happen?" - We just manage these earnings. Can't we just hide these liabilities? Can't we just manufacture some collateral for this deal? No, no, no, that's unethical, that's wrong. He was not asking that. He was saying, "Do you know the rules? Are we sure we know the rules?" But I'm coming back to the point you said, you like to pick on and make fun of accountants and-- - I appreciate accounts. - Well, okay. - So that's the background for that part of the title. I worked for CEO who would call me Stinking Accountant. Now, he'd also talk about the Stinking Attorneys and the Stinking Regulators. And it was mildly disparaging and it was sad and fun, but it was also y'all are annoying. You just let us go do our business and get in the way. - You were, yeah, you were just something you had to deal with. - I had a colleague who talked about it, profit prevention, y'all are the profit prevention departments. Let us do our thing. So here's how I approach it. I'm not diminishing the role in any way. The role is valuable, the contribution we create is significant. We are serious about it. Not everybody, though, understands the value that we bring. And we don't have to be taking ourselves too seriously about a really serious role. So let's poke fun at ourselves a little bit. What we do is really important. Let's do it with Excellent. - I like it. Thank you for that. - One more when you kind of talk about, yeah, the whole kind of, working within the rules. I had a friend and I always loved this joke. He told me his brother was an accountant and his sister called his brother and said, "Hey, I need to avoid these taxes." And he said, "You don't want to avoid them. You want to overt them." And she was like, "Well, what's the difference? He's all about five years." - We need to know the consequences of what we're doing. - You know, like, I can legally help you overt those taxes. You don't want to avoid them. That's a different thing. We want to minimize and pay what we're legally required to pay. - Correct. We want to minimize our legal liability, our legal responsibility, whatever term you want to use and everybody can decide how that's done within the rules. - Yeah, that's right. - All right, so I want to move into our FPNA section. So there's a couple questions I ask everybody on this. First one, what's the most important? If you had a list, the number one technical skill for FPNA professionals to master, what would it be? - Technical skill. I'd say in today's world, you still really need to know Excel. And my view, that's almost a language. I've been speaking Excel my whole business life. - I hear you. What about that soft skill? - Soft skill. I want to break your rule and tell you two because they kind of go together. - That's okay. I'll give it to you. - You need curiosity about the business case related to the numbers you're looking at. And I'm not talking about a formal business document. Maybe it's written out in a document, but I mean, the operational business realities around what you are modeling. And that's how you present it. It's how you put it on the slides. It's how you use graphics. It's the level of precision you use or don't use. It's the range, it's the point, think about your audience. You have to be able to communicate. You will optimize your value if you will strengthen your communication. - Alrighty. So what more FPNA question? If you could wave a magic wand and change one thing about FPNA. It could be the function itself, how people perceive it, whatever you want. What would you change? - I would change in Excel that I have to go back and re-freeze my frame every time I go in. And when I open a second window, okay, that's not a serious answer. Although it is annoying. I think it would be we need to be clearer as we're developing people in the FPNA role about those two earlier points. You need to understand the business case. You need to be able to communicate what you're seeing. Grow in both of those. Let's make that a bigger point of emphasis than I think it's appropriately emphasized. You and I had an earlier conversation. It's you went there early. I still think there's so much opportunity. We're not grabbing all the opportunity to train our folks in that. - Yeah, I hear you. It's I try to share that message as much as I can because we can definitely do a better job. All right, so now we're going to move into the get to know you section. First question is, which one of your sons is your favorite? (laughing) I just want you to be able to share this with them if you gave an answer. - See what? - Sure. - I have a favorite first born. I have a favorite second born. I goes, yeah. Well, I tell my daughters-in-law the same thing. You are my favorite first daughter-in-law. - I have to. I want to live long enough to see great grandchildren. I have to answer it that way. - My dad always told us when we were little, we'd ask who the favorite was. He goes, "It's always the youngest." And so my baby sister, there's now 40, 41, whatever, in her 40s. And as she's still the favorite, we always tease her about that. 'Cause he would always just tell us 'cause he'd love babies. - Yes, I love babies too. - That was always his favorite. - Now we're getting the grand babies, so yeah. - Yeah, yeah. - All right, so on a serious note, if you could have dinner with any one person in the world of life today, who could take into dinner? - If I had longer to think about that would be really fun. Okay, here's the name that pops to mind. Robert Gates, former Secretary of Defense under both President's Bush and Obama, which is pretty interesting. He was the Director of Central Intelligence, and he was the President, Chancellor. I forget what of Texas A&M. I think he was actually there when a couple of my boys were there. I quote him some. - That's right, Texas A&M. Baylor was the one who did the white water under Clinton. He was the Chancellor at Baylor, Ken Star. - Yes, Ken Star. - I was confusing the two for a second. I'm like, "Wasn't it?" - No, it was. - Yes, you're right. They're both Texas University. You see, if you're me off for a minute. - Yes, I'm sorry. Well, a couple of my boys and two of my daughters in law went to A&M. I think some of them were there when he was President. His book, "Duty" about serving for both Presidents is fascinating. His book on leadership is also fascinating. I forget the title. I quote it some in my book. I think it'd be really interesting to have a conversation with him. - He would be fascinating, so good answer. All right, next question. Let's see, I'm deciding where to go. If you could only listen to one song for the rest of your life, what song would you pick? - Wow, one song. Can I cheat and give you two? One instrumental and one. - Sure, I'll let you cheat. - Yeah, we'd rather see F.O. after it. We do bend the numbers. (laughing) - Johann Bach's "Yaysu Joy of Man's Desiring." The words are great. The melody line is just probably the most beautiful thing ever written. So that lyrics and music, "Town and Getty." It's about 20, 25 years old. It's a modern day hymn in Christ alone. I love it, it's one of my favorites. - Got it, love it. All right, well thank you for joining. I appreciate you carving out some time. Any last thoughts, any parting wisdom you want to share before we end the interview? - I'm grateful to get to have a conversation. I mentioned this to you earlier. I think you're doing a really neat and valuable thing here with the focus on excellence in FBNA. Plodging Commingie for it, thank you. It's a privilege to get to spend some time talking about stewardship, FBNA, Johann Bach, Robert Gates, all the stuff. - And how Excel needs to fix freeze frames? - Yes, please. Soon. - Well, I am a Microsoft MVP, so I'll see if I can submit that one of these days. - Now, is it possible? I've just missed, there's a fix out there and I haven't seen it. - I'd have to think about, I'd have to see exactly what you mean on the freeze pane so we can look at that later. - Okay. Remember, one of the things that happened is I went up the chain is like, I got less and less on the front lines of the skills of Excel, so. - Exactly, so I'd have to see the exact problem before I comment. That's always my answer when it comes to problems. Show me exactly what you mean, then I'll comment. - Very good. Well, enjoy this today. Thank you, Paul. - Thank you. That's it for today's episode of FBNA Unlocked. If you enjoy FBNA Unlocked, please take a moment to leave a five-star rating and review. It's the best way to support the FBNA guy and help more FBNA professionals discover the show. Remember, you can earn CPE credit for this episode by visiting earmarkcpe.com, downloading the app and completing the quiz. If you need continuing education credits for the FPAC certification, complete the quiz and reach out to me directly. Thanks for listening. I'm Paul Barnhurst, the FBNA guy, and I'll see you next time. (upbeat music) (upbeat music)