“I have been at the inception points of three companies-Intuit, Netflix and Mozilla Firefox. And now I’m just trying to give back as many lessons as possible” Jim Cook
Jim Cook shares his front row experience as first finance hire at streaming giant Netflix. He reveals the finance business partnering lessons learned from supporting fellow co-founders Marc Randolph and Reed Hastings building the company from obscurity to one of the biggest brands in the world.
How did finance at Netflix contribute to the design of the first red envelopes? What are his lessons that can transform your FP&A?
In this episode:
- Coping with unrealistic budgets experience at fast-growing startups such as Netflix and Mozilla Firefox
- What it’s like as Finance Hire #1 at Netflix
- Rebirthing the browser market at Mozilla Firefox
- Lessons from M&A and IPO at Intuit
- Lessons to deliver blockbuster FP&A
- The FP&A as CEO
- The power of a “listening tour and finance partnership”
- Using your voice in FP&A
- What storytelling really means for a finance professional
- Two strategic finance moments that changed the game for Intuit and Mozilla
Show notes
Netflixed by Gina Keating (Amazon)
That Will Never Work, Mark Randolph (Amazon)
Netflix versus the World. (Full Documentary, YouTube)
Five lessons I learned from Netflix – Jim Cook
Paul Barnhurst:
Hello everyone. Welcome to FP&A Today, I am your host, Paul Barnhurst, the FP&A Guy. FP&A Today is brought to you by Data Rails, the financial planning and analysis platform for Excel users. Every week we welcome a leader from the world of financial planning and analysis. Today we are delighted to be joined by Jim Cook. Jim, welcome to the show.
Jim Cook:
Hey, Paul, super excited to be here.
Paul Barnhurst:
Really excited to have you. So I’ll give you a little bit about Jim’s background, and then we’ll give him opportunity to introduce himself a little further. So he comes to us from the Bay Area in California. He studied finance at U SC. Go Trojans, right?
Jim Cook:
Yes,
Paul Barnhurst:
<Laugh>. He’s been a CFO of multiple companies. He currently runs his own consulting practice, and he has a long history of joining companies during the startup phase, including well-known companies such as Netflix and Intuit. And before I give him an opportunity to tell us a little bit about his background, we’re gonna start with a fun question here first. So, thinking over your career, what’s the worst budgeting experience you ever had?
Jim Cook:
That’s a good one. Basically not having one and, and the company not knowing how to run one and saying, so Jim, just run the annual budget. And they had no clue and didn’t really wanna run an annual budget. They just wanted a spreadsheet. So it, very early days. It, some of these companies, it’s like that.
Paul Barnhurst:
And so what, what made that so bad? Why is that such a big problem?
Jim Cook:
Oh, they just expect one person to produce all the numbers. And the opposite could be. We’ll, we’ll probably get into this later, but, but the opposite is really as, as we all know, most of your audience probably knows, is exactly what we don’t want. We want, we want the owners of these numbers to own the creators of these numbers and these departments to own the numbers. Not just give me my budget. The, give me my budget is a big problem.
Paul Barnhurst:
A hundred, a hundred percent agree. I mean, ’cause then you get into a meeting and it’s, well, I didn’t sign up for that number. I don’t recognize that number. And it’s always finance’s fault every time anything goes wrong. So it’s almost a kind of creating that culture that says we don’t have to take responsibility if we’re not involved.
Jim Cook:
The, the word culture there is perfect. That is exactly how I think about it. The culture of finance and the culture of a financial partnership is something that I talk a lot about, and I’m sure you do too.
Paul Barnhurst:
Yeah. And we’ll, and we’ll definitely get into that. So what was the one key takeaway from that experience that you took with you?
Jim Cook:
Start early, start often partner deeply with the people that are running the company in every functional area to be their partner and to not be the finance corporate policeman, but rather really be their right hand partner for everything that they wanna know about finance. And bring them the answers and bring them insights and, and develop a relationship with them. Because if you start there, then the budgets just flow and, and you can help them own their numbers. But from what the one takeaway, the big takeaway I had early in my career, I think most people have it, is this aha moment when you realize that the head of engineering, or the head of marketing or the head of sales didn’t study finance at school. Hates finance and hates budgeting and, and doesn’t wanna admit it, that they don’t know much about it. And so they hide behind their, their lack of knowledge of finance and just want you to do it all for them, which is really detrimental to them and their career, and it’s detrimental to the partnership and to the company at large. And so, breaking down that wall and getting them to admit what they know, what they don’t know helping them understand what you can bring them and the insights you can bring them, that’s the real starting point that a lot of people skip, but you have to start there.
Paul Barnhurst:
Totally agree. That’s a great point on that. So now we’ll give you an opportunity. Can you just tell us a little bit about your background and how you ended up where you’re at today?
Jim Cook:
Yeah. I’m a Midwest kid. I grew up in Ohio and so small town Ohio, where I lived on 40 acres and, and had a lot of freedom. So I think I was ta talking to somebody about this the other day. I think that produces a lot of creativity. You have to make, you have to figure out what you’re gonna have fun doing today with, with not a lot of friends around with a lot of, with a lot of acreage. And I think that breeds a certain type of entrepreneur. And so I’ve been told I’m a different kind of C F O and I didn’t study to be a C F O. I actually, you said study finance at SC I actually got a scholarship to USC in the engineering school. Okay. that’s, they sent me a letter my senior year saying, we want you to come.
Really interesting. So I studied engineering aerospace for two years. But I didn’t really want to be an engineer. I wanted to be a doctor. And I didn’t even realize you couldn’t be a doctor. There wasn’t a a, a pre-med major. There’s only nine classes in the mcat. So I was doing engineering nine classes in the mcat, and then I decided I didn’t wanna be a doctor. And I ended up doing the five-year plan like many people do. And studied finance and fell in love with the people, the concepts. I was obviously really good at math. And so that’s my, that’s my journey. I got recruited up from there to Silicon Valley to work for a defense contractor in the late eighties, 89 actually. Which one? Ford Aerospace.
Paul Barnhurst:
Okay. I, I worked in the defense industry. That’s where I started my career.
Jim Cook:
So great foundational. The CSSE government accounting, you know, cost schedule, system control criteria trained in that, certified in that variance analysis. It was eight week program fresh outta school. I thought this was the way it was, but in government programs, you, I was required to track every six minute increment, not only for myself, my department, but everyone else with 0.1 timecards that got punched into computers and things. And it, I was, I was literally dying. It was, it was suffocating. So when I got the call, when I got the call from a good friend up in Silicon Valley, I was in the valley saying, you gotta come work for this company. It’s called Intuit. It’s a hundred person company at the time. And we’re hiring our first finance person. I jumped at it. And then I much like business finance understanding finance at USC I fell in love with the whole commercial aspect of software, and I never looked back.
So the journey’s been, you know, I basically got three, spent five years at Intuit, but probably 15 years equivalent of having everything thrown at me. I wasn’t married. I was probably working 16, 18 hours a day if we went public. They threw the SS one at me and said, you have to lead this and write it and draft it and work with the lawyers and work with the, it’s just how it worked. My CFO, who’s brilliant, Eric Dunn was off coding Quicken for Windows. And he’s like, you have to sit in the you know, exec staff meetings on my behalf. You have to <sit in the board meetings and take notes. I, I wasn’t a leader by any means, I was just the, the, the kid in the back room. We were 3,500 people, five business units, right? And, and we were a public company that was worth $4 billion.
And so the growth of a hundred people to 3,500 people from you know, IPO and M&A and as was just tremendous learning at the right age, right time, and at the right stage of Silicon Valley, 1991 to 1996. So I leapt into it, joined one of the first e-commerce startups, or only three: internet shopping network. There was Amazon CD Now, and lasted about a year and a half before Barry dealer sold it. And then I got another call from to a colleague saying, Hey, you’re the only e-commerce expert we know. In 1997, I’d been doing it for a year and a half. And that company was Netflix first six. Well, I was, I was brought in to be the expert, you know, all things finance ops for not the Netflix. You know, today, I have to remind people, this was 25 years ago.
We just celebrated the 25th anniversary last year. But it was the disc shipping company, which there’s been books written about Netflix versus the World is a great documentary on Amazon. And yeah, so it’s just a great story of again, scaling a company, learning designing the envelopes, shipping the envelopes, knowing anything, everything about the UPS Postal Service. But, but really hands-on, I guess I’m a hands-on. I’m really hands-on, really curious, really operational, have a finance background. My, my third, you know, company, many companies, but the third major company was Mozilla, Firefox. I got a call again from the network my personal network saying we need help. And there were 18 people there, and we, they had just launched Firefox 1.0 in 2005 when the browser market was dead. And we rebirthed the browser market from zero.
Microsoft had 99% market share of the browser market in 2005. And we said, there’s a better way. And so I’ve just been at the, at the inception points of, and had three looks at three companies that have scaled pretty well with so many lessons learned. And, and now I’m doing, I’m just trying to give back as many lessons as possible, best practices, best ofs. It’s how my brain works when I’m met you at, we’ll get into this at, I’m sure at the OG conference we talked about the best of and the best practice turning back. And I think that’s where we connected. So, nice. Yep.
Paul Barnhurst:
It, it totally, it totally was. Thank you. Great story. And some, some great names. Right? Intuit, Firefox, and Netflix. Anyone who knows Silicon Valley recognizes those three companies for sure.
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So this next section is kind of fun one we do, and we’re gonna see if we can hold you to this. You get no more than 30 seconds to answer each question. So here we go. You get four. What is something interesting about you? Something we wouldn’t find online that not many people know.
Jim Cook:
I’m a really good billiards player. Other people know it as pool. I grew up in Ohio. I’m I, I’ll, I’ll promise only 30 seconds, seven years in winter times. And I won a bunch of championships at school and outside of school. And I just happened to be really good at billiards.
Paul Barnhurst:
All right. There we go. I had no idea. So that, that’s a good one. If you could meet one person in the world, dead or alive, who would you meet and why?
Jim Cook:
Oh, boy. I would definitely go back. I’m a big history buff. I would go back in history and I would, I would probably wanna meet someone like Nicola Tesla or some technologist just to follow them around. All right. It would definitely be, it would definitely be an inventor. Cool. Maybe I’d go all the way back to Leonardo da Vinci. He invented a bunch of things, but an inventor, and I’d wanna follow ’em around forever.
Paul Barnhurst:
That, that would be fun to follow around and see how they think and what they came up with. Right. I like that one. Right. So this next question is, what is the last thing? Either you Googled, looked up on YouTube or used generative AI chatGPT Bard, whatever, to understand something about, you know, finance FP&A Excel.
Jim Cook:
Well, i, I, you just, you, you stole the thunder, right? So I, I just did this the other day. I, I’m, I’m trying to figure out how to use copilot and, you know, gen AI with Excel and how to actually generate Excel without using Excel, using copilot and ai and just talking to the computer. It’s fascinating to me.
Paul Barnhurst:
It, yeah, it’s, it’s amazing.
Jim Cook:
It is
Paul Barnhurst:
So copilot. I like it. So what’s your favorite Excel function or feature? Is it copilot
Jim Cook:
It is now, but before it’s, it used to be, oh man, I used to be, so this is really old school, right? When pivot tables were a thing and no one knew how to use ’em. Now it’s like second nature, but it used to be pivot tables. But this, but as they’ve morphed it into scraping data off the internet and all of the ability to scrape data HTML into tables and codes and how to actually automate that is just amazing.
Paul Barnhurst:
Cool. I like it. Alright, so next question here. We talked a briefly about this, right? You and I met at the OG Summit. So could you maybe talk a little bit of why you’re such a big supporter of the Operators Guild? Maybe how that’s helped you in your career?
Jim Cook:
Well, one reason is, and we’ve touched on this, I’m at the stage of my career where I’m really passionate about giving back. I consider myself extremely lucky. I guess luck is a matter of being at the right place at the right time and working hard. Mm-Hmm. <affirmative>. And I recognize that I l I’ve has exposed to so much at Intuit, Netflix, and Mozilla. And I really have a brain and a passion, and I love teaching to give back and share who are with whoever will listen best ofs. And that’s what the Operators Guild is all about. I see a lot of people who I recognize as me, both men and women operators who are 30 years, 20, 30 years, my younger and I see myself and I see them in me, and I’m like, okay, if I could teach them, if I can just plant a couple seeds of wisdom so they don’t have to take 10 years to learn what I took me 10 years to learn, maybe I can help them with learning it in one year. That’d be tremendously satisfactory to me.
Paul Barnhurst:
That’s a wonderful thing when you have someone, a mentor that can help you learn a lesson that, you know, took you forever to learn. I mean, I have my share where I’m like, man, if they can learn not to go through this pain, they’ll be a lot better off than I was. Okay. I mean, there’s some things you have to learn the hard way, but there’s so many you don’t. You can learn from others and avoid that pain. So I, I love that. And I agree with you. I mean, I’m getting the opportunity to give back more, and it’s a lot of fun to
Jim Cook:
See that. Absolutely.
Paul Barnhurst:
You’ve joined a number of early stage startups, obviously, as we’ve talked about it. What do you love about that stage? What’s, what do you find so enjoyable?
Jim Cook:
The building. I, I think it’s, it’s, it’s the creativity and the autonomy of, you have this general vision, but not a precise vision, both at the company level and at the functional level that your subject matter expertise is. And you have the ability, unlike larger companies, to bring the best systems of the day in and without, without a lot of risk. And so you’re constantly dealing what’s the best system to install in finance or operations or it, whereas all these other systems already exist at these other companies. So you’re always on the cutting edge. You’re always creative and you’re working toward a vision of, of, and you’re a builder and you’re always asking why and, and what and how, and, and trying to actually produce a product. When you start with zero or, or not a lot, you’re actually producing a product that hopefully will live on for years to come.
And, and you’re building it. You’re building, like when I built, when I installed Oracle at Intuit, we were on Borland Paradox or Quatro Pro database, and we were on Quicken <laugh>, honestly <laugh>. And we needed an actual e r P, you know, I’m the one that had to go get the vendor install it, you know, structure it, configure it, you know, it it lived, it lived on for a while. It may still live on today, I’d ha I have to check. But you’re kind of known for the systems and how you meet the customer with your system and how you actually get things done faster and more efficiently. I love that part of it.
Paul Barnhurst:
I can tell you, you love the building and the figuring things out and putting, putting things in place that can last versus just coming in and following a process, so to
Jim Cook:
Yeah. It’s a dance. Right. and so this is, this is what I’m doing with my current practice is, is sure there’s best practices and there’s frameworks and there’s models, but everything has to be customized and created custom for that company. And, and that is fun because you’re actually taking a foundational element of best of, and you’re creating something new from it that is probably better for that company.
Paul Barnhurst:
Yeah, I could see that’s a lot of fun. I you know, when I started my career, I always wanted to work in startups. And so of course, first place I went to work was the government in defense. ’cause I couldn’t find a job. And I’m like, this is definitely not entrepreneurial here, you know, in the traditional sense. And from there, I, every time I graduated, I graduated in a bad recession, you know, 2008, 2001, September 11, you know, those type of things. And so I always ended up getting a job at a big company. And, you know, it’s kind of funny now running my own business. Because now I’m getting to work with small companies all the time. And I’ve really enjoyed that. It’s always felt where it’d be a better fit for me. And it just took a little longer than I planned to get there. So I can, I can relate to that. So, next question here for you, this is one I saw on your profile. You know, when you were at Netflix, you were involved in the creation of the famous red envelope. I definitely remember those back in the day. So tell us about that.
Jim Cook:
Well, first of all, it wasn’t red at the beginning. And second of all, we were making it up from scratch. And we used to have two envelope. I could probably go on for a couple hours on this, but I’m gonna point people I’m gonna point people to a couple books Netflixed by Gina Keating, That Will Never Work by our CEO and co-founder Mark Randolph. And then the documentary Netflix versus the World. But I’ll, I’ll, you know, I’ll go, I’ll give you a minute or two here. Sure. you know, the envelope was a creation, well, the envelope is just the product that had to get through the US Postal system. So the, the actual design of the envelope, which took us 150 versions to figure out how to, even though once I figured out, went into the US Post Office and there were, and these are giant, 200,000 square foot and more a general mail facilities.
Because they run in a SP hub and spoke. The post office you go into is not the post office that, that runs all the mail. It’s a, it’s an Amazon warehouse with massive machines. A 40,000 letter envelope per minute drum sorter with these gigantic wheels spinning at massive RPMs to its whole job is to separate two envelopes that might be sticking together. Well, you can imagine if your disc went through that machine, it would be dead. And yet, if you don’t design your envelope in a exact perfect way, based on their specifications, everything was specked out in the government. This is a government based entity with, with big controls. Everything got dumped in. And I learned, I I, I ended up knowing so much about the post office that everything gets dumped into a gigantic conveyor belt on the end of the loading dock from these big semi-trucks.
Everything from a package to, to a to a small envelope, everything. And then a bunch of conveyor belts sort this mail into 15 different machines. You know, and based on the specifications of the, of the size of the envelope, you don’t build your envelope. Right. It gets into that 40,000 drum roller. It’s gone. Right. And so you had to build it, and then you had to build it backwards. And then you had to, you know, 150 versions later because we had to print the outside of the envelope a certain way. I had to print the inside of the envelope a certain way. Yep. we used to ship two envelopes and then we figured out, I, I was opening my mailbox one day and I everybody for the, for those real old timers might remember AOL. And we used to all get these CDs in the DVDs in the mail for free
Paul Barnhurst:
Internet. I had a lot of those in college. A lot. And
Jim Cook:
We would use them as coasters, right? Yeah. And nobody would open
Paul Barnhurst:
Them. We used them also to map all the cords in the back. They’d write which cord went where. And we had all in
Jim Cook:
Ours and free internet, 60 hours of service.
Paul Barnhurst:
Probably had like 20 CDs back there that we use to co color coordinate everything. So, yeah.
Jim Cook:
So instead of throwing it out one day, ’cause we would be throwing dozens of these out every week, it, something caught my eye and I opened it. This is when we were shipping two different envelopes. One, one to go out and one to come back. And as I opened it, I realized it was a new design with the perforation on it. And they had printing on the inside and outside. And it was just this aha moment I needed to look to, this was the answer. How to create a perforated envelope where you can, now we all know how this works ’cause we were making it up as we went. You tear off the front and it’s pre-printed anyway for those, remember the envelope experience. So that, that’s the story of, of envelopes.
Paul Barnhurst:
Great. And I, I kind of have to laugh as you’re talking about that. I obviously didn’t go to the post office a lot, but I suppo supported a direct mail business is one of the businesses. When I worked at a company, we sent out, you know, 50 million pieces of mail a month. So I learned a lot about forecasting all the different rates and co-mingling. And this is a postcard, this is this size, this is that, and it costs this. And is it expediated? And I don’t, you know, people don’t have a clue how many different rates there, there are back in there. And when you get into bulk mail, bulk mail, I mean bulk mail. I know you could appreciate that. ’cause You’re doing bulk mail. It’s a whole different animal
Jim Cook:
Bulk business reply envelope and deisha. It’s, it’s one ounce versus two ounce rates if the weight matters, right? Mm-Hmm. <affirmative> and designing the envelope to get under one ounce was critical. It was back then 32 cents out, you know, ounce ounces to for first class mail. But we were the only company e-commerce company in 1997. And, and, and probably still today, they just shut down the DVD business. But until last year, yeah. Mm-Hmm. <affirmative> in which a hundred percent of your product went out, was returned back in the day of e-commerce. And still, if 2% or 3% of your product is returned, you lose a ton of margin. You might be out of business. We, good point. This was a business that had to ship out a hundred percent of their product and try to get a hundred percent back. Never been done before.
Paul Barnhurst:
That’s a really great point. So Kenny, you know, fast forwarding now to 2023, when you left Netflix in 1999, did you expect it to become what it is today? Are you surprised with how big it is and what it’s doing?
Jim Cook:
Well, not only did I not expect it to be as big as it was, but the principles and Reid himself, who is still there, did not expect it to be this big. No matter what they tell you. And this is well covered in, in the books, in the documentary, like have to, for those that have seen the books or, or, or, or the movie. It’s very well laid out and it’s all over the internet that Netflix tried to sell itself to Blockbuster, not once, not twice, but three times for $50 million. And Blockbuster laughed at them in the face and said, you guys aren’t worth it. All the way up until 2002, 2001, prior to them going public in 2002. And in fact, not a lot of VCs would give Netflix any money until in, in the very last round before the IPO.
Very few people know this was a subordinated debt round because no VC would give the company any money in 2002. That was a bad time. But thank God TCV you know, technology crossover ventures stepped in, saw something in the assets of the DVDs, saw the cash cashflow potential, saw the subscription potential. But without TCV stepping in, you wouldn’t have a Netflix today. ’cause Because no other VC wanted to wanted, you know, so that everyone did. Nobody thought it was gonna, I was told everyone, we were, all the originals were told we were crazy to even start this company. This is the deal we’ve ever seen. So it’s a great lesson for startups because don’t let the naysayers get you down. Is is an article I wrote probably 2007, five lessons I learned from Netflix. You can probably still find it on the Internet’s super old. But it, it don’t let the naysayers get you down out there in start a plan if, if you know your customer, if you’re super close to your customer, if you build something that they want, they will come and they will stay. The closer you are to your customer, the better. It’s
Paul Barnhurst:
Great lesson there. And I love that story. And it reminds me a little bit, and I’m not sure many people know this, but the early days PayPal approached American Express and they offered the company for a million dollars. American Express said, no thanks. What would’ve been the perfect fit with American Express today? Paypal? ’cause they, the digital area, they’ve kind of, they’ve, they’ve lagged in compared to some of their competitors. And it’s just that lesson that, you know, little passes or little, little changes and how they can be so much bigger than we think. You just never know.
Jim Cook:
You should do a whole podcast on, on that because the origin stories face many people don’t realize face. They forget maybe that Mark Zuckerberg was faced with the billion dollar question in 2009 or 10, I believe. ’cause Yahoo offered to buy them for a billion dollars. And he went around to all his advisors and, and everyone that he knew in the valley said, should I sell, should I sell? Because they weren’t worth, and he were close to a billion dollars. This would’ve been a huge payout. They were maybe worth a hundred million, $50 million back then. But Yahoo just wanted to own it. And Mark said, Nope, I think I think I’m gonna, I’m gonna take the shot and I think I can build it long-term. Much, much much more valuable than a billion dollars. It was a big risk. He was told by so many in his take the money and run. But now it’s a, you know, I
Paul Barnhurst:
I would have, I’ll admit it, I would’ve taken the money and ran.
Jim Cook:
Yeah. Yeah.
Paul Barnhurst:
Well, great. I lo love those stories there. But we’re gonna kind of switch gears a little bit here to a subject I know you’re also passionate about beyond building and really get into some of the FP&A and, you know, one of the areas I know you have a passion for, and that’s talked a lot about today that in the past wasn’t talked about as much is business partnering, right? And I know you believe it is an area in finance has room to really improve on. So the two part question here for you, the first is, what does business partnering mean for you? How do you define it?
Jim Cook:
I I love this question because it took me a while to really explain to people and I finally condensed it, which really resonates with people this way. And for my finance team, for my accounting team, for my operational teams that, that have reported into me two ways. You are the CEO of your product. I tell everyone who works with me and for me, no matter what function they’re in, and I want this to expand across the whole company. Everyone has a product. Everyone has a customer. And when you start thinking about you’re the entrepreneur of your product, you’re the CEO, the owner of your product, an example would be an accounts payable person plugging stuff into accounts payable. Their product is the data that goes into the chart of accounts that the controller takes and that the accountants, the senior accountants take and make sure that it’s GAAP ready and that it was coded to the right account. It’s like your pro your product is how good your data is and you’re not making mistakes. And your customer is, is your accounting department. And eventually your customer is the C F O and the board. Because you’ve only wanna put it in once, but everyone has a product and everyone has a customer. And when you can change this realization for people, what is your product? Who is your customer? How do you make your product better, faster more convenient?
Paul Barnhurst:
So who, so who is fp a’s product?
Jim Cook:
Fp a’s product? I think, and, and it doesn’t have to be it have to, so, so this is a great question. It doesn’t have to be a tangible thing. I believe FP&A’s products are the insights derived from the data and the decision making recommendations that, that someone who sits at the intersection of data is immersing themselves with, and the people that they’re delivering their reports to aren’t living in the data every day. Your job is not the spreadsheet. Your product is not the spreadsheet. Your product are the three or four key insights of that report and maybe some recommendations, how to course correct and developing that relationship to figure out how to grow the company. The company in this case is maybe the engineering department, the company in this case that, ’cause you’re partnering with the CEO of engineering at this point, or the c e o of marketing if you’re an fp and a person for marketing.
So if you think of yourself in fp and a as the CFO, the mini CFO of the CEO of marketing and you’re on that team, it just changes the whole thought model about an FP&A person. And it really expands people’s thinking about let’s get better software that’s more efficient, let’s use chat. Like, how can I deliver my information faster more timely with more insights, with more colors, with more graphs. You start thinking this way. You’re not just delivering a report and going home and having a beer.
Paul Barnhurst:
Yeah. I, I love the way you said that and I’ll explain why. You know, kinda my thinking is, you know, when I first thought product, I think, all right, well we deliver the budget, right? We deliver the reports. And you, you start thinking maybe insights, but you start thinking of the tangible things. And I love what you said there, it’s the insights and the recommendations. Even if you don’t deliver the report that month, which, you know, in some cases that could be a real problem, but if you deliver insights that drives value and you’re giving the recommendations, you’re being a good partner. Because you’re creating value for the business, it may never look at that report. So it’s really those insights. I think that’s what people miss so often. And you, a good example is take variance commentary. So often all we do is write out what happened, right?
I can figure out what happened by looking at the P&L for the most part on my own. Yes, you’re telling me, well this, this line or that, but that doesn’t, most business owners, the partners, the head of marketing or whatever, just gonna look at that and go, okay, what does that mean? And so I’ve loved the framework of, okay, tell ’em what happened, you know, then give ’em the so what or give ’em the, you know, now the so what and the now what, right? So what does that mean for me? I’m gonna, I’m gonna add one for you. And then now what should I do?
Jim Cook:
I’m gonna add one for you, Paul, why it happened. Yes. If you can challenge yourself about why it happened, or at least have a hypothesis about why the data was a surprise, now you’re being curious about the numbers. And then you can expand onto, well, what if, what if, and this is scenario analysis. What if we change this key metric? What if we can improve this key metric? What if we invested in this other activity to improve this metric? Mm-Hmm. <affirmative>, now you’re acting like a CFO. Now you’re not just an FP&A person.
Paul Barnhurst:
I love the why. That’s a great, and I’ve had some of those conversations like, well, why do you think that is? And some of the best conversations I’ve had with the business have been when we’re discussing that, why, because you often get insights and revelations you wouldn’t get otherwise. Like we were asking why are some of our salespeople struggling so much? And I’d done a ton of analysis. And what we found is pretty much every salesperson that was performing really well had soft leads to sell into. We had a big program where the leads were coming to them. We had others that were mostly selling into ones where we had some kind of relationship with, you know, the big dealer groups or, or things that gave them an in and they weren’t just, you know, field sales trying to do cold calls. And so it was a good moment where we’re like, okay, that explains some of the why. Now how do we fix that? How do we help ensure everybody has some of that and improve the numbers? And it was just a really good, you know, eye-opening moment with the business. I still remember having the conversations with some of the strategic leaders at the time when we, you know, brought that to their attention.
Jim Cook:
I’m gonna, I’m gonna, I’m gonna also suggest that’s very easy for us to say at our, our stage of our career. But I remember being the FP&A not to do a pun, a guy, but the person, the FP&A person who who didn’t. So, so all of that is required that we just spoke about. But having the courage to show up that way is the huge blocker for most young FP&A people. Oh, I couldn’t communicate that that way. I couldn’t, I I even if I knew why, I’m not sure I’d be comfortable making the recommendation. Mm-Hmm. <affirmative> finding the courage and finding the courage to be connected on a personal and a relationship level with people that are much more experienced than you. ’cause FP&A people are generally younger.
Paul Barnhurst:
Yep.
Jim Cook:
That’s the trick. And that’s the hard work. Some of the best FP&A a people, the best insights, if they don’t communicate it, the why and they’re not courageous enough to communicate the why will hold you back. So I’m just gonna, and
Paul Barnhurst:
Talk to all
Jim Cook:
Your audience to definitely, I struggled with that. De find the courage. Find the courage and just try it.
Paul Barnhurst:
I, I love that. ’cause It’s so true. I can remember early in my career where like, you’re in a meeting and you hear something, I could tell you what the problem is, but you’re, you’re not willing to speak up. You’re like, but now I don’t have the courage to tell you what the problem is. I’ll just let you keep droning on.
Jim Cook:
But you’re comfortable saying, I, I knew it and I told you so, and you have this little passive aggressive, but I’ve been there. These people are idiots. You say these people are idiots, but, you know, but it’s your, but you have to take ownership of the fact that you’re not speaking up and you’re part of the problem by not sharing your point of view. One of my big mantras, you you, I don’t know if you’re gonna ask this question, but you have to lead with a point of view in any position you’re in. And you have to communicate your point of view. You can’t just be doing a job. You have to have a, you have to have a point of view.
Paul Barnhurst:
I still remember the advice, and this was probably less than 10 years ago now, I’d switched companies and the VP looked at me, goes, if you want to people to start respecting you and feel like you have that seat at the table, give it your opinion. You know, make sure you’re giving a point of view. People will listen because you’re willing to speak up. You know, he is also, you wanna make sure you know what you’re talking about. Don’t just talk to be talking, because they’ll notice what you’re saying. And if you’ve, if you’re well thought, thought of and you have good ideas in what you’re saying, you’ll be adding value and they’ll notice it and they’ll appreciate it and we’ll make a difference in your career. And I could really see that after he had mentioned that, how true it was.
Jim Cook:
Again, now back into the, how people behave in their personal psychologies. And even back to Myers-Briggs, there are many people in finance and accounting that are more introverted than extroverted. I would say the percentage who are more introverted and extrovert, it’s probably more introverted. It’s super hard for a more introverted, analytical, left brainin person to be comfortable with communicating. So this is the struggle, like working on that, not on the spreadsheet is what I would encourage most people to do.
Paul Barnhurst:
I, I agree with you. Learning to communicate is critical for finance FP&A I mean, frankly, it’s critical in life. It’s a good skill for everybody to have. But if you wanna influence and have that seat at the table, you have to be able to communicate. You could be brilliant in the spreadsheet. Brilliant. In your analysis. I’ve told the story a number of times, and the one that sticks out to the most is I pro did a presentation to the C F O on something and it went terrible. And we got all done. And I had asked my C F O, the regional C F O went, well, what went wrong? And his comment to me really struck out, he goes, your analysis was brilliant. Your presentation lacked. And I was like, yep, I forgot about the last mile. I focused so much on the analysis and getting everybody else aligned and buttoned up that I thought it would just be a shoo-in with the C F O. And he hadn’t heard about it for six months and was lost. And so he thought it was a terrible idea. And it really, that was a definite defining moment for me to remember the importance of communicating. It really hit home for
Jim Cook:
Me. And, and I, I, this is a lot of my practice on how to communicate because many people in whatever subject matter they are, think that everyone else thinks like they do.
And FP&A people think at the very detailed level, line item level, it took me 10 years into my career not to show up with the insight and kind of build it after 10 minutes and explain to people. And this line, I’m, I built this row, I built this column and this connects to this. And no one caress. They, they kept saying to me, and I wasn’t listening, I just want to know what the answer is. And I’m like, well, no, you don’t because you gotta know how I got to the answer, otherwise you’re gonna question it. And so and so I didn’t meet them where they were, they trusted my analysis. But you need to start with the answer and then tell them why not build up to the answer and 10 minutes later have them be lost. And the analysis was brilliant, but the communication lost them when they turned off their phones.
Paul Barnhurst:
I I think I’m having flashbacks to my career ’cause I dealt with the same thing. It took me a long time to learn. They want the big picture. Don’t get into every little detail with them as if they trust you. And the answer makes sense. Give them, give them upfront what you think. And if they wanna go into the details, then do it. But don’t start with the details. And I was very guilty of that. You’re, I was laughing. You were telling
Jim Cook:
That you’re, you’re peeling the onion, you’re peeling the onion layer by layer to get down to the core. You don’t, you know, you don’t start with the core and try to wrap an onion around it, which is what we most do.
Paul Barnhurst:
I, I agree. So, you know, next question here for you, as you and I were chatting the other week, kind of in preparation for the interview, you you talked quite a bit about, you know, developing good relationships. And you mentioned that part of that is building the relationship upfront, developing it from the very beginning. Can you maybe talk a little bit about what you mean by that and share an example of how you did that in your career?
Jim Cook:
Sure. and I, and I coach this a lot today and ’cause people skip this step, I would highly recommend what I learned to do is start, and I, and I learned this from my own mentors, start with just a, a listening tour. Start with being very curious and asking your, whoever you’re gonna be working with, at whatever level you’re working with them. How’s it going for you between you and finance department today? What’s going well? What’s not going well? A series of questions. Do you have the data you need to make the decisions? Oh, you don’t. Well like, well I have it here, but not there. What metrics do you use? Well, I don’t have any metrics, like a series develop a series of standard questions that will be helpful for you to partner with that person. But just go in without any judgment and, and do this to as many leaders around the company as possible to get a pulse of how the finance team is showing up or how the FP&A role is showing up, what’s useful, what’s not.
You know, you’ll get answers like, oh, the reports are too detailed. I really can’t make sense of them. Or, or they don’t come out in time. I can’t make my decisions fast enough. But this is the signal. What you’re looking for is where is the tension in the partnership between finance and that and that org? How can you better serve them? How can you go faster with more clarity? And this takes, you know, developing a relationship means starting with a conversation, not starting with a spreadsheet. You do not start with a spreadsheet. You start with a conversation of the business, how they think about the business. ’cause You’re gonna learn something as well. If you’re really good at this and you can practice this many times as fp and a person, guess what happens when you ask a lot of questions and you develop, I just wanna take you out for coffee or lunch. Do you mind, you’re gonna learn about how they think about engineering or how they think about marketing or how what they’re, you’re gonna be start becoming an expert because you’re just listening to them talk about their expertise. Every once in a while you interject, well, how can finance help you make that decision better? And so start with a conversation. Mm-Hmm. <affirmative>, don’t start with a spreadsheet. And then we’re really good at pattern matching as analysts. Pattern match the problems and then design a better product to fix the problems.
Paul Barnhurst:
Thank you for adding that last part. The follow through is, is critical. Sometimes we get everything else done and don’t follow through and it falls apart. That’s a huge one. I really like what you said there of, start with the listening tour. I’m gonna steal that idea. I really like the way you you phrased that there. And then the second one is, don’t start the com. Don’t start with a spreadsheet. Start with a conversation. And that really leads into the next question, I think perfectly here, right? We’ve heard a lot lately that a big part of being good at fp and a is telling the story, right? Data, storytelling. I mean, I have a bunch of books back there around data and telling the story and things like that. So how does that play a role in fp a being a good business partner? Why is that, you know, so critical to be able to be a good storyteller? Isn’t it enough to just be a good analyst?
Jim Cook:
No <laugh>, so the short answer is no. You have to be a storyteller. There are many ways to describe what being a storyteller really means. And I’ll take a couple different angles and cracks at it. But ultimately, a storyteller is answering the question why. That’s one angle. It’s why is this happening? And what’s going to happen if this continues to happen? It’s painting a storytelling. If you, you know, we are human beings. We’ve sit, we’ve sat around the campfire and we’ve told stories for years that, that that convey data and information in a visual, in a verbal format. It’s how our brains are wired from a DNA perspective. We hear about you know, the hunters almost getting killed by the tigers, but we weren’t there. But we, but we feel like we’re there in the story because it was so visually told with pictures that they get put in our mind and words that put in our mind that we actually feel it with a connection.
So storytelling is the fastest way to connect to your audience, your, your customer’s brain, because you do it through words and a visual and imagining, imagining the future, in our case, imagining the future and working backwards. So you have to be as good storyteller because what is FP&A, it’s planning the future. It’s analyzing the, the present and planning the future. It’s not accounting, which is just mostly the present. And there’s nothing wrong with that either. It’s being accurate and timely and consistent. But FP&A in particular starts at the future and tries to predict the future and tries to take the current situation and say, what should we do more of? And what should we do less of? And if we did more of that, maybe we can end up in a better future for ourselves as a product, as a team, as a company.
And as you’re telling this story, the classic storytelling elements are, if you think about any book or any movie, there’s someone doing the activity. There’s the protagonist, there’s the antagonist, there’s the competitor, right? There’s there’s the drama and the conflict. If we get it wrong, that’s risk. There’s the Cinderella moment when we get it right and there’s joy, right? But we’re all, it’s talking about emotions and figuring out with the data that we have in hand, are we gonna be happy or sad if we end up in this future? And once you can shift your brain to storytelling, the data, storytelling the data, what story is the data telling you? And the data is just the plot, but what story is it telling you? And make it more visual. Make it more verbal. You know, make it more punchy. You know, don’t make a five hour movie, make a 90 minute movie. <Laugh>. No one wants to a five hour movie. It’s the same movie. Make it more actionable. Don’t,
Paul Barnhurst:
Don’t make it a long documentary. You wanna get to the point but may Yeah. Put that story to it. And it’s a great point of helping it come to life. And there should, you know, the emotional attachment that you tell with stories, like, right. I think everybody who listens to this, I know when I listen to it, as you were describing Netflix and the different conveyor belts, I’m picturing in my mind and I can see this drum like, well, the CD’s gonna be destroyed and Right. I could relate to all that as you’re going. And so there’s something to be said of just having that story. One of my favorite books I really like on the business side about stories is Kindra Hall wrote a book called Stories That Stick. And she talks about almost no company that sells well. In fact, pretty, I’d argue. They’re, they’re not out there. They don’t sit there and tell you about all the technology. They tell you a story and make you feel how the technology is gonna make your life better. So even with data and the insights and the recommendations, you’re trying to help them see how it will solve a pain, how it’ll make the company better, how continue to do something that’s gone well, whatever it might be. Right. That’s really the, the goal there with those stories.
Jim Cook:
Absolutely.
Paul Barnhurst:
So you just have a couple more questions here. We’re just about done. One i one we like to ask guests is, can you tell me about a time in your career when you experience what we’ll call a strategic moment, you know, an in a strategic insight that later empowered you to drive change within the organization?
Jim Cook:
There are several, several successes and several failures. I don’t know which one, where, where I wanna start of not actually not doing something, but a strategic inflection point, A strategic moment as you say it is. I, I, you have to actually break down what the word strategy actually is. And strategy is a choice. Strategy is choosing this over that. It’s going in this direction, not that direction. Many people confuse strategy with theoretical. We could do this. No strategy is a choice. We’re going this direction, follow me, you know, I’m the leader, or we’re the leader and we’re going to the North Pole, not the South Pole. And we’re gonna, you know, and, and our goal to get there is to do something, but it means saying no to everything else. So many strategic inflection points over the life of my career, and I’ll just hit on a couple early days, all the way to present day.
I clearly remember the moment at Intuit when we were, we were the number one personal finance software leader with Quicken. We were killing the market. We just made a product that was faster and easier to use, and it was just so much better. A check looked like a check on the screen. <Laugh>, a red checkbook register, looked like a checkbook register on the screen. We were the number 40th product to market, and we were the only product that presented the checkbook as it is in real life. Imagine that, by the way, no VCs funded Intuit until it was profitable, either because they said, I’ve seen 40 other companies and we’re not gonna fund you. So this is a, this is another pattern. But once we, once we went public, we were selling about 2 million units a year of software. Immediately it was like, oh, there’s a market here.
Microsoft was trying to compete with manage your money. Most of your guests don’t remember this. You don’t need to comp, comp not CompuServe, but computer Associates had their own product. Everyone had a product, but because they had money and we didn’t, we were trying to go public to have cash to grow the business. They had hundreds of millions of dollars. They decided we’re gonna give away a million units of Microsoft money for free to the first million customers. We had just sold 2 million units. It was early days of software. Computer associates within a week turned around and said, we’ll give away our million units for free. We’re trying to sell our units for, you know, $49. 99, $69.99 to, to fund our business. There was a panic moment.
Paul Barnhurst:
Oh, I
Jim Cook:
Bet. Like, we’re gonna be outta business. Turns out our strategy was to double down and to have a marketing campaign, which was more like, okay, go ahead, try the rest. You’ll come back to the best. Right? Try the rest. We’re the best. Like, we’re, we’re okay. We’re better. And we leaned into it. And sure enough, what it backfired on them, because now you had 2 million people who had never tried personal finance before. They sat around a dinner table with friends and said, have you tried this computer associates this Microsoft product? And they’re like, yeah, yeah, yeah, you need to use Quicken. All of a sudden our sales doubled and tripled overnight
Paul Barnhurst:
<Laugh>.
Jim Cook:
So you can turn fear into opportunity. How to turn fear into opportunity. Same thing happened at Mozilla when Google came out with the Chrome browser. After four years of us having Firefox to ourselves recreating the browser market, we had 30% market share. And Chrome came out and said, oh, there’s a market here. We’re gonna build our own browsers off your open source technology. And the the initial fear was, we’re dead. Eventually, you know, they did win with their big dollars, but we held our own for the longest time because I, I remember standing up in front of Mozilla and telling everybody I’ve seen this movie before. Everyone’s gonna try. We just have to be better than Chrome. Our goal is to be better than Chrome. Now what we failed to do, that’s, that’s the, and so we, it was a rallying cry. We turned fear into, into doubling down. Mm-Hmm. <affirmative>. But what we failed to do at Mozilla was lean into mobile as fast as we should have. What we failed to do at Mozilla is build services in the cloud where we should have, we just, we stayed with being a desktop browser and that was the strategic error.
Paul Barnhurst:
Sure. No, thank you for sharing that. I appreciate you sharing both an error and where things went well, because we should learn, as I like to say, you know, failure is just a learning experience, right? Failure leads to success. I heard someone say is, if you look at it as a learning experience, we should all, not fear failure, sometimes it’s painful, but we should strive to learn from it. So I appreciate you sharing both sides of that.
Jim Cook:
Can I double down on that for two minutes? Go ahead for a minute or two. Sure.
Paul Barnhurst:
We’ll give, we’ll give you a minute here. Go for,
Jim Cook:
I think you should design for that as an FP&A person.
Paul Barnhurst:
Okay.
Jim Cook:
You should make recommendations that aren’t a hundred percent for sure. You should actually design for 85 per I say 85, 15, 85% success, and take the 15% of what’s not working with your recommendation as FP&A person and course correct strategy. Choose a different path on the, you know, we thought this was the right way to, but, but designed for failure because then you’re designing for learning as long as you’re still 85% correct, you’re going to be great, but do not try to be a hundred percent and then turn that 85% to 90%. Learn from the 10% error rate, make it a 5% error rate and strive to be five nine. So you’ll never get there. But design for failure and design for course correcting and it just opens up a realm of opportunities and a realm of creativity. And you get away from this trying to be perfect.
Paul Barnhurst:
I, I like that. That’s a great point of designing for failure. And I know there’s a lot of organizations that have started doing that in different ways and celebrating it, recognizing how important it is. Well, thank you so much for being here with us today, Jim. We just have two, two more questions for you and we’ll be done. The first is, if you could offer one piece of advice to someone starting a career today in fp and a, what would be that one piece of advice?
Jim Cook:
I was thinking a lot about this with a different subject, with a different person. Connection is the new currency. Being connected to people through what you do. You happen to be an fp and a person, and we talked about this a lot in this podcast, but being connected to your customer and being as close to your customer as possible is the holy grail of any product. Whether you’re an FP&A person or not. Learn to establish relationships with your customer, with the people that you work with. Relationships and connections come first. You can be the smartest person in the room, but if nobody trusts you is connected to you. It doesn’t matter. And connection is, is is your currency as as someone starting out in career today. It’s not what you do, it’s how you do it and how you partner with people.
Paul Barnhurst:
Great advice. Thank you for that. So last question. If someone wants to get ahold of you, what would be the best way to do that?
Jim Cook:
Linkedin. Hit me up on LinkedIn. Hit me up at jimCook@benchboard.com. Or just @Cookflicks. You see the play on words there on Twitter? Yeah, that’s my, I like it. Cook flicks. Yeah, there you go. Yeah, I mean, you’ll find me
Paul Barnhurst:
Linkedin. Sounds good. And we’ll put that all
Jim Cook:
In the, I’ll answer you too. I mean, hit me up on LinkedIn messaging. Perfect.
Paul Barnhurst:
And I’ll put all that in the show notes along with, I’ll make sure I get the name of those books and the documentary from you and anything else you wanna share, we can stick in the show notes. So thank you so much for joining us and sharing some of your experiences. I know I learned a few things and I’m sure our audience did. So thanks again, Jim.
Jim Cook:
Paul. My pleasure. Thanks for having me. Appreciate it.