536: Finance and the Big Shift | Brian Swartz, CFO, Cornerstone OnDemand

Listen to the Episode Below (00:41:12)

When asked about the experiences that prepared him for a finance leadership role, Brian Swartz, CFO of Cornerstone OnDemand, doesn’t hesitate to mention his tour of duty as controller for EaglePicher, a collection of businesses founded in 1842 that stubbornly has reinvented itself from one century to the next. However, as the small conglomerate was entering the 21st century, it found itself burdened with enormous debt, which led to a bankruptcy filing and a transformative restructuring—all of which controller Swartz got to observe firsthand after the company’s CFO and treasurer made a hasty exit.

“I kind of stuck around. While I would never want to work in that environment again, in that type of situation you do learn to understand all of the reasons why we have contracts and what all of the provisions in the contracts mean. The reality is that the provisions are not relevant until things do not go as planned, and that is basically what a Chapter 11 is,” explains Swartz, who ultimately helped to lead EaglePicher’s finance function through the Chapter 11 process and out of bankruptcy. Reflects Swartz: “The experience made me think about things differently as I moved on to become CFO of Apollo Education Group.”

He would serve as AEG’s CFO for eight and a half years before leaving the multibillion-dollar provider of education services to enter the software technology realm. Today, Swartz characterizes his departure from mission-driven AEG as a distinct milestone in his career—one that required him to leave behind a role that he had found enormously satisfying in order to be challenged in new and different ways inside the data-addicted but always inspiring technology sector. –Jack Sweeney

Apple | Google | Spotify | Stitcher | iHeart | Android App

Guest: Brian Swartz

Company: Cornerstone OnDemand

Headquarters: Santa Monica, CA

Connect: www.cornerstoneondemand.com

CFOTL: What metrics have you sought to make top-of-mind across the organization?

Swartz: With our shift in pivoting the business to focus on product and not service, we actually had a very focused effort to get the entire organization—from the individual sales rep out in the field all the way up to our senior leaders—really focused on annual recurring revenue, or what’s called ARR. This is basically the annualized contract value of our products that we sell to our clients. As part of this, we really started to leverage Salesforce Einstein dashboards. We have an enormous number of these now, and these are actually pushed down all the way to our individual reps’ level. This really gives us enhanced visibility into the performance not just of the sales team, but also of the support team and the client satisfaction teams. We’re really leveraging the Einstein product on the Salesforce platform really not so much as our BI tool but as our visualization tool to be able to look at data from different sources and have real-time data to make better decisions. So, we dramatically upleveled this.

When I joined the company, we were at about $350 million in revenue. This next year, we’ll get close to $600 million, or we’ll end this year with an ARR of close to $600 million. As you scale a business and double a business in a three- or four-year period at that size and scale, you do need to think about doing things differently. You need to think about the cadence of meetings, the levels of communication, and the cascading of communications to make sure that you have alignment and that you support all of the managers throughout the whole organization. I think that possible challenges in these areas will only exacerbate themselves over the course of the next few years, so we have to be very mindful. We like to be super nimble. We obviously want to attack issues and deal with them quickly, but you also have to make sure that you’re bringing people along, particularly in a business with 2,000-plus employees globally. jb