You may not have heard of Cotopaxi. But you have likely heard of similar companies doing something different- Ben & Jerry’s, Allbird, Patagonia, and BrewDog.
What these companies have in common is B Corp certification. This is awarded to businesses for meeting the highest standards of accountability for social and environmental impact. Last year Cotopaxi also gave away $1.3million in donations as part of its pledges.
But how does an FP&A team work to advance this mission? How can FP&A work to achieve goals which are ultimately not about maximizing shareholder wealth.
Cole Dixon is FP&A Director at outdoor sports company Cotopaxi which has a tagline of Gear for Good on its high performance and eye-catching gear. For Dixon, the FP&A function at the company is central to “upholding a mission of our founders Davis Smith and Stephan [Jacob] that Cotopaxi can get us exploring and make a positive impact on other people’s lives. So we’re really truly committed that all of our products can be repurposed and that we prioritize human rights.”
Every FP&A metric – units per transaction, average order value, average store volume, the inventory returns for stores – also incorporates the company-wide mission.
Listen to the fascinating story from Cole Dixon in this week’s FP&A with Paul Barnhurst.
Cole reveals:
- The Ecommerce metrics and FP&A role that helped Cotopaxi to open stores during the pandemic
- How FP&A partners with marketing to succeed in new ventures, such as the outdoor gatherings (Questival)
- How Cotopaxi handled scenario planning and cash flow planning as stores closed during the pandemic
- How he dealt with his biggest failure at Skullcandy, the lifestyle audio brand where he managed FP&A prior to Cotopaxi
- How to build an FP&A team from scratch as he did at Cotopaxi
- The importance of constantly “looking forward” to finding new values for in FP&A
Paul Barnhurst:
Hello everyone. Welcome to FP&A Today. I am your host, Paul Barnhart, AKA the FP&A guy, and you are listening to FP&A today. FP&A 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 and discuss some of the biggest stories and challenges in the world of FP&A. We’ll provide you with actionable advice about financial planning and analysis today. This is going to be your go-to resource for everything FP&A. I am thrilled to welcome today’s guest on the show, Cole Dixon. Cole, welcome to the show.
Cole Dixon:
Hey, Paul, it’s great to be here.
Paul Barnhurst:
Good, well glad. We’re really excited to chat with you. So a little bit about Cole. Cole is from Salt Lake City, born and raised. So him and I have a little bit in common there as we were both born and raised in Salt Lake City. He earned his bachelor’s degree at Westminster College and an MBA from the University of Utah. And kind of interesting fact, we’ll share one here now and he’ll get to tell us another one later. He’s a four-year student athlete in golf there at Westminster and he’s worked in FP&A for the last eight years and he’s currently the director of FP&A for Cotopaxi. And I’m really excited about that. I’m a huge fan of Cotopaxi, but I’ll let him during the podcast tell us a little bit more about the company, but maybe if you could just go ahead and share a little bit more about your background and how you ended up in fp and a.
Cole Dixon:
Absolutely. Yeah. As you mentioned, Paul, I’m local born in Salt Lake and always stayed around. I fell in love with the surrounding valley and the proximity to outdoor recreation. That’s really why I’ve stayed here from an early age. My parents have really prioritized instilling that sense of adventure for me. So exploring and getting out, I think that includes multiple week transits on a sailboat from the Pacific Northwest up to Alaska. Got the chance to sail on the a GNC along that coast of Greece. Looking back on that now it’s really helped shape me as an individual. I’ve got my own little family and I’m really incredibly grateful that for that dedication that they really instilled the sense of adventure in me. My family’s been active in scouting. I grew up skiing, golfing, biking, really taking advantage of the world class slopes. As you know we have here locally in college.
I went to Westminster was a business major and at the time sophomore age, I wasn’t even fully aware of the FP&A field. I was heavily involved looking at a CFA personal finance classes, <affirmative> entrepreneurship, intern insurance even caught my eye. So trying to figure out what I was doing still. And in order to graduate with my Bachelor of Arts in finance from Westminster, I was required to get an internship and was lucky enough to have a connection up at Skull Candy at the time. So really one of the most exciting companies around. Mm-hmm. <affirmative> Fun Products. Actually wearing some skull candies right now. Republic at the time, interesting enough, had the highest short ratio in the NASDAQ for a moment there, north of 50% or so, revenue of around 300 million. Just a really fun brand to work for. Had some of the biggest names and both music and sports that we got to see on our roster.
So had an amazing time up there. Right. Got experience what a public company was like. Got all accounting roles starting in AR mostly, but was able to navigate that into a six year career at Skull Candy focusing on FP&A and found a true mentor there in Jason Hodel who helped me fall in love with corporate finance, the operational side of the business and how as an FP a individual we can make an impact on the financial health of an organization. So after about six years of Skull candy, I decided to take on a new challenge, which was helping a small organization less well known Cotopaxi. So about three years ago not quite three, but I joined Cotopaxi October of 2019.
Paul Barnhurst:
Great. Well no, I appreciate the background and when you mentioned the sports in the valley here and also mentioned Greece. Funny enough, I got to do a trip to Greece and did whitewater rafting in Greece and got to Kayak and the Adriatic Sea. So I can relate to some of the things you were mentioning there. Some of my adventures, this was a grad school transitioning economies in Eastern Europe, did a course over there for about 10 days. And so it was a great experience. So yeah, I agree with you. You can’t beat the outdoors here. It’s a great place if you love the mountains and for those who do a lot of skiing and just hiking and all those type of things, it’s a great place to be. But kind of getting back to FP&A, so Skull Candy sounds like a great opportunity to see a public company, learn from one of them here locally, see how FP&A works and kind of cut your teeth. And then as you mentioned, you joined a small, smaller company called Cotopaxi. So maybe could you tell us a little bit about Cotopaxi? I know they’re a Corp B, I don’t think a lot of our audience probably even knows what that is. So maybe just talking a little bit about their roots, their background and how a corporation B is different from most corporations out there.
Cole Dixon:
Absolutely. In the simplest form, it’s just another type of corporation. I think the most popular instances you see are going to be a C Corp and LLC. Those are probably the most popular names you’re going to recognize. Mm-hmm. Koi from our founders chose to go a different path and that’s becoming a B Corp certified as a B Corp. So obviously the founders prioritize that. It aligns with their overall mission. And what’s unique about that is that we’re assessed and scored by non-profit organization called BLab. So they give us the designation. There are certain benchmarks for social and environmental impact that we have to adhere to and there’s a score as well that BLab administers its score of up to a 200. And you have to essentially prove that you’re making a measurable impact in order to qualify to be considered to be corp. So the overall measurable items they look at are social issues the measurable impact on the environment, maintaining accountability and transparency. So that involves transparency on charitable giving, your supply chain, your material inputs, your labor practices, how you treat employees. Really all of the above. I think being a B Corp holds us to a higher standard compared to most organizations.
Paul Barnhurst:
And I know there’s a number of companies that people may recognize as B Corp’s, Patagonia being one Ben and Jerry’s is another one that I’m familiar with. And then there’s a number of malos here locally and a lot of other companies. I think All birds is one, if I remember right. That’s
Cole Dixon:
Right.
Paul Barnhurst:
I believe WarbyParker is in that group and some others that people may recognize. So maybe just a little bit, I know the B Corp stands for Benefits Corp. Cotopaxi has a pretty clear mission. I know their tagline. If anyone’s familiar with the goods gear for good, you see their shirts that say Do good and a real focus on that. But what does that mean? I know they do some things around poverty, sustainability. Do they give up certain percentage of revenue? What’s the requirements or what is it that they do on that front? Could you talk a little bit about that?
Cole Dixon:
Definitely it. It’s core to who we are our founding team, Davis [Smith] in particular, and Stephan [Jacob] really started the organization with the belief that outdoor products can get us exploring and make a positive impact on other people’s lives. So we’re really truly committed that all of our products are from recycle, the repurpose materials in factories that prioritize human rights. So at our core, our gear is made in a sustainable and responsible way. So as a consumer who chooses to buy that with their dollar, you’re supporting a company that prioritizes efforts to fund sustainable poverty relief. So really at our core, that is what every business decision we make revolves around. And not only are we a B Corp, we’re also really a leader in using business as a force for good. So we’re a member of a few other organizations. In addition to being a B Corp, we’re part of the Outdoor Industry Association, the Pledge for 1% for the Planets, sustainable Apparel Coalition, fair Trade certified, as well as climate neutral. So we see all of these in tandem with being a B Corp as just a different way to establish what a leader for business models should look like, the new practice looking past the bottom line and trying to figure out how we can make a positive impact on the world.
Paul Barnhurst:
No, great. And I appreciate that. So maybe can you talk a little bit about how working for a company with your mission beyond maximizing shareholder wealth, I mean know obviously they have to do that, especially being that they have venture back capital. There’s not a lot of firms that have started as a Corp B with that. I’ve read quite a bit and listened to some podcasts of Davis. So I know there’s a lot there. But how has that impacted your role as a director of FP&A? How has that been different for you to balance some other purposes beyond what you might typically see in a company?
Cole Dixon:
I think it’s really the typical response for public company or other organization that a finance team’s job and most of the other C’S job is to create shareholder value, drive shareholder value, and that’s ultimately the end goal for most companies. I think that’s really not the case at Cotopaxi. It’s an afterthought, frankly. We’re focused on being that model company that’s using their products, their value proposition to drive positive social change and ingraining that in every decision we do from initial concept phase all the way through where a product ends up in a customer’s hand. So getting us on the right track in all of those things and thinking about shareholder values and afterthought, making sure we’re being responsible in every single aspect of our business. Shareholder value is going to be a result of those decisions being a beacon for both our customers and other organizations around the globe proving that we can do business in a sustainable way.
Paul Barnhurst:
So speaking to that and that mission, how is your job different than maybe it was at other companies in FP&A? Has that made your job different or do you feel like your job is really pretty much the same in the sense your finance, your job is to make sure we maximize returns within some constraints that you have as a business? So maybe talk a little bit about what is FP&A is like day to day as you’re doing budgeting and working with the partners in comparison to other for-profit places that are a little different. I mean, I know they’re both for-profit, but your standard corporation, just maybe how it’s different.
Cole Dixon:
Absolutely. I think the FP&A day to day job, the overall goals are largely the same. That’s going to be pretty standard, very similar to the industry that I’m in, the outdoor industry, the apparel industry. So I think what’s different about Cotopaxi is that we do ingrain our foundation, giving our efforts to alleviate extreme poverty that impacts just about everything we do. So it’s not only a line on our P&L, but it impacts the way we market, the way we create products, which companies we choose to do business with, which customers we choose, et cetera. So more specifically on that 1% we’re dedicated, 1% or more of our revenue goes to our Cotopaxi foundation. From there, it’s distributed in the forms of grant to humanitarian organizations. That includes some big names, the International Rescue Committee, the , mercy Corps United to Beat Malaria. Those are a few biggest partners.
And in general, I think it’s not something you typically see on a company’s financials. Last year alone in 2021 , we gave away almost $1.2 million, including mass donations, which frankly blows us away in terms of the number of people we’re able to impact. It’s about 1.3 million across the globe and about 2% of total revenue was dedicated to help alleviate poverty. So from an FP&A standpoint, it’s not just another line item you have to budget for. It’s more comprehensive than that. It truly goes into every day to day decision is trying to align with our overall objective.
Paul Barnhurst:
Okay. No, fascinating. And so if I know Cotopaxi, in addition to be a Corp B, they’ve raised that venture capital I think was about a year ago. They raised some to expand internationally. So they’re obviously a high growth company really focusing on growing. I know during the pandemic they opened a number of stores. So maybe talk a little bit about how it’s been being in that high growth environment, especially looking to expand internationally, expanding your retail footprint in addition to your eCommerce. Because I know they started as pretty much digitally native with a flagship store, and now I think you guys have what about 10, 12 stores?
Cole Dixon:
That’s exactly right, yes. Yeah. So started as a direct consumer business. Vast majority of the revenue coming from just online sales. We also had a corporate event we called it Questival, just a unique marketing tactic to go get in front of colleges and another young people who wanted to get familiar with the brand and understand what we’re about. As far as of key metrics. we’re an omnichannel business. We’ve grown from that purely digitally native brand and now have an omnichannel approach where we’ve got a kind of unique flywheel that all of these various channels and strategies connect to help grow the brand. So in terms of where we started the direct consumer brand, we’re focused on the e-commerce side, looking at sessions, the high cost, low cost traffic that we’re seeing, what our conversion rate is, how we can bring more folks, and really driving top of funnel awareness.
Cotopaxi is well known here locally, maybe even the west, but how do we take that next step to grow internationally, as you mentioned, and really across the United States as well. So yeah, focusing on really awareness, that’s a key metric for us. On the direct to consumer side, we own our own retail stores as well. You mentioned we have about 10 stores really across Utah, Washington, Colorado, California, and going even further as well, looking at Midwest and East Coast down the line. But in that channel in particular, we’re looking at some other key metrics like units per transaction, average order value, average store volume, the inventory returns for store. And we’ve also got other business segments. I mentioned the omnichannel approach on the B2B side, business to business side of the channel strategy. We’ve got the wholesale team, international customers, and what we call the corporate channel. So obviously on the wholesale side you’re going to think of REI or DSG, Shields, some of those big box stores that we partner with. International, it’s more the distributor model, and the corporate channel is more local companies here that like to throw Requestable events to improve their employee experience. So on that side, some similar metrics looking at sell through performance, sell through data, which products are working well, velocity to those sales, how many doors we have sales per door and average order value as well for those channels.
Paul Barnhurst:
So a lot of typical, it sounds like kind of retail e-commerce, not just e-commerce but digital. But different retail metrics, understanding the average order value, the what’s drawn to the website. Each one’s a little different, but I would imagine all those metrics are really driving revenue, which you can then figure out what’s it, okay, what’s our expense profile, what can we spend based on what we can generate in revenue outside of cogs, I know obviously retail, huge cost, a good sold component there. Your biggest expense I would assume. Yes. Followed by salary. So maybe you had mentioned a Questival. Could you just for our audience, just so they know, maybe give us a one minute, what is that and how did that kind of marketing event maybe help drive Cotopaxi?
Cole Dixon:
Absolutely. I think it’s one of the most creative marketing tactics I’ve seen deployed, and especially for a young and growing company. The basic premise of the event is just a small entry fee, which covers your backpack and likely a t-shirt. And that gets used access to the event. So you get your code backpag, your T-shirt, and we leverage our internal app. So we’ve got a Questival app where a team logs on and there’s various challenges. It’s an adventure race, so you’re running across all over town doing these activities that are mostly involved with doing good in the community. So giving back in some shape or form, also getting out your comfort zone is a big part of it. So it’s a great way to bond with new people or your existing friends and family and a fantastic way to get our brand image out there and really what our core value proposition is to customers. And that’s to do good.
Paul Barnhurst:
Okay. Now I’ll just add a little bit to that. I know when they started those just for audience, kind of fascinating, they had a couple of llamas, which is their mascot and college campuses 24-hour activity where you’re doing a combination of outdoor and service activities. So really creative way to drive lead gen. I think it would’ve been fascinating to kind of analyze that from a finance standpoint and see the revenue that it generates. Talk a little bit, and I’ll share an example here. I know Cotopaxi does a very good job of tracking its customers. And I know because I’ve signed up and if I go on the website, I get a text message saying, Hey, we saw you were looking at such and such sure and pretty regular messages. It seems like you guys have a very good marketing program to connect with your customers. So maybe talk about from a finance standpoint, how you manage the marketing spend, how you look at the metrics and just kind of as a company, how you guys think about that and how you as a FP&A professional ensure that that marketing spend is being maximized.
Cole Dixon:
Absolutely. I’m glad you brought this up. I think when we talked metrics earlier, I had skipped over a lot of these, which is customer acquisition costs, both acquisition and retention costs and just cost to reach other thousands of other potential customers. So how we managed at Cotopaxi, right, it’s typically seen as a percentage of revenue. We also track high cost and low cost sessions. So certain platforms like Facebook or other types of social media are typically higher cost as whereas a lower cost would be a Questival event an email or an SMS text message, a little lower geared to somebody who’s already familiar with the brand. Where we see the higher cost is trying to spread awareness, trying to get in front of people. It has a lower conversion theoretically, but also is beneficial in terms of expanding the overall pool. And it is one of the top spends at Cotopaxi. It is for most companies. In terms of marketing outside of per and cogs, I think marketing is probably third place and something we monitor flex up or down significantly. Obviously as we’re a growing brand, it’s been a massive investment for this year on the customer acquisition side, driving top of funnel growth in order to obviously drive the order count as well.
Paul Barnhurst:
And so what question for you, what advice would you offer to our audience and people about partnering with marketing? Because I know often finance and marketing can get at heads because marketing, it’s very hard to attribute that dollar that was spent actually generated a return. Where did it come from? Because you’re omnichannel and doing a lot of different marketing. So what advice would you offer to people in FP&A about one, thinking about how you contract things and partner with marketing so you don’t run into those kinda loggerhead issues of budget and overspend and the challenges and just the difference of how marketing thinks about things and how finance thinks about things.
Cole Dixon:
Yeah, absolutely. I think on the finance side, it’s incredibly easy to get into that score keeping mentality. Month to month, we missed our EBIDTA target, we beat the EBITDA target and influencing your reaction based on that. I think what’s worked best for me in partnering with the marketing team is to see a little bit of a broader horizon. In particular for a brand that’s trying to grow our awareness. We’re not going to see these investments pay off in the next three to six months. It might be 12 to 18 months. So on the first side of that, I think understanding the bookings, the traffic they’re driving, the overall way they’re growing the business in terms of total sessions or traffic is incredibly important. And there’s value to add to that, right? Even though it didn’t actually turn into a transaction, getting in front of people is incredibly important. So I think the best way I’ve seen partnering with marketing to reiterate is not necessarily focusing on short term or past results and having a longer term horizon for your expectations.
Paul Barnhurst:
That makes a lot of sense. I could see that long term horizon and working with them to understand the long term benefits, what it is.
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So another question here that I wanna get your thoughts on is I know you’ve been with cotopaxi for a few years, so you were there during the pandemic and I know every company experienced the pandemic differently. But maybe could you talk a little bit of working for a small kind of startup retail environment where all of a sudden everything was shut down. How was an FP&A a person you managed through that, what that was like? Maybe just take us a little bit through that experience and how you guys experienced it? I know like Amazon, there was explosion to growth. I know there was probably a mix for you guys and I think you had some stores and warehouse and you also had your e-commerce channel. So maybe just talk a little bit about that.
Cole Dixon:
Yeah, absolutely. So obviously joined Cotopaxi in October of 2019, so was about six months in when this all hit. And it was a challenge. I think scenario analysis is an understatement just iterating over and over again to really make sure that we’re not making a drastic decision that’s going to inhibit future growth. So a lot of tough challenges. I think seeing our retail stores completely shut down that was one of the hardest things we had to do. Obviously if the stores are not open, we can’t employ those individuals who we call our retail guides who manage our stores. So that was an incredibly difficult decision. Our own warehouse as well. Just new standards s had to be implemented both at our headquarters, our office down there at 74 main in Salt Lake City as well as our distribution center. I think on the FP&A side, it was just pulling out all the stops nothing’s sacred anymore.
Let’s see how we can use this as a trial in order to shine a light on areas that we need to improve on and double down on those improvements. So we came out of the pandemic with some great success and I don’t wanna understate how tough it was during those times and some decisions had to be made, but we as a team made a pivot towards mass sales and doing it in a different way than really anyone else out in the industry that I saw is that for every mask we sold, we donated one. So kinda that one for one similar to the Bombas or Tom’s shoes type method but in a time that people truly needed it especially people outside of us and poverty stricken region. So Doting Mask was a huge value proposition for us that we offered to consumers and they bought in a big way.
So we sort of pivoted from our typical product roadmap and turned those around immediately. Not immediately but just months rather than half a year or a year, which was a tremendous effort from the team and it became really one of the top sellers and margin drivers for the business. Not necessarily this year but more looking 18 to 24 months ago. And the learnings from it have been pretty amazing. I think the takeaway for me is just the strength and the executive team and the team they’ve built around them. The willingness to roll up the sleeves when the world’s in chaos, the willingness to commit their time, their weekends, their nights, to walking through all these various scenarios and helping make the best decision for the company. And looking back in hindsight, we made a lot of good progress that set us up for some great growth.
Paul Barnhurst:
No, I still have a couple of those masks upstairs somewhere. I hadn’t had to wear one for a while, but I remember them doing that. And so kind of speaking, what was the, talk about the executive and learning a lot in a business, doing a lot of scenarios, but what was maybe the one key from an FP&A standpoint take away from that whole experience that you’ll take with you moving forward as you try to be a better FP&A professional? Was there one or two kind of key takeaways for you personally?
Cole Dixon:
I think it really comes back to the scenarios. Having at bare minimum a best case middle and worst case scenario. Because the one thing you can guarantee is the change is constant no matter what happens, no matter how stable you think your business might be. Events like this happen where you have to question if you can make the next payroll. You have to question certain partnerships and vendors and try to revisit everything. And I think the one major takeaway for me is just modeling cash flowand being sensitive to changes up or down.
Paul Barnhurst
Did you guys change the way you modeled cash flow? Had you’ve been doing it all long, did you do it more often or how did that change for you? Because I imagine that was a real tight time.
Cole Dixon:
Absolutely. Yeah. So we did change cash flow. Typically we do the entire three statement model each quarter. So just quarterly forecasting, obviously intra month we’re working on that next revision. So it’s sort of a continual process looking at rolling 12 months if not longer, the three to five LTFM year timeframe in that moment, right March of 2020 through really the summer. It became a daily if not weekly exercise where we were creating different scenarios, different models pulling from here given back there. So it did radically change how we modeled in that short timeframe.
Paul Barnhurst:
No, that makes a lot of sense. I can remember doing a lot of those things not so daily, but around cashflow and different things and managing as tightly as we could. It was definitely a unique time. Thank you for sharing that. What would you say for somebody who wants to work in a startup environment kind of FP&A, I know a company has to hit a certain scale before they bring in somebody full-time FP&A, but what advice would you offer for somebody who wants to work in that type of environment?
Cole Dixon:
Absolutely. I think it doesn’t have to be a finance background necessarily. I think you can start practicing FP&A tactics in any really field you’re at. Whether you’re a budget owner who works at marketing or product or if you’re just on the accounting team. I think back to that score keeping mentality. If you’re only looking at past results, it’s gonna be hard to influence decision making going forward. So how do you look forward? How do you add value to team members across your organization? And I think even if you’re not on the FP&A track as any member of a company, if you have that mindset of forward looking rather than backward looking, I think it’ll be helpful in starting your career in FP&A. Just having that mindset of how do I add value forward looking, not necessarily just measuring KPIs and looking backwards.
Paul Barnhurst:
I really like how you mentioned looking forward, right? Cause that’s really what FP&A is about. It’s helping create value going forward. Accounting takes care of the reporting, what happened and obviously we have to analyze it and understand it, but that analysis and understanding of it is to drive it forward. So I think that’s really good advice. Whatever role you’re in work field, I wanna get into FP&A is be able to be forward looking and so I appreciate that answer there. So question for you here. As you look back at your career now, is there one accomplishment that you’re most proud of? So if I had you in a job interview and I asked you that question, what would be the answer give me?
Cole Dixon:
Yeah, I say a lot to be proud of. I think one pivotal moment for me in my career was at Skullcandy. I sort of reached my point in my FP&A career where I was leading a team and had seen some dramatic changes happen. The sale of a company called Astra Gaming, obviously the leveraged buyout was a public company and gotten taken off the market by the private equity firm. So a lot of transition and in that moment a lot of testing, a lot of cost-cutting exercise optimization, all business need focusing on cross margin in particular. In that moment I was sort of a senior analyst, manager of FP&A. Had a team of two is all- a director of FP&A above me and the CFO. I had those two individuals leave both within three to six months of each other leaving me as the sole finance lead for Skullcandy at the time.
And I looked back at that moment late nights hard work stress had a young family as well. And in the moment I think it felt like I was going through fire. I look back at it now thinking about that was a pivotal moment for me to prove out that I love FP&A work. I love corporate finance and I think the impact you can have in this role is so amazing. And part of the function I love the most right, is your ability to be important to the company, have your hands in all decision making processes and truly add value to those respective team members.
Paul Barnhurst:
No, I like that answer. And it sounds like you thrived as best you could in what’s a challenging situation. You had to step up and probably do things you hadn’t done before, figure out things that you hadn’t figured out before as you’re being that primary finance contact for the company.
Yes. And looking back on it now, I think that helped tailor how I approached Cotopaxi, The first FP&A team member I hired there. There was essentially a top down model that was managed by the executives, I helped bring on some new practices, right? Implemented an EPM tool, helped turn it into more bottoms up forecasting, longer range forecasting, adding some of those nitty gritty details that are worth spending time on and help drive the accuracy to forecast.
No, great. I could see where that definitely would help and have to build all that at yet probably build a lot of process and bring that discipline because the executives, yeah they’re gonna plan and they’re going to forecast. But I’m going to guess it was a little different than when you come in as an FP&A professional and start putting those processes in place. So how did you manage being new, speaking to that, changing things, if I’d kind of been done by the leadership, was there a level of kind of sensitivity you had ? Was there any kind of sense of ownership of hey this is how we’ve done it, or is it pretty much, hey you’re our new FP&A guy, tell us how this should work. How was that kind of experience?
Cole Dixon:
Frankly, a little bit of both came and on established brand, not necessarily very well-known across the overall country, but had a brand image that was well perceived across the city of Utah and the west here. And some practices in place that were really top of class. I think where I came in and kudos to the executive team, Gary Bow and the CFO they hire people across the organization that are experts in their respective field and they enable them to go implement some of these best practices and best tools. So I got the sort of free will from Gary to go do a lot of these things where I was helping then pass the responsibility back onto the budget owner or the sales channel leader to own their respective P&Ls or expenses.
Paul Barnhurst:
Great. Now it sounds like you really had a fair amount of free reign and the leadership allowed you to just come in and do what needed to be done. I mean I’m sure there’s always some pushback, but I appreciate that. So as you look back at your career, gonna ask one more question related to career here. This is one we’ve started asking people, it’s always interesting to see is what’s one of the biggest career failures? And I use that term loosely cause I think those are learning experiences that you have had maybe an analysis that went wrong, budget that fell apart. And what did you learn from that experience? What was the takeaway?
Absolutely. I think the one thing I can point back to is was during a budget cycle, missing a key vendor and a vendor worth about $750K per year cost to Skullcandy at the time. And that was NPD group. So obviously that number is a guess, but it was a massive miss on the budget side. I think it was one fourth of that team’s budget or so. And both the budget owner and myself, we missed it, I missed it in plan. Of course that subscription’s not going away so you had to get it back into plan and then analyze the budget to go pull some stuff outta that. So some incredibly hard conversations that had to happen, both the ownership of the mistake, that’s part of the reconciliation of look, we missed this, let’s pass that up to chain of command. And then being solution oriented I think rather than just hide in my cave and wait until somebody notices, being proactive on that issue is what I took away most from that experience is that people mess up, people make mistakes, it’s a guarantee that it’s gonna. I think it’s just being proactive with communicating it and giving yourself as much time as possible to adapt to that change, whatever it may be. So you have as many leverages as possible in your pocket rather than waiting. That’s probably the biggest takeaway I learned from that particular experience.
I would agree mean you needed to be proactive in own it. I still remember one time and I didn’t know what was going on, I figured it out, but I had a new boss and he was asking about something in the P&L that made no sense and the guy kept dancing around it giving all these crazy answers and I come to find out he didn’t wanna admit something was missed cause he was worried about some people getting in trouble. And I just turned to him when I figured out, I’m like, just own it. Just tell him what’s going on. Let’s just move on. We’ll figure it out and finally say yeah, this is what happened. And the guy literally wasn’t upset, he was more upset that they danced around it and wouldn’t give him a straight answer and was just totally confused. And it was a good reminder to me when a mistake happens, just own it. Say what happened and move on. Take ownership for your part, don’t throw people under the bus. We’ve all seen that. Take ownership but just own it and move on best you can agree more.
So I think that’s a great learning experience. I’ve had some of those as well. I think anyone who’s been in budget long enough has had those type of mistakes where you’re like, I missed that. I mean we had one year where we messed up to seasonality and we were off by a couple million dollars because we thought we were taking it off a low quarter with a certain number of weeks and it turned out it was the high quarter. And so we built the whole year off that high quarter and it was really, it was wrong and that was not a fun one to explain. So I can relate. I’ve been there. I think we all have. So this is a little bit more of a personal question as we come close to the end of our time here and we like to ask everybody this. So this is a standard question we ask, what is something unique about you that you can share with our audience? So something they wouldn’t find out online?
Cole Dixon:
I think we mentioned earlier, I’m a really avid golfer, so I’ve taken a backseat a little bit on the golf course as I focused on my family and career. But really the more unique part and success story of my golfing career is that I’ve got two hole in ones so far in my lifetime. Nice. And the unique part about it, obviously using a hole in one is really rare, but it was with the exact same club and pretty much the exact same distance. So the club being a seven iron and the distance being about 175 yards.
Paul Barnhurst:
Nice. And so speaking of golf, what’s your best score?
Cole Dixon:
My best score is down at San Hollow Resort there outside of St. George and it’s 200 par.
Paul Barnhurst:
Nice. Yeah, good score. Anything under par is a great score. So congrats. Thanks. All right. So next question here, we’d like to ask everyone this and it’s fun to see people’s different answers, right? In FP&A we all use Excel or we all have. And so what we like to ask is, what is your favorite can be Excel formula kind of function feature? What is it you like most about Excel?
Cole Dixon:
Yeah, absolutely. A lot of ways to go with this question. I think just the general favorite Excel formula involves like a nest ASIF statement. Leveraging index and max choosing match are also super important for the day to day functions. But Paul, I think there’s nothing more satisfying to me than a longer iIF statement that has multiple drivers and you hit enter and it works exactly as you spec. I think a good example for Cotopaxi is are retail stores. So the retail rent has so many different variations. It can be a percentage of revenue, it can be a base has CAM and taxes and a lot of different components to it. There can be a break even formula as well. So nailing that if statement that has multiple components of it, I think is my favorite Excel formula.
Paul Barnhurst:
Yeah, when a formula goes right, that’s complex it always feels good. I can appreciate that. Mention index match, obviously we use those all the time and those are some great things as well. So that’s good. I’m glad that you’ve got ‘them to work for you. Cause I’ve had a few that have taken some time
Cole Dixon:
<laugh>. I know exactly what you mean there. Yeah, it takes half an hour at least at times.
Paul Barnhurst:
Yes, I remember I used to do coding my first job out of MBA and it’s a lot of SQL and you’re spending it half a day trying to find the error of like, okay, why? And it’s always something simple. So as you look atFP&A, you look at how it’s changed over your career, you know, look at all the uncertainty we have in the world today and just more and more data things constantly changing. What do you see as the biggest challenge for FP&A and then what do you see as the biggest opportunity for the profession going forward?
Cole Dixon:
Yeah, absolutely. I think the biggest challenge, and maybe I’ve mentioned this once or twice, but it’s being a valuable team member in any type of decision-making process. So not getting siloed on that finance or accounting team. It’s branching out even further. So helping marketing evaluate product colabs or helping the product team understand returns and driving insights there and being a valuable team member, both in the analysis side but also forward looking of how do you project those risks to the overall business and be a part of the overall company. Not necessarily just the FP&A team, the finance team being a member there, but expanding that reach. I think that’s gotta be the biggest challenge for an FP&A professional going forward.
Paul Barnhurst:
That makes a lot of sense. Expanding that reach and getting that seat at the table, being a part of the decision so you can create value. What do you see as the biggest opportunity?
Cole Dixon:
Yeah, I think similar vein, right is branching outside of finance for me in particular was learning all aspects of the business forCotopaxi. So our omichannel approach that I mentioned, obviously getting a little more familiar with the e-commerce conversion metrics and acquisition costs and all that stuff. Being willing to dive outside of just financial data, the P&L, the three statements. I think that’s the big opportunity where you can tailor your skill set to apply for your overall career going forward.
Paul Barnhurst:
Okay, great. No, I appreciate that. So last question here for you and then we’ll wrap up. What advice would you offer to someone starting their career today? Who wants to work in FP&A?
Cole Dixon:
Yeah, absolutely. I think just being willing to reach out and have that FP&A mindset. So even if you’re on an accounting team or just a finance role, being willing to have that forward looking mindset, that growth mindset. Understanding the challenges in FP&A team, right, is we’re trying to project cash on a forward looking basis and risks to the business. You can take that approach in really any role you’re at today and start to branch out to folks in the company who you see have influence on that and have key metrics they’re tracking and try to understand the best you can. So that that’s overall my advice for somebody who wants to work in FP&A. You’re not gonna necessarily get an FP&A a role out of the shoot. It could be a basic AR AP analyst level role. But I think having that mindset showing that you have the broader horizon, that mindset is gonna help you get a career in FP&A.
Paul Barnhurst:
That makes a lot of sense. And I agree a lot of people may not start their career in FP&A. You may start out, like I said, AR or other areas of the business within finance and work your way up and learn the ropes. So having that right mindset to help you learn, I think is critical. Well Cole, we appreciate having you on the show today. We appreciate learning a little bit more about COTOPAXI and some of your experience in the outdoor retail industry and working for a B certified corporation. I think you’re the first one we’ve had on in the outdoor that primarily has been in the outdoor industry and also has worked for Corp B. So we appreciate you sharing a little bit of that experience and thanks again for being on the show.
Cole Dixon:
Thank you Paul. I really enjoyed it.