Machine generated transcript
Gouneva: I would probably say until a few months after I joined, we were very focused on top line growth, and majority of what we report and how we will report is premium, which for us is indication of top line growth. And we had to make a shift given everything else that was happening externally. Capital is a lot more expensive. Focus was a lot more on profitability, burning through less cash. And a lot of that pushed us to shift into managing not just top line, but thinking about the full P&L, thinking about our loss ratio, thinking about our cash burn, having the view of full profitable growth rather than just growth was critical. So what we started to surface a lot more is information on other cost drivers for the business and ultimately having focus people on full P&L rather than just top line.
And that is the minute you’re focusing on showing something else, people start to understand it. People start to see the importance of it and focus on this, because if you don’t share that information, the focus will not be there. Just making it the CFO focus by itself is not going to deliver the results. You need to make sure that the respective leadership understand that, as well, and understand what they can do to deliver profitable growth, not just any type of growth.Read More
CFOTL: Well thank you for that. As our listeners know, we’re always appreciative of insights as far as how finance works to keep organizations on their strategic path. And we’re wondering if you might have some additional insight that you can share from your past experiences, Teodora. We call them finance strategic moments. Would you have yet another for us that you can share?
Gouneva: I would love to say that I have many of those happening on a daily basis. The one that I would love to bring up is through my career I spend a lot of time supporting sales teams. And usually what is critical with the sales team is they respond really well to how you design compensation. And if you don’t design it the right way, you may get a different behavior that you don’t intend.
So looking back at that particular example, the way we work is, we set the company goals and we know at a high level where we want to get to and how we get there. And sales teams at PayPal play significant role of that how are we getting to our strategic long-term vision, and having the conversation with them to translate, why what we asking from them now is different than what we asked from them last year, and how that helped the company and how therefore they should adjust behavior was pretty important for us.
And I think that happened after PayPal had acquired Braintree, we had to bring two sales team together and change how they operate. So we had to paint the vision for them of what PayPal needs, how is that new dynamic between the sales team coming together and ultimately what is the goal? So we had to get them strategically aligned on what is important and why. But from a finance perspective, we had to put the financial infrastructure in place or the compensation plans in place that drive the right behavior.
So that has happened in multiple type of occasions, not just related to sales team. I think such an effective approach has to happen with any other goals and any other alignment that you need to get for people to work towards the same strategic direction.
CFO GUEST: Teodora Gouneva
EPISODE: #880: When Success Begets Risk
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