590: The Art of Fixing What’s Broken | Terry Schmid, CFO, Topia

Listen to the Episode Below (00:43:31)

Purchasing bananas and moving them through a warehouse in less than 24 hours is perhaps not a professional experience widely shared by today’s finance leaders. Still, as Topia CFO Terry Schmid tells it, mastering banana logistics may just be a worthy prerequisite for many of today’s CFO roles.

“It taught me to think about the process that you go through to understand how things flow, how things actually work, and how you can improve things,” says Schmid, who first entered the professional world as a software coder specializing in COBOL—a language that landed him a consulting engagement with Safeway, Inc., in the 1990s, where he spent months alongside a team of Safeway buyers building a new logistics and warehousing system.

“Being responsible for the produce piece, I had to learn how they buy produce and move it through the warehouse, after which we wrote a system to automate the process to a large degree—particularly the buying part,” explains Schmid, who recalls the Safeway team as being at first somewhat doubtful about the new system.

“Automation has a tendency to unnerve people. It was my job to convince these guys that using the system was going to be beneficial to them and make their job better. It wasn’t going to replace them. It was just going to make their job simpler,” he recalls.

Schmid doesn’t hesitate to draw a line from his COBOL coding days straight to the CFO office. “The opportunity that I got out of that was a solid understanding of how businesses work, how information flows, and how important it is that information is timely and accurate,” notes Schmid, who characterizes the CFO role as one dedicated to helping organizations fix broken processes or adopt new ones in order to clear the path for growth. This is a role widely coveted inside the tech sector, but few CFOs have been as frequently recruited as Schmid, who has to date served as CFO in more than a half-dozen early-stage companies.

Twelve months into his latest CFO role, at Topia, Schmid is back to fixing processes and studying workflows and purchase patterns just as he did in the 1990s. In one way or another, it seems that he’s been moving bananas ever since. –Jack Sweeney

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Guest: Terry Schmid

Company: Topia

Connect: www.topia.com

Headquarters: San Francisco, CA

CFOTL: Having served as a CFO of multiple early-stage companies, what’s different about Topia? What sets this opportunity and the challenges it faces apart?

Schmid: Every job and every company is different and has its own challenges. A lot of it is the same on a fundamental level with regard to what it is that you need to get done every day, but the challenges of a company and where it’s at at any given point in time are always different. Topia is a great company in a great space at a great time, but we’re also working through some operational challenges that have built up over the past few years. We’ve effectively had to reboot the company, and more than 50% of it has become new from a personnel perspective, as we’ve had to change over and bring people in who can help us to scale the business. The challenges that Topia has been facing were really around scalability. Can we grow this business? Do we have the systems, processes, and people in place to create the right foundation to really grow the business?

If you don’t have that foundation, you’re in big trouble. It’s not going to work, because things break. When I look back at Topia, what I hope that I can look back on is that we really were highly effective in fixing the things that were broken and allowing the business to scale. One of the key things in finance is to get out of everybody else’s way. If people are talking about finance, that’s generally not good. It means that there’s something wrong and we’re somehow a problem in the business—we’re slowing something down or not providing the right information or whatever.

We’re in a place right now in Topia where we’ve got a lot of fundamental things to do on the systems side, on the processes side, on the controls side. It’s not glamorous, but it is absolutely strategic to the business. I hope that when I look back on this chapter and recall this opportunity that I was fortunate to be a part of, I recall how we fundamentally changed the firm when we got there and made it a much better company than it had been before we arrived.