Tolga Hocanin, CFO & Vice President, Finance & IT at Lindt & Sprüngli (Canada) gives a masterclass in CPG FP&A from his experience at PepsiCo and chocolatier, Lindt.
In this episode:
- Lessons from 20 years of budgeting and how my first budget was a nightmare
- Why budgeting is not just a math exercise
- The main metrics you need to know in CPG
- Why mix management is crucial
The 30-60-90 day plan to succeed in finance in CPG - Running both IT and finance as CFO and why this makes sense
- Building a strong culture in a finance team
- Starting with why in finance
- A $1.5M reporting error and how I responded to it
- Building cross-functional relationships with business partners
Follow and connect with Tolga Hocanin on Linkedin: https://www.linkedin.com/in/tolga-hocanin-cpa-cma-2958008/
Paul Barnhurst:
Hello everyone. Welcome to FP&A Today, I am your host, Paul Barnhurst, AKA, the fp NA guy fp NA today is brought to you by Datarails, the financial planning and analysis platform for Excel users. Every week we welcome a leader from the world of financial planning and analysis today. Today we are delighted to welcome to the show, Tolga. Welcome to the show.
Tolga Hocanin:
Thank you for having me. Looking forward to our conversation.
Paul Barnhurst:
Yeah, really excited to have you here. So, just so our audience knows, I’ll give a little bit of an introduction. We’ll give you an opportunity to add more to that here shortly. So he comes to us from the Ontario, Canada area. He’s currently the CFO at Lin Canada. Earned his bachelor’s in Business administration and spent a good majority of his career working at Pepsi. Was there for about 15 years. So one of the first questions we’d like to start with, with everybody is what we call the, uh, the budgeting question. Tell me about the most challenging or worst budget experience you’ve had in your career.
Tolga Hocanin:
There’s been a lot of good challenges over my years of budgeting. I mean, been doing it for almost 20 years. I’d say. The one that I learned the most is actually my first. So couple months out of university, I was in my first job, um, as an fp and a analyst, and I was tasked with doing budget. My biggest challenges were, as I was, as a lot of young people are a little cocky. Uh, so I didn’t ask a lot of questions. I, I made a lot of assumptions. I didn’t ask for help. And, you know, I dove right in. I was in charge of doing all the planning for the warehouse part of the business, the transportation, the fleet. It, it was quite a lot of costing that I was trying to do, and it just ended up terribly, just went off the rails.
Tolga Hocanin:
My manager finally came in, saw where I was, what wasn’t going right. And, uh, we really had to scramble in the 11th hour to redo everything. And it, it was just a terrible process and I felt terrible. Like I almost wanted to quit at that point because it went so bad. But it was a great learning for me because it, just, having those coaching conversations, me, oh, wow, uh, reflecting, it’s like the need to never make assumptions, right? Ask a lot of questions, really make sure you have the right training and you, you have a good understanding of exactly what you’re doing and ask for help. If you are unsure about anything, it, it’s better to ask, uh, take five minutes to ask for help or ask a question versus just keep going and wasting a lot of time. So that first budgeting experience was foundational and I learned so much that that’s allowed me to have a much better process and approach for the ne next 20 years, um, of doing budgeting, which I have been doing, which is crazy to think back at now.
Paul Barnhurst:
Yeah. Uh, it is, it’s amazing how time time goes a lot faster than we realize as you look back. So, if you were to go through that experience again, like say somebody’s going through their first budget, what advice would you give them from kind of what you learned from going through that experience?
Tolga Hocanin:
I guess I would say make sure you understand not just what you’re doing, but why you’re doing it, so that they have the context is exactly of, Hey, if you’re doing a budgeting for the warehouse, it’s, it’s not just a math exercise. I mean, that was one of my issues. I was like, ah, it’s just a math exercise. I know what the target is, I just need to get there. But at the end of the day, when you’re doing for me, like 50 different sites, I’m also talking about this is the bonus target for all the people in those 50 sites, right? Me making a mistake. It’s not just, oh, I made a mistake. Uh, it’s fine from a total perspective, I’m actually really impacting people’s compensation the way that they’re gonna be working throughout the year. Like, I didn’t truly understand the why, like, why it was so important of getting it right and doing it the right way, because I was never taught that. So I would really say, Hey, just ask those questions of making sure that you understand exactly what needs to be done and why you’re doing it, so that you can really set yourself up with the right mindset of tackling it the right way.
Paul Barnhurst:
Really good advice. And I totally agree with you, right? If you think of it’s just a math exercise, you’re like, eh, no big deal. As long as they get to the final number. But the reality is so many people depend on different parts and there’s incentives in there and has a much bigger impact, then you often realize until someone sits down and explains it to you and you’re like, oh, okay, this really is important.
Tolga Hocanin:
Yeah. And, and just because you’re given a target doesn’t mean that that’s a slam dunk there. They’re gotta go through that. They, they wanna know exactly, Hey, where are my risks? Where are my opportunities in hitting that target? If I have a big barrier to hit that we should all know about that before we even get into the year. Or, Hey, we have a great opportunity to overshoot that target and here’s some of the reasons why, and here’s the easy overlaps that we have, so that at least you know that going into the year instead of it being a surprise. So that’s another reason why to, to put the due diligence in it, uh, and take it seriously. Yeah,
Paul Barnhurst:
I, I’m totally with you. Makes a lot of sense. So can you maybe just tell our audience a little bit about yourself, your background, you know, how you ended up where you’re at today?
Tolga Hocanin:
Yeah. So, uh, born and raised in the Toronto, Ontario, Canada, uh, area. Uh, like you said, I got my business, uh, my bachelor in business administration. Um, I did do my CPA in Canada as well after university. Uh, I had over 15 years of experience at PepsiCo, both on the beverage side of the business and then on the food side in pretty much any facet of the business. And that’s something that I, I always encourage people to do is understand their business as much as possible. So did sales, finance, marketing, finance, supply chain, finance, you name it, I’ve done my rounds of cross to make sure that you’re well-rounded, uh, from a personal perspective, my lovely wife and my daughter, um, very active family. So I, I’m very big into sports and cycling and doing other stuff as well as, you know, also veg on the, the couch and watching tv, like the, like everyone else.
Paul Barnhurst:
I was gonna say, I believe I see a Blue Jays jersey back there.
Tolga Hocanin:
Yes. So that is from the 93 Jays that, and I have all their signatures on it. And that’s, uh, Jose Batista and then Joe Carter. So some of the most, uh, more iconic, so I’m a very big Blue Jays, uh, fan.
Paul Barnhurst:
Yeah, I was gonna say you had a good, good year overall.
Tolga Hocanin:
Could have been better, but, uh, you know, I’ll take what I got.
Paul Barnhurst:
Yeah. Also could have been worse, <laugh>,
Tolga Hocanin:
It could have been worse, but we had ambitions to do a lot more and actually get to the World Series, but that didn’t materialize, but there’s always next year.
Paul Barnhurst:
No, I understand. I’m a Dodgers fan and we’ve had a lot of good years recently <laugh>, but not quite World series. We should have a few, but that’s another story.
Tolga Hocanin:
Well, you had, uh, the World Series of off seasons, that’s for sure. <laugh>.
Paul Barnhurst:
Yeah. If we’re talking on a finance podcast, imagine, uh, forecasting all that, would they spend 1.1 billion this, this off season?
Tolga Hocanin:
Yeah. And a lot of deferrals in that payments as well. Which again, for the accountants out there, I would love to understand how that works in terms of payments now and then the future deferrals. But that’s for another podcast, I’m sure
Paul Barnhurst:
<laugh> it, it is. But I’m sure there’s a lot of finance people, a lot of people listening that would be fascinating to do FP&A and kind of in, in the sports world, and just understand a little bit, particularly a team, a franchise, right? And understanding those deferrals and payrolls, like the bonuses and the NFL and how all that, this much counts against the cap, but how are you recognizing that against revenue? It would be really interesting to see. ’cause I’m sure some of that accounting gets pretty, uh, pretty technical.
Tolga Hocanin:
Dan and I, I don’t even wanna start with the, uh, the football, like the soccer in Europe. Oh, yeah. And all those clubs with when, you know, your players are actually your assets, and you gotta manage that on the books as well, and how that actually, uh, works as well. I’ve, I’ve listened to a podcast on that and it was very fascinating. But yeah, it more complicated than I would wanna work, uh, to deal with <laugh>.
Paul Barnhurst:
Yeah, well, it’d be interesting, but yes, I’m sure it’d be complex. So I know you’ve spent your prior career in the food and beverage industry, so what is it that you’ve liked about that industry? What’s kept you kind of working in CPG?
Tolga Hocanin:
I’m sure there like a lot of, uh, industries out there. I, I love that it’s a, a fast-paced industry. I, I get a chance to do a lot, learn a lot, uh, but more, more than not is I, I wanna work for companies that I’m very passionate about. And, you know, I was very passionate when I worked at PepsiCo, not just for the products, but what they stood for as an organization. And the same goes with Lindt, uh, right now. So Link globally or Lindt Canada, I mean, extremely proud of what we do and how we delight our consumers and enchant the world with chocolate and, you know, just the product itself. And being in CPG, having that tangible product that is out there is huge for me. And that’s why I love being in CPG because again, that relatability. I can actually enjoy my product with a lot of people and see the joy that they have when they, they consume that.
Paul Barnhurst:
So, do you have a favorite chocolate?
Tolga Hocanin:
Well, Lindor, the Milk Lindor is by far my, uh, favorite. And my second favorite would be, uh, the caramel that, um, the sea salt caramel for Ghirardelli . It’s, uh, if you’ve never tried the Ghirardelli brand, it is phenomenal. So I would highly recommend that
Paul Barnhurst:
First time I had the Ghirardelli brand. There’s a, there was a factory at this time. It was in the mid nineties in Carmel, California, and they had a big shop with it. I remember we went there and got some, and I thought I was in heaven at the time, so,
Tolga Hocanin:
Well, that factory still stands and it’s, uh, it’s, you can still go to the shop there and buy as much as well as get some milkshakes and other products there too, because they, they do a fantastic job there too.
Paul Barnhurst:
I’m curious, within CPG, what are some of those key metrics that you kind of look at as you’re managing the business? What are maybe those kind of top two or three things that you’re always really paying a close close attention to?
Tolga Hocanin:
I mean, the first, the top two that everyone talks about it is revenue and profit But I mean, if I wanna take it a step further than that, uh, the definitely what you wanna look at is, um, gross profit. So not just the the bottom line profit, but what’s your gross profit that you actually have on what you’re selling? Mm-Hmm. <affirmative>. And then you actually have to look at your revenue on a, on a revenue or volume basis. So in our case, it would be tonnage, so kilograms, um, for the American listeners it’d be more on the, the pounds. So your revenue on a pounds perspective versus, uh, revenue on a per kilogram basis. It’s so that you understand exactly, are you generating more or less revenue for the chocolate that you’re selling, right? Because you, you know, there’s only a finite amount of chocolate that people can consume, and you wanna understand, are you actually generating more or less revenue for that chocolate that you’re selling, as well as the cost on a per kilogram basis, on a tonnage basis of that to make sure that your revenue is increasing at the same rate as your COGs are, just to make sure that you’re not seeing any dilution in your gross profit.
Paul Barnhurst:
Makes sense. And do you see a pretty good change in mix throughout the year, I’m guessing with big holidays and different things so that revenue per can change quite a bit depending on, you know, what you’re selling and what’s going on? Is that,
Tolga Hocanin:
Yeah, mix management is huge. Um, so product mix, customer mix. So if you’re selling to, uh, a Walmart versus a Target versus a Costco versus a whoever, you know, that customer mix can actually play a role. So if you’re more in a upscale grocery store versus a discount banner, I mean, you’re definitely gonna have different margins for that as well as products. So, you know, your everyday product versus your seasonal products, you could have a different product mix there and, you know, so you do see those fluctuations throughout the year, and you just have to be able to plan and forecast that appropriately.
Paul Barnhurst:
Sure. Yeah. No, I I I would imagine a lot of seasonality. Valentine’s Christmas season, Easter. Yeah, Easter. Exactly.
Tolga Hocanin:
Yeah. So, I mean, one thing that’s in, you know, there’s things that you don’t even realize, whereas, you know, last year, very fortunate, we, so we have the gold bunny, um, mm-Hmm. <affirmative>, and last year was a year of the rabbit. So we saw a very big spike because of the lunar, um, new Year, and it was a year of the rabbit. So a lot of consumers actually over index and bought that, given it was the year of the rabbit. So you do also see, still have those micro seasons that you have to anticipate and, you know, forecast appropriately as well. So you’re not off, um, off guard in terms of, you know, a big spike of demand for something that like that as well.
Paul Barnhurst:
Yeah, exactly. So you don’t go look at the P&L and go, okay, uh, how do I explain this? What happened,
Tolga Hocanin:
<laugh>? Why am I sold out of my Easter gold bunnies in January versus, you know, Easter is in March or April, right? So again, you wanna make sure that you anticipate those types of things as much as possible.
Paul Barnhurst:
Yep, totally makes sense. So if someone was, uh, you know, looking to work in the CPG industry, you know, finance FP&A and wanted to kind of start learning more about it, any advice you’d offer ’em, what would you recommend as kind of, you know, the key things they need to, to think about
Tolga Hocanin:
Getting into it, or when they have gotten into it?
Paul Barnhurst:
Well, let’s say if, let’s say they just started a role in it, but they didn’t know anything, so they’re just starting out, what kind of advice would you give them
Tolga Hocanin:
And, and not just going into any like a CPG role, but going into any role? I would say make sure that you build out your 30, 60, 90 day plan to make sure that you have as good of an onboarding as possible. But during that 30, 60, 90 day plan, I would say really lay out and make sure that you have, uh, one-on-ones with everyone. Cross-functionally as much as possible that you are, that you’re gonna interact with, so that you have a, a better understanding of what marketing does and what they do on a day-to-day basis. But also ask them how does, how does marketing, um, coordinator work with finance have the same type of sales with, uh, conversations with sales and all the different parts of the business? So at least coming into a new industry like CPG, you understand how all the different functions work, as well as how they interact with finance. And regardless if your job is interacting with some of those departments, it’s still good to have that knowledge because it might help you better in your job and understanding of how the overall company works. So again, you might not do all of that in your first 90 days, but at least carve that time out so that you can, you learn that so that you can really understand that because CPG is completely different than tech or some of the other industries. And it’s just good to really have that understanding of how all the pieces play.
Paul Barnhurst:
Yeah, I, I agree with you. It’s amazing how different industry can be from industry to industry. I’ve learned a little bit about CPG and since I started my own business doing a little bit of consulting for one company and helping them build their plan, but before that, I really had no experience. So it was a sharp learning curve as they’re throwing out these things to help build the model. And I’m like, you gotta explain it to me. I don’t know what you’re talking about here, <laugh>.
Tolga Hocanin:
And, and, and that’s the thing is it’s just asking a ton of questions, uh, regardless if it’s your manager or anyone else is, just be curious that Ted Lasso is one of my favorite, uh, one of my favorite shows and his key quota is don’t be judgmental, be curious. And, you know, just asking a lot of questions and really understanding of who you’re dealing with and, and what they’re doing. And that’ll go a long way. Yeah,
Paul Barnhurst:
I a hundred percent agree with you. I think, you know, regardless of industry even role, but especially in any kind of FP&A role is be curious. Mm-Hmm. <affirmative> ask a lot of questions, right? It’s not about the time you spend in your spreadsheet, it’s about the time you spend getting to know the business so that you can be better when you do need to do the analysis and the spreadsheet, or put the numbers together so you’re not just doing a math exercise as you mentioned earlier.
Tolga Hocanin:
Exactly. And your spreadsheet will be 10 times better because you ask those questions and you have a better, um, understanding of the business.
Paul Barnhurst:
Yep. A hundred, a hundred percent agree. So I know you have both responsibility for finance and IT in your role, so I’m curious, what are some of the benefits you’ve seen by leading it, you know, benefits you’ve had? Kind of from the finance side being a CFO as well,
Tolga Hocanin:
Having firsthand access to the developer. So if I wanna change my analytics tenure way or make any system changes, uh, I kind of make the decisions on if we’re gonna move forward or not versus asking for permission. But, uh, no, definitely there’s a lot of benefits to it. Uh, I’m definitely gonna see the benefits of it this year. I mean, we did a big, uh, a minor ERP change last year, and we’re gonna be doing another bigger ERP change next year. But really having finance and IT under the same umbrella and them working very closely together and partnering more than they would if they were separate, uh, goes a long way. Especially when you’re talking about changing systems or you wanna change your analytical, uh, platforms and so forth, you can really get a lot more done and that there’s a, a better understanding going back and forth between the two departments.
Paul Barnhurst:
You know, as I heard you explain all that, all I kept thinking in my mind is, do minor and ERP change go together? Even though I know what you mean by, I guess this probably a small region or area, but I was like, is there such a thing when you have to deal with changing an ERP
Tolga Hocanin:
Uh, yeah. They’re never minor. But when I <laugh> when I say minor, it’s like you’re doing one module within an SAP versus a major ERP implementation is really doing the guts of an erp Sure. And switching from like an Oracle to an SAP type of thing and doing a big bang versus just, nah, I’m gonna implement one piece of an SAP module within the en existing environment.
Paul Barnhurst:
Yeah. And I figured that’s what you meant, but just that was the thought. ’cause I, you know, ERPs can be such massive projects as you well know.
Tolga Hocanin:
And I’m very proud of my team because again, usually you hear about, you know, you add 50% to the cost and add, you know, double the time, and that’s what, you know, one of those ERP changes are gonna be. And you know, my team did a fantastic job with the one that we did last year who was on time on budget. And, you know, you can’t ask for more than that with a big ERP implementation.
Paul Barnhurst:
No. If you could be both on time and on budget, that’s a huge win. I’d say if you’re within 10%, it’s generally viewed as a win, right? Yes. Because
Tolga Hocanin:
Exactly.
Paul Barnhurst:
There’s usually quite a bit of cost overrun. So that, that’s great. And I, and I totally agree with you, being close to the data for finance is huge. Having that influence and that say, you know, you see more and more, say you see it more in kind of mid and smaller companies. You don’t see it in really large companies, but a lot of time finance owning data analytics or owning IT, kinda like you have, it’s becoming a more common trend because from my view, finance is perfectly positioned to kind of help make sure the numbers are presented the same way. And there’s not that, you know, we’re cross-functional, so we don’t have that dog in the fight to say, okay, this is how it should be for marketing. ’cause this favors me, or this is how I view this metric because it favors my group. Yeah. It’s just, here’s a standard, here’s how we report it. Let’s all agree and move forward.
Tolga Hocanin:
Yeah. And it’s not even just on the analytical side of things of how you present it, but I think you hit the nail on the head where it’s, it’s also data quality, data integrity, and making sure that you know, when those two partner together, it’s, you’re gonna have that much better data quality and integrity and things aren’t gonna change unexpectedly on you because you, it’s kind of in-house and you control it more.
Paul Barnhurst:
[Datarails ad].
Paul Barnhurst:
And I’ve been fortunate enough to meet many of the members of your team. You know, we’ve done some training with you over the years, and I’ve noticed you have a great culture. I know that’s something that’s very important to you. I’ve heard you talk about that. How do you ensure your team has a strong culture? What are the things you do, you know, how do you lay that groundwork from your perspective to maintain a strong culture?
Tolga Hocanin:
Really driving that strong culture is up to the people versus myself, I can say and do as much as I want, but they, they’re the ones that live and breathe it. So for me it’s how do I, uh, try and set them up for success and empower them to drive the culture that we wanna have? So I can talk about what my vision is, but at the end of the day, I gotta say here, how do you guys make that vision of having a great culture here and a great place to work? And how do you guys feel like we should be getting and achieving that? And if it’s increasing the number of activities or events that we do as a team, great. Let’s find the money and let’s make sure that we do that. If it’s about how we empower and we partner and we support each other on a day-to-day basis, okay, great. How do we go do that? And then you guys run the sh uh, run with it and make sure that that’s a, a key thing that we wanna live and breathe every single day. And really, it’s, it’s them driving it, uh, and me just helping empower whatever they want to do to make sure that we have the right culture in place.
Paul Barnhurst:
And was that something that naturally came to you when you went into leadership or was it a hard process to let go and just kind of empower and trust people to, Hey, you do the work, this is the expectations, I’m here to support and help you?
Tolga Hocanin:
I mean, I’ve read a lot of books and I’ve did a lot of understanding, but I mean, firsthand is always better than not. And I’ve had a lot of great leaders in my past, um, different managers, different presidents, different department CFOs, et cetera, that I’ve been able to see exactly what I would want to do or not to do. And, you know, one of the former presidents of, uh, PepsiCo Foods Canada, uh, really showed me exactly what I would want to be like as a leader and how to build the right culture. And a lot of what I tried to do, Lindt Canada really comes from his teachings, his learnings, and really trying to implement that here. And, uh, his thing was all about asking questions, really being an empathetic leader and really empowering people to drive what you wanna do.
Paul Barnhurst:
Got it. I I, I like what you said there. One, you know, the being an empathetic leader, you know, I, a lot of people sometimes have this idea that, you know, empathy is weak. And I’ve always thought empathy is the one of the most important things you can have. It’s really key.
Tolga Hocanin:
Absolutely.
Paul Barnhurst:
It’s how people know that you, they can trust you and they can relate if you’re empathetic and understanding, and really try to understand your employees. You know, I can remember my career often, okay, you gotta do it my way when it’s first a leader. And it’s like, doesn’t really matter as long as you meet these requirements. And I still remember one time sitting with somebody and told ’em this how to do it, and they’re looking at me and saying, well, I wanna do it this way. And I had to stop myself for a minute and think, okay, what really matters here. And if I came back, I was like, okay, as long as you can meet these requirements, because I know this is what the business wants. Do it however you want. And it was kind of a defining moment for me to remind me of the importance of one, you know, trying to be not so much empathetic, but trying to, you know, there’s empathetic in there, but understanding and letting people do things their own way. And remember it’s about the big picture, not how they get there per se.
Tolga Hocanin:
Well, and you empower them, but also, uh, they’re gonna have a much better buy-in to what you’re asking for if you give them the, the freedom, right? You tell me how you would best wanna do it and achieve this, and how do we achieve this goal together? And if they know that they can do it their own way, then they’ll have a bigger buy-in and, you know, lead the process a lot more than if you just said, just do it my way and get it done.
Paul Barnhurst:
A hundred percent agree, there is a, you end up with a better product, you got better buy-in at the end of the day when you get diverse opinions and allow people to work the way they work best. So you mentioned earlier, you know, you talked a little bit about, uh, why, and I know you’re a big believer in starting with the why to something, you know, why something is the way it is always asking that. Can you talk a little bit about your reasoning? Why is that so important that we start there?
Tolga Hocanin:
I’m a very big fan of Simon Sinek. Uh, so start with the Why. And, and I think your example that you just talked about before is a big, big reason of why you would wanna start with the why, right? If you just tell someone what to do, you’re gonna get a certain result. If you actually explain to the person why they need to do what they need to do and what why, uh, like what result you’re looking for, then they can truly think about, well, should I change how I’m going to actually approach this to actually achieve that? Why? So the what of how I’m gonna go about doing it might be completely different to achieve that why versus the way that you first told me how to do it. So allowing them to fully take a step back, understand exactly what the true goal is, and talk through exactly what they could do differently about that makes a world of a difference. And, and it goes, like I said, you have better buy-in because they understand the why and they’re invested in the process. They have the flexibility and the freedom to actually move or, uh, move and change how they’re gonna go about doing that. And regardless of what their process is to achieve that, they, that could change. But the how and the why is not gonna change, especially the why. And really you’re gonna get a better result because you started there.
Paul Barnhurst:
Got it. What, what about you run into the situation where you have sometimes people that look, just tell me the process, that’s all I wanna do. I’m kind of here to punch the clock and I don’t care about the why. Have you kind of experienced some of that? And if so, how do you kind of manage that?
Tolga Hocanin:
Yeah. And not everyone is going to be career oriented that wants to become a CFO or aspire to keep getting a promotion every two years, et cetera. And there’s gonna be situations where you’re time crunched and you don’t have time to really explain the why, and you’re just like, let’s get it done. Uh, yeah. In those cases, you, you just, you do focus more on the what than the why, but you do try and have at least a brief conversation about it versus just saying, get it done, do it this way and whatever. But again, it is person by person, case by case situation. And, but again, if you just have that person continue to do exactly what they’ve always been doing, never challenge the status quo, it’s never gonna get better. They’re not gonna get better. The process will never get better. And as business grows year after year, they’re gonna start struggling every single year as the volume of their work increases. They’re not figuring out better ways of working, and they’re eventually gonna drown in. So you, that’s kind of why you actually eventually have to take that step back and talk to them about that. But it might not be in every single moment that you have to explain the why.
Paul Barnhurst:
Sure. Yeah. There’s times when it’s like, okay, we just have to get this done. It has to be done by this time. Here’s what I need. Go forth and do it. And then there’s times you really are able to spend explaining and that, that makes sense to me. You know, another thing that kind of goes with this, we talk about this why and empowering people is the idea of a growth mindset, right? Mm-Hmm. <affirmative>, you know, Carol Dweck and that whole idea. So how has having a growth mindset helped you throughout your career, and how do you make sure you know your team, that you focus on that growth mindset with them?
Tolga Hocanin:
Yeah. I always encourage my team to challenge the status quo and really understand what they could do differently. And sure. And I, I’m big on self-development and bettering myself, but I also wanna make sure that we created an environment that failing or making mistakes is okay. Those are learning opportunities l uh, learning situations. Whereas I actually had someone in some unfortunate year end, but there was a, a one and a half million dollars reporting error. Am I gonna yell and scream and be mad at that person? No. We’re gonna have the conversation. We’re gonna understand exactly what went wrong, what could have been, uh, done about it, what would they do differently next time? What are the implications of this mistake? And who do we have to talk to and so forth. And really taking the time and really approaching this as a learning situation of how they could learn from that this mistake.
Tolga Hocanin:
A it’ll, it’s more, less likely, um, it’s less likely to happen in the future. Mm-Hmm. <affirmative>, they’re gonna actually get a lot of development out of this and they’re not gonna be afraid to own up to mistakes in the future. Whereas if you beat someone up for making a mistake, you’re, they’re more likely to hide mistakes, not own up to it, not wanna change their ways in the future. And long term you’re not gonna have a better situation. So I always push for that growth mindset to say, mistakes are okay, just as long as we learn from that. If you make the same mistake 2, 3, 4 times, then we have a problem because you’re clearly more of a fixed mindset. You’re not learning from it. You’re continuing to make the same mistakes and you know, we gotta move in a di different direction.
Paul Barnhurst:
Uh, and that makes a lot of sense to me. Right? If it’s a repeat pattern, then you gotta address it at a higher level than just educating and being, look, we’re all here to learn. Mistakes happen. I think one of my favorite stories ever heard is the, uh, is the CEO of IBM. It was in, I think in the seventies, one of the employees made a big mistake and ended up costing the company 30 million. He was one of the executives, you know, he got called in the CEO’s boss and he goes, I’ll turn in my resignation. And the CCEO looked at him and he is like, why? He’s like, well, I’m fired, right? He goes, no, I just spent $30 million to train you. You’re not gonna make that mistake again. Like, why? That was an expensive learning. I’m not gonna start over now.
Tolga Hocanin:
Exactly. <laugh>. And it’s, it’s funny, when you started talking, I knew the exact example. ’cause that would be my number one example as well as, you know, that that was just learning opportunity. And, and again, it’s an expensive mistake, but it’s still something we have to learn from.
Paul Barnhurst:
Yeah. And if you have somebody with a growth mindset, you’re gonna be better off for keeping them. Like, especially if it’s a one time, it’s a honest mistake that they learned from, like you said, if it’s a repeat pattern, that’s a different story. You gotta address that differently.
Tolga Hocanin:
Yeah. Or if the mistake was purely because of negligence or whatever, then yeah. That’s also a different story as well.
Paul Barnhurst:
Yeah, a hundred percent agree. Like the process was very clear. They’ve done it a bunch of times and they just chose not to follow it. It’s like, okay, now we got an issue ’cause you cost us a bunch of money because you weren’t doing what you were supposed to. Not because you made an honest mistake.
Tolga Hocanin:
Exactly.
Paul Barnhurst:
So, yeah, I know I’ve had more than my fair share of those. And I think most of us have. So fortunately I’ve had good bosses like you that have generally been really understanding. So I know, you know, you obviously spend a lot of time with other senior leaders being a CFO and talking to people across the business. What advice can you offer to leaders about developing meaningful, you know, relationships, those cross-functional relationships with your business partners
Tolga Hocanin:
Regardless of who you’re working with? Trust is everything. Um, and the one way that I’ve learned to really build the trust and to improve the collaboration or the interactions that I’ve had with anyone cross-functionally, is learning about that that person’s business. When you actually come to the table, you ask great questions, you’re vested in their business, you’re making an effort to learn about it, they’re more willing to talk to you about it. Be open. M not be as defensive. Because a lot of the times when finance comes to the table, people have their backs against the wall. They’re afraid because for many reasons they’re just afraid of finance because we’re the, the money police and we’re gonna, you know, take their money away. Be it the marketer’s afraid of losing their advertising dollars ’cause finance is coming and so forth. But if you’re actually at the table, you’re asking good questions.
Tolga Hocanin:
It’s all about how do we become, how am I a better business partner for you? Not a finance partner, but a business partner. I wanna have that seat at the table. And when they know that you’re invested, you’re asking the right questions, you build that trust and you’re gonna have much better interactions with them. And they know that they’ll be able to call you in a pinch because they trust you. Right. They’re not gonna say, shit, I gotta call finance because, uh, X, y, Z. It’s like, Hey, I’d love to get finance’s perspective on this because again, you’ve built that trust and they, they know that they can rely on you as a business partner. Exactly. So that’s where my biggest advice is always to build trust then, you know, however you wanna go do that. If it’s through coffee chats, lunches, being more into their business, whatever, just figure out a way to build trust and confidence in that person so that you can interact better with them.
Paul Barnhurst:
I a hundred percent agree. I couldn’t have said it better myself. And that’s one of the core things, you know, whenever I teach business partnership is I have the, you know, some concepts around trust and just saying that that’s core to it. It’s core to any relationship. And it’s true with a business partnership and you know, you wanna get to that point where you want them to wanna call you. You want them to want your advice versus, Hey, can we do this without finance? Right. Trying to go around and like, okay, we got it in our budget even though it’s not the exactly in our budget. We’ll just spend the money and deal with it later. And that just never helped strengthen the relationship. You know, like I knew, you know, one partnership I’ve had and I’ve had some that have not been good, but I knew in one of them was doing really well when the general manager commented that he’s like, you help me shape the P&L, you don’t just report it. Mm-Hmm. <affirmative> like, you’re here, you’re making a difference to the business. Like, I trust you, I want you in the room, let’s talk. And that, that that’s what you want. That’s when you know you’re doing things right. But without trust, that isn’t gonna happen.
Tolga Hocanin:
Yeah. When you look at the, the triangle, the, the hierarchy of the five dysfunctions of, um, you know, a leader, you know, trust or of team, sorry, uh, trust is at the foundation. The second level is conflict. You can’t have productive conflict and really challenge each other and have good back and forth conversations unless you have that foundational trust. Right. And then if you can’t have, you know, you the trust, you have the conflict and you have accountability, commitment and results, right? How are you expect to get to the top of making sure you get the best results if you don’t go through those other levels and the, the foundation, the very bottom is trust.
Paul Barnhurst:
Yeah, no, it totally makes sense. And I agree. You know, when you have trust, you can have healthy conflict. Because when you know someone has your best interest at heart and that, you know, they, they care about the relationship, then you can trust what they’re gonna say. Even if you may not like it and you can work through it, versus if you don’t trust them, you just kind of often you’re gonna be like, okay, whatever. And just like, let’s get this conversation over with,
Tolga Hocanin:
Or you’re overly defensive because you don’t trust that person.
Paul Barnhurst:
Yeah. That’s the other, right. They immediately, well no, no, that’s not right. Or whatever. I, I’ve seen both sides of that for sure. So here’s a question we like to ask our guests. Can you tell me about a time in your career when you experienced what we call a strategic moment? So you know, a strategic insight that later empowered change within the organization to help drive change
Tolga Hocanin:
Strategic moment. Um, do you have an example of one just so I can better understand
Paul Barnhurst:
That? Yeah, so I mean like, yeah, as an example, you saw some you saw something, an example I’ll give for my careers. There was this time where we were looking at ourselves and we were struggling and we noticed that certain salespeople were doing a lot better and we were able to find out the reason. And then, so we sat down with the sales team and talked to ’em and we were able to change the way we did things to help the sales team to be more effective. So in this case, the kind of the aha moment that we had, the insight that we noticed is we had certain OEM programs and other things, and we noticed when salespeople got those to start, those type of things where they had that backing, they did a lot better. We weren’t giving ’em enough support to generate leads, but if they had something and so we changed a bunch of things to try to, you know, better support the business.
Tolga Hocanin:
Okay. Yeah. Um, I’ll use something much earlier in my career, and this kind of talks to the mix management that we talked about before is when I was a, a sales analyst earlier in my career, I did a lot of different reporting and, and again, I, I saw different account that did better, not from a sales perspective but from a gross profit perspective. And that, and when I had conversations about, hey, how do they approach this and how do they manage it, it was like they actually leveraged the reports that I was putting out there, but in a different way to really look at their mix and how do they maximize not just their sales but the gross profit. And then when we actually had those conversations, it was more about how do we share those best practices with everyone else? And really I think that’s in my career when I understood how big of an effect mix management could have, right?
Tolga Hocanin:
So actually talking to the rest of finance, but also the sales team, more so the sales team, Hey, look how XYZ account approached their business to maximize their gross profit. They really over-index, they changed their, the feature po uh, program that they had. They actually featured these products instead of these products. And it actually, from a consumer perspective, it made sense this way, but from a PepsiCo perspective, it actually helped us because we actually make higher revenue on a per liter basis on this. So, you know, you have that conversation to give them real life examples of how they can change their promotional activity. Or the way that they set their shelves up to maximize their mix and their gross profit. And hopefully from a sales perspective as well, because they gotta keep the consumer in mind. And that’s what that account did a lot better is, hey, I noticed a trend of consumers wanting more portion control, so I did this right? So they actually focused on mini cans. Hey, mini cans is actually high revenue on a per liter basis ’cause it’s a smaller can, but it’s a, you know, people wanted to do it from a portion control perspective. You know, consumer was happy that’s what they were getting. PepsiCo was happy because again they’re getting, you know, shifting the sales to something that worked a little bit better from, for them on a, on a business perspective. So really seeing that aha and then sharing that out was absolutely huge to the sales team at that time.
Paul Barnhurst:
Yeah. I could see where that would be really beneficial, right? Creating a win-win in that situation. Especially in the last example you gave there where hey, the end consumer’s happy, you’re getting a higher margin and probably the middle person’s doing a little better ’cause there’s usually better margins all the way across on those types of things. Not just one side getting it all. Especially in those type of volumes. And so I could see where that would make a huge difference ’cause Yeah. You know, changing a sales approach to maximize that margin can be huge.
Tolga Hocanin:
Yeah. And then if you want to reinvest those extra margins into more activity to drive sales, then you have that ability to do so. And then that person actually not just increase their profit margin, but it also increase their sales. ’cause they could play, uh, with their variables a lot different than everyone else.
Paul Barnhurst:
Yeah. Makes makes a lot of sense to me. So we’re gonna move into the sections called the Get to Know You section. You get 30 seconds for each answer here. And we have four questions. It’s kind of just a fun section we do here toward the end. So the first one is, what is something interesting about you, something that makes you unique that not many people know?
Tolga Hocanin:
I would say for people that don’t know me post university, I was actually a radio DJ during university. I had a very big passion for music. Music and uh, so I was a, a radio DJ at my university at the time.
Paul Barnhurst:
Cool. And what, what type of music do you have a favorite genre or something you like to listen to?
Tolga Hocanin:
Yeah, more on the, the Rock alternative at that time. I’m more into the EDM and dance now, but at that time it was more of like the emo rock type of music.
Paul Barnhurst:
Okay. Fun. So, uh, do you still do any DJ stuff now or is that uh, long, long, uh, long past.
Tolga Hocanin:
Long past. Long past. I put that behind me after I left University.
Paul Barnhurst:
Oh, fun. That’s a, that’s a fun one to do. So next question here. If you could meet one person in the world, dead or alive, who would you meet and why?
Tolga Hocanin:
I’m gonna limit it to just people alive, just ’cause it’s complicated. If I was else but I would go with uh, mark Cuban. I think
Paul Barnhurst:
Why Mark Cuban?
Tolga Hocanin:
Uh, just out of all the different business people, investors, et cetera, he just seems to be the most, um, empathetic, well regarded, just thoughtful leaders, investors. He just has a great approach the way that he wants to take on Big Pharma though, how big into sports he is. Like I am like owner, well prior owner of the Dallas Mavericks, et cetera. Like there’s just so many commonalities there that I would love to just sit down and have a conversation about everything with him.
Paul Barnhurst:
Yeah, he would definitely be a fun one to have a conversation with. He’s, it’s amazing all that he’s accomplished, he
Tolga Hocanin:
Said. Yeah. And he is so down to earth as well, which is amazing compared to a lot of other big business people out there.
Paul Barnhurst:
Yeah, he’s definitely, a lot of people can relate to him and he, what’s great is he always you, you know what he’s thinking, he’s very willing to share his thoughts and, you know, express things versus kind of being one of those that’s very just polished and you always get the corporate answer so to speak.
Tolga Hocanin:
Exactly.
Paul Barnhurst:
So this next one is kind of a fun one we’ve, uh, added and it’s what is the last thing you Googled looked up on YouTube or used chat GPT or any other generative AI related to finance FP&A or Excel?
Tolga Hocanin:
Well my team tries to keep me at, uh, out of doing Excel models these days. So <laugh>,
Paul Barnhurst:
I can’t imagine why as a CFO.
Tolga Hocanin:
Uh, yes. I mean it’s still a passion. I love doing my own models and so forth. Sure. But I would say if I go back to the last thing that I did research myself, and this would be a while ago, but leveraging the index match. Okay. So it’s such a powerful formula within Excel that a lot of people don’t know or use.
Paul Barnhurst:
No, I agree with you. There’s a lot you can do with Index and with Match and that’s, that’s a great one. So that may uh, naturally lead into our next question. We might get a similar answer. What’s your favorite Excel function or feature?
Tolga Hocanin:
Well, this came from the training that I did with you that you, when you came and uh, worked with my team, it was uh, actually learning and using XLookup. So I’ve always been a v lookup kind of guy in my past, but I just saw the power and the usefulness of an X lookup versus that and I’ve been using that ever since.
Paul Barnhurst:
Great. I’m glad it’s, uh, worked for you. I always love to hear that somebody’s using uh, something I’ve taught ’cause you never know, right? You leave and you hope they gain something out of it, but you know, sometimes some people aren’t going to. So I’m glad it’s working for you and I’m a huge XLookup fan. It’s a great formula. Alright, so we’re nearing the end of our time. So we just have two questions here to kinda wrap up and then we’ll let you go. First one is, what advice would you offer to someone starting their career in FP&A today?
Tolga Hocanin:
I will go with what I said before, but I’ll add onto it. I mean, ask as many questions as possible and be curious. And then the second one is, uh, be open to as many opportunities as as you can be. So don’t limit yourself to say, Hey, I just wanna be on the marketing side of the business and work only in marketing finance, or be very silo. Like try every part of the business and be curious to really, truly understand what you like or don’t like and as well as it’ll really help you long-term in your career if you are well-rounded.
Paul Barnhurst:
I think that’s great. Be curious and ask questions. So important, uh, can’t understate that one enough. So last question. If someone wanted to reach out to you or get a hold of hold of you, what would be the best way for them to, to do that?
Tolga Hocanin:
Uh, I would probably just say LinkedIn. Uh, people can reach out to me and start a conversation if they want on LinkedIn. So Toga ho Cannon, um, on LinkedIn. Probably one of the only ones in Toronto, Ontario, Canada. Uh, so it should be easy to find.
Paul Barnhurst:
Yeah, I was gonna say probably not a real common name. I wouldn’t imagine there’s a lot of those in Toronto.
Tolga Hocanin:
No, not at all.
Paul Barnhurst:
So, well great. Well thank you so much for joining us Toga. I really enjoyed chatting with you, enjoyed and spending a little bit of time with you. So thanks for carving out some time for us.
Tolga Hocanin:
Thank you so much for having me.