We are nearly at the end of our interview with Scot Parnell when we ask him to explain what led him to accept the CFO position at DailyPay, a company with a pioneering technology inside the human capital management realm.
This is a question that we had asked a little earlier in the interview, but this time we want to know what other factors may have contributed to his decision. Although Parnell has already put forth a compelling explanation of DailyPay’s unique offerings, he is happy to share a bit more with us.
“This role was absolutely fascinating. I was at a place in my life where I could take some risks, and I also think that I’ve got some runway here. For me, it was too important to be absolutely excited about going to work every day. It makes me a better leader. It makes me a better husband and father when I find fulfillment in what I’m doing,” explains Parnell, whose response suddenly widens our lens to a better view of what sets apart his latest CFO career chapter from earlier ones.
“As I sat back and looked at what I wanted to do next, this just felt like I could get more excited about it and put more of my soul into it, so that’s what I did,” he continues, while expressing a sentiment that many finance leaders experience but frequently resist acting upon.
Having spent the past 20 years as a finance leader in large enterprise organizations, Parnell has observations about the entrepreneurial realm that undoubtedly signal a fresh enthusiasm that few CFOs can muster—and particularly those who may have built their careers as start-up CFOs but over time have become more integrated into their surroundings.
Nonetheless, when it comes to CEO–CFO relationships, Parnell’s comments are suddenly strikingly similar to those of a broad swath of his CFO peers: “The CFO and CEO have to do a Vulcan mind-meld to make sure that they’re not only of the same mind, but also able to work together as a team and provide each other balance and support.” –Jack Sweeney
Guest: Scot Parnell
Headquarters: New York, NY
CFOTL: What comes to mind when we ask for a finance strategic moment?
Parnell: A great example was when I first got to the Student Loan Corporation (of Citigroup). It was very revenue-focused. There was a lot of attention paid to top line growth, and the balance of power and focus was on it. At the same time, it was pretty clear when I walked in, being the new guy, that the company was underwriting a disproportionate amount of risky loans, and in the student loan space, it is not good for the company or the borrower to be in a risky loan. A cultural shift was required. I had to gather information and perspectives from everybody involved, all the stakeholders, and I had to model out what was going to happen over time, depending on how we made different decisions. Eventually, I was able to convince people that we needed to change.
We developed risk-based pricing. We reinforced the credit standards. We were able to get better pricing across the board, such that riskier accounts were charged more and less risky ones were charged less than originally had been the case–which means that we won on volume and on rate when we went to market with the revised products. A couple of years later, the financial crisis hit and the U.S. nationalized the federal lending program, which had been the majority of the business that we had had. So, it was pretty important that we had done our housekeeping work beforehand, or else we would have been in even more peril.