Q&A: F500 Director of FP&A

-what do you see yourself doing going forward? CFO, biggest business unit head?

I should be a business CFO in the next 6 months or so. It would require relocation, which gets complicated with the family (and is irrelevant for this discussion). So, CFO should definitely be in my near future pending resolution with the family. Going forward beyond that I'm still not completely certain, but I think eventually I'll see if I can transition to being CFO for a PE portfolio company. I'd like to get a reasonable chunk of equity in something and grow it's value.

-what made you change from M&A to FP&A and how transferable are those skills? (I'm hoping to do the reverse)

I was not in a standard M&A position. I was in a small arm of an accounting firm where we did a lot of business valuation and tried to do some sell side work for clients. One of the reasons I left was because our M&A was pretty sad.

In retrospect, I'm glad it happened that way. Had I been at an investment bank I probably wouldn't have left M&A because I thought M&A was "cool" at the time. However, I'm very happy that I am where I am now vs. IB.

-how do you keep the work interesting? I've been in for almost a year and I find it quite boring.

The truth is that sometimes it's not. I think having a variety of experiences helped me here. To me, the shitty parts of FP&A are better than the shitty parts of Big 4 accounting and being an analyst/consultants. Especially at the low levels, there is always going to be some boredom and crappy/menial tasks.

What I have done though is always focus on the business and learn where I can. When I was an SFA, closing the books wasn't exactly fun, but I got that done in a few days and then would spend the rest of the month trying to work on business problems and involving myself where I could.

1) has industry played a large part of your career, or have you mainly just wanted to be in CF and rise the ranks?

This answer would be different depending on when you asked. When I was in Pharma, I thought it was the only place to be and I didnt imagine myself being in any other industry. However, I ended up jumping to my current company in industrials and I actually like it more. I've come around to the belief that the company, opportunities and day-to-day position are all much more important than industry.

2) How do you see the new tax legislation impacting your industry and/or country? I've noticed that it really depends on how your current company sits in tax strategy and what their business model is structured around.

I honestly haven't given it a ton of thought on a macro level. As someone who is invested in the business I work for, I certainly hope that it frees up capital and allows us to accelerate investments in our portfolio. From a business and career standpoint, growth in our portfolio is what I'm looking for.

This is an interesting question that I might have to come back to.

3) I'm guessing by you're stated experience and that you didn't do an LDP that you are a very young Director for external hires. How did you see your career evolve and what do you think contributed most to your success so far?

Correct, I did not do any sort of leadership program, although I managed them at my previous company and highly recommend those programs. The years given above are definitely rounded, I probably made Director ~9 years after graduation.

What contributed was hard work, personality (internal networks), intelligence, calculated risks and some luck. The main reason I left the pharma company was because it was going to take too long to make Director even though my reviews were stellar. It wasn't me, it was the company's culture and log jam for promotions. For that and a few other reasons, I took a chance at a lesser know F500 which has a very different culture. My current company has definitely allowed me to thrive and contributed to my "success".

I'm not going to walk through my annual salary history, but I believe that my comp has generally been in line with the market for the position I was in. So, the increases at the pharma company felt slow and hard to come by, but now they've come fairly easily. I remember having a discussion with a mentor at the Pharma company who told me that Comp goes from hard to easy once you hit Director and above. I wouldn't say I'm at that easy point yet, but I've certainly past an inflection point.

Comp is important, but I always advise younger people to worry about their responsibilities and career path first and then the comp will come. A short-term decision that slows or changes your career path might net you a few $k this year, but could cost you a multiple of that down the road.

I remember what it's like getting a $3k raise or wanting to make $5k more per year. It sucks and I understand the desire for more. I will just say from first hand experience, that if you get (or are in the process of getting) to where you are wanting to go you'll be turning down much bigger raises in the future if they're not a good fit for your career path.

1) How important is your degree/background when switching to an FP&A position? Do you need a Big 4 audit background or can investment banking/consulting/other finance consulting roles get you "in"?

You do not need any specific background for FP&A. I know of a Corp FP&A Director at a F500 that has an IT degree. I also know of a few who have degrees specialized towards their business (for example a chemistry major in FP&A at the Pharma company). So, while FP&A backgrounds are more diverse, it certainly is easier to get the job with a finance or accounting degree and experience in FP&A, Accounting, audit, consulting, etc.. experience.

Most good companies will let you move around once you display that you're good. However, it will likely be more difficult to be hired in off the street with a non-standard background. So, if your background isn't standard your first job at a company might not be FP&A, but if you can demonstrate aptitude in another role that could be your way to transition in.

2) Once you are in FP&A, how important is an MBA to move up if you don't have an accounting background? Are companies more lenient nowadays since MBAs really don't add much value, especially part-time ones?

Most companies I see now view an mba as a nice to have. It's definitely not bad to have, but other than a select few it won't hurt you if you don't have one. Generally, moving up internally is based on your quality of work.

I have chosen not to get an mba at this point (I still consider an executive mba every once in a while) and it has never held me back. However, some of the positions I'd look at external, especially pe portfolio CFOs, do seem to value it.

3) Have you always worked for public companies? What's your advice for working in FP&A in the beginning - better to work at a large public company or large private company?

In FP&A I have always worked at public companies. My advice depends on your options. If working for a F500 company is an option, I would definitely start their earlier in your career. a F500 will have more career options for you and generally better processes and brand recognition.

As you advance you'll frequently see smaller companies (public or private) that desire F500 experience, but you'll never see F500 companies posting a requirement that someone worked at a smaller or private company.

You can make it from anywhere and your career path will not be linear, but all things being equal I'd start at a large public company over a smaller or private one.

I'm probably not the best to answer this. I've posted on here before saying this, but I avoid professional services companies like the plague. They're obviously not bad companies or careers, but not something I'm in to. I only look at companies with a tangible product.

Can you give a little bit more context into what your doing now? My general guidance would be that if your goal is to move into FP&A then do that. However, depending on your experience a stint in Controllership could help you get there.

One of my main concerns for you would be that you say that you want 4-6 years experience before getting your MBA AND you seem to want FP&A experience. If you're already in 1 position and then move to Controllership your 4-6 year window is probably close to closing. How much FP&A experience do you plan to get? At what company?

It also seems that you're spraying to all fields a little bit here. That's not always a bad thing, but you seem to have firm goals that are opposing. If your ultimate goal is a strategy gig after MBA why aren't you going for the most strategic roles you can? What kind of company are you looking to do strategy for? If it's not financial services then I'd really question taking a Controllership role at a BB.

Sorry this is a jumbled response - I'm rushing to a meeting, but wanted to give you a few things to think about.

Your question is a good one. Especially at the junior level, there are few roles with the FP&A title, they are generally Financial Analyst or something similar. The day-to-day job also varies quite a bit. This is one of the difficult things for outsiders to wrap their heads around.

Like I said, at the junior levels you're more likely to be titled a Financial Analyst or something similar. You're also possibly doing month end close (maybe even making journal entries), managing spend, etc... Not usually any technical accounting, but there is often an accounting/transactional component to the job. As you advance, you'll be doing less accounting/transactional work and more strategic/business work. That doesn't mean you'll be completely out of the accounting cycles though.

For me, I stopped doing all journal entries or "accounting" when I hit manager. I stopped managing expenses when I hit Director. However, as I'm advancing I am definitely glad I have those experiences. I can't tell you how many times I've questioned something on the accounting side and glad I had that experience to rely on.

Although I'm outside of any accounting or transactional responsibilities, I'm still not completely out of the monthly/quarterly cycles. I still owe some reporting and analysis to our President, CFO and CEO on a monthly basis. Also, there are about 5 days where my quarter end SUCKS as I prepare a business review for our executive team and analyst calls

1) Are you in a divisional or corporate FP&A role? What do you think are the pros/cons of one vs the other?

My current company basically has businesses, GBUs and Corporate. I was last director of FP&A for a business, now a GBU. I have no desire to do Corporate.

I liked the business because it was really day to day management of a business. Our President valued Finance and me, so I was a member of the executive team who happened to do Finance.

I like the day-to-day of the GBU position less because I'm further removed from a business and deal with some extra crap, but I do enjoy the interaction with the highest levels of my F500 and even (very limited) with the Board.

At our company the head of Corp FP&A is completely removed from the businesses and is just IR and CFO's bitch. It's a good job, especially for the resume, but I have no desire to do it.

2) Have you considered taking a product finance role? What do you think are the pros/cons of FP&A compared to product finance?

At the Pharma Company I had a role supporting a product. It wasn't called Product Finance, but I imagine they were similar. I actually really liked it - I grew very close with the VP who owned the P&L and found it to be a good experience.

I am also a believer that a diversity of experiences is good, so if you can take a position that is more "product finance" then I think thats an overall positive.

3) Have you ever considered moving over to the business side? Have you gotten opportunities to do so or have seen others make this switch? Specifically have you seen any finance people move over into GM roles on the business side?

Sure. at the junior level I could have moved into Marketing or Supply Chain very easily, but wanted to see how far Finance would take me. At my current company I'm on the CFO path so no one really gets off that. However, I could call the President of the business I just left and I'm pretty confident that he'd give me just about any open job I wanted.

Moving out of Finance is always an option, but not one that I've really pursued at this point

4) I know you mentioned that you don't want to go through your entire comp progression, but would you be fine with disclosing your current comp range at the Director level? I'm currently an SFA so I have no clue what the current range for people that high up is

I'm pretty open, but dont want this to turn into a comp thread. I will say that there was a thread a while back where there was some good comp discussion. In that thread thread there was discussion of a guy with an offer as a Director who's all in was low (IIRC maybe around $140k). I believe that a real Director should always be over $150k all-in, probably over $180k all-in at a public company. At F500s I think you'll see most Directors all-in over $200k, which I am. The top range for a Director can be pretty high because you can have guys that specialize or are Directors for 20 years. With incentive compensation factored in, achieving Director at a F500 and staying their the rest of your career is not a terrible outcome.

Congrats on the job! You didnt specify, but assuming your internship was with this company you're in great shape. They already like you and you're a known commodity, which bodes well for you.

The biggest thing coming out of school besides the obvious skills is actually how you handle yourself. I'll give a few examples: - Feel free to ask questions, but ask smart questions. Try not to ask the same questions multiple times and try to figure it out first before you ask a question. - Show an eagerness to learn and help the team however you can. - Be personable and friendly - Understand that you're going to have to do some crappy work. Every junior level position requires it. Even if you're a rockstar, just swallow your pride and get it done.

Too often new guys come in all amped up or scared. Neither is really ideal. The guy who is a 10/10 every day will wear down a manager just as much as the guy who's a 2/10. It just boils down to being a normal person that will work hard and wants to learn. If you come in every day between a 6 and an 8, it will be all good.

1) The way how i see FP&A developing is it moving towards the data / BI side of things outside of their traditional accounting / finance systems alone. This necessitates future analysts to be able to pull, crunch and present data in increasingly developed ways (SQL / Tableau / Python etc.). Would you agree with this, and how important is it to pick up said programming / BI skills?

I definitely see FP&A going more towards Data/BI. I've seen a few IT/Data guys in FP&A and they can start to do some interesting things. However, from my perspective (for now at least) the data-management piece of the job ends around the Manager level. Once you hit Director you should not be doing much heavy-doing data crunching. The role should be more management, presentations, business problem solving, etc... I actually tell people that even my excel skills have atrophied. I'm still in Excel all the time, but not creating anything complex.

2) As an analyst, and even for some manager roles, FP&A starts feeling very bland when it is the usual Monthly Reviews / Quarter Reviews. Especially at the global level, where it becomes akin to the constant consolidation of data, and developing of templates for use; one feels very separate from the actual business. What kept you going? This can definitely be true. I think 2 things kept me going: 1. I had done lower-level work in Big 4 and "M&A" Consulting and while the bland parts of FP&A sucked, I found them to be MUCH better than those jobs. 2. I tried to minimize my time doing those bland items and then find other, more interesting projects to work on. It really became a win-win for me - less hours on crap I didnt like and earn a great reputation helping on things I did like.

3) Thoughts of transitioning from FP&A into IB / ER? I had some analysts at the healthcare company move into hc IB and hc consulting, but I'm not an expert on this. My guess is that it's possible at an entry-level, very difficult at a mid-level, and then possible again higher up. Having industry experience at an entry-level is good and then you can be taught the technical. I think mid-level would be tough without a mastery of IB technicals. I could see myself adding value again at some point at the higher levels just from knowing the industry and personal connections.

4) How important is a CPA for progression? None of my experience would show a CPA to be necessary for progression; however, some people definitely value it. I'd think of it as a nice complement to a resume, but usually not a must

I hate to be that guy, but the answer to all of your questions are really "it depends". Unfortunately in Corp Fin every organization, manager, opportunity is different so there aren't always perfect answers. That being said, I'll give my experiences.

1) How long does it take to make the jump from a finance manager to a finance director / VP, and what skills/abilities do top management look for in a candidate applying for those kind of roles?

Look around your organization and see what other people have done, that's going to be your #1 template. As an outsider, it looks like you've moved up very quickly, which is great. You may continue that trend, but I wouldn't be too disappointed if you dont. It is possible to move up too fast and then get "stuck".

I always advise everyone to get as wide of a skillset as they can. Once you're a VP you can't go be a cost analyst, treasury manager, business development associate, Plant Controller etc.. You don't NEED each of those experiences, but they'd each be helpful for certain jobs (especially CFO).

At Director/VP/CFO levels it becomes less day to day Finance and Accounting and more strategy, execution, leadership and decision making. In my opinion these are all easier if you've built a broader skillset while getting their.

Back to directly answer your question: I wouldn't be too upset if you do 2-3 Manager roles in different areas before you make Director. Obviously, if your company will allow you to advance faster most people won't turn those opportunities down, but I wouldn't feel like anything is wrong if you're a Manager still in a few years.

2) Would you recommend taking a "promotion" into a business unit with a smaller P&L or would you advise staying in a role with a larger P&L (and thus more visibility/facetime with senior directors and executives?

Again, this is organization specific to some extent. Where you have a huge advantage is that you know the leadership so even if you go off site for 2 years you can keep a connection and come back pretty easily usually. Where this can be more difficult is if you're going to a new company and trying to make a name at corporate.

The smallest P&L I worked on (~$400M) is where I really made a name for myself. My CFO got fired and I got to roll up my sleeves and lead the organization. IT was the most fun I had working and I now have a president who recommends me highly for any job. Based on my experience and your situation, I'd recommend considering the smaller P&L if it gives you more responsibility

3) How can one make the jump from Corporate Finance to Corporate Development? When you say Corp Development do you mean M&A or strategy as well? If your Corporate Development is M&A (like my current company) you really need to have robust M&A experience. If you want to get that, it's best to try as early as possible (they might take you with no experience as a Mgr, but not as a VP). Strategy is similar, but if your become an expert in the business, it might be more possible to lateral into Strategy.

Generally, both M&A and Strategy do tend to prefer outside experience in banking or consulting, but I haven't seen it absolutely required.

Sorry, just saw this. My opinion is that an MBA and MS in Accounting are not viewed the same (because they're not the same). An MS in Accounting is a technical degree. If you want to get a technical Accounting degree that is the degree to get (and it will be well respected for that). If you want a broad business degree get an MBA (and it will be well respected for that). I'd worry a little bit less about perception of the degree and get what you need/desire to continue to advance your career.

I know the crappy UG can feel like a chip on your shoulder at times, but you're 27 and a Mgr at a F500, you're doing well. Your promotions at this point are going to be based a lot more on your work experience than a piece of paper.

Some of the weekend/online MBAs with trips abroad seem pretty sweet. My coworker just got one from Duke. That's always an option too

If you want to lead Corporate Development I've seen 2 main paths: - Be an M&A expert - Be an Industry/Strategic Expert

I think the path you can prepare for most is being an M&A expert and this takes years of experience, typically with some IB or PE background. You need to know how to structure and close deals in your sleep (in addition to modeling, strategy implications, etc..). It's just one of those things that if you haven't done it X times, you're not an expert.

You can get the experiences you note in FP&A, but it's not the same as the tactical management/closing of deals.

The head of M&A typically reports to CFO or CEO. They're usually "pigeon-holed" I guess, but I think that's generally where they want to be. Exiting back into the business is certainly possible.

Switching firms comes at a cost. Beyond my junior years I did it once. It is hard to leave a good reputation and connections behind, but that can be rebuilt. In my case, I moved somewhere that had much better growth opportunities and I've done well on the reputation/connections end. Now that I've advanced even more the switch would likely be even more difficult, but I'm sure will happen at some point.