607: Exercising Discipline to Expose Trend Lines | Angiras Koorapaty, ReversingLabs

Listen to the Episode Below (01:00:15)

When a new CEO is recruited to lead a company, it’s not uncommon for the incumbent CFO to be replaced.

However, there are certain network-savvy CFOs who are able to muster enough influence with their boards to easily discourage incoming CEOs from implementing their displacement as part of sweeping the C-suite clean.

Angiras Koorapaty was not one of these well-connected CFOs. Or at least he wasn’t about 20 years ago, when he found himself forfeiting a finance leadership position to a newly arrived CEO’s CFO pick.

“This was a pivotal moment for me at the time, and it led me to do some reflection and to think about my career,” explains Koorapaty, who says that he later realized that as a CFO he had been too focused on the company’s internal operations and had failed to build important relationships with board members, investors, and other stakeholders.

Says Koorapaty: “As a result, there was a change in finance leadership.”

The eviction prompted Koorapaty to take action. Eager to put the experience behind him and open the door to new opportunities, he began working with a business coach, an advisor who specialized in coaching CEOs but understood the CFO role well.

Koorapaty says that he personally “set the agenda” and identified the areas that he wanted to address—but that the coach held him accountable.

“Oftentimes, I found him to be a pain in the neck. I did not always look forward to our calls, but I stuck with them. This made me a better CFO and a better partner for CEOs, and—most important—it made me a better communicator with my boards and a better relationship builder,” he explains.

Several CFO tours of duty later, Koorapaty is now CFO of ReversingLabs, a cloud-based security and networking company based in Cambridge, MA. “When I joined the company, a number of board members approached me with their views,” recalls Koorapaty, who says that he listened carefully before adding a number of items to his list of CFO priorities. For Koorapaty, better communication begins with listening. –Jack Sweeney

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Guest: Angiras Koorapaty

Company: ReversingLabs

Connect: www.reversinglabs.com

Headquarters: Cambridge, MA

CFOTL: Can you help us to better understand the types of opportunities that you are trying to measure?

Koorapaty: When we talk about opportunities, these are basically sales opportunities, which are essentially a cascading metric that comes off of marketing qualified leads. There’s kind of a handoff that happens between marketing and sales. Once there’s an opportunity that’s been established, your sales pipeline journey begins. It is extremely important to be able to accurately measure and track these opportunities and the dollar value of them.

I go a step further and actually look at the incremental opportunities or incremental leads created for that particular week. I share that information with the team so that everyone knows that this is something that we’re laser-focused on. When we think about this on a weekly basis, it allows us to look at these metrics and see a trend line. I hate looking at a metric in isolation. If you give me a metric for something—”This month we did 5,000. We generated 5,000 leads”—well, that really doesn’t tell me much. How did it compare with the past six months or the past year?

You can make decisions based on trend lines, not based on one particular data point. In order to see a trend line, you first have got to have the underlying discipline and systems in place. Once we have the sales pipeline, then this gives us the ability to forecast revenues beyond this current quarter. We can develop certain ratios and relationships between the sales opportunities and actual sales orders, and that’s how you get visibility into two, three, four quarters ahead.

The more robust your forecasting system and forecasting process, the better you are at managing your business in a very capital-efficient way. You have the ability to either dial back your costs if you don’t see that kind of pipeline developing or to pour some more gas on the hard stuff. This is basic and finance leaders know this stuff, but putting it into practice requires a lot of work. It’s worthwhile spending a lot of time on doing this part of the exercise. jb