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And now, on to the show. From Data Rails, this is FPNA Today.
Welcome to FPNA Today. I'm your host, Glenn Hopper, and today we're joined by Daniel Pack, the founder and CEO of CuraWork.
Daniel has over 20 years of experience in corporate finance, including his time as CFO at Invent Corporation and as Director of Finance at CCI.
With a strong background in establishing international offices, leading ERP implementations, and shaping corporate financial strategies, Daniel is a visionary leader in the back office operations space.
Today, we'll dive into some of the most pressing challenges back office teams face and the role of management and why eliminating micromanagement might be more complex than it seems.
Let's get started. Daniel, welcome to the show.
Thanks for having me, Glenn.
I've got a list of questions, but as I was going through the intro, leading ERP implementations.
I just want to touch on that for a minute, because I don't know how many of these I've done in my career, and you know on the other side of them how great they are, but is there anything more painful that you've done in your career than leading an ERP implementation?
Yes, ERP implementation globally.
Multiple subsidiaries, multiple countries.
It's probably one of the hardest things to do and the most time consuming.
I'll tell you the first time I've ever done one, I was thrown into the lines then.
We were small, probably about 100 people.
We probably shouldn't have done what we did, but it was right after the 2008 subprime mortgage bust, I guess.
And so we were looking to implement an ERP finance accounting sales forecasting system in a very 100-person team.
We were global. We're in 38 countries, few here, a few in Poland, a few in South America, et cetera.
And they put it on me. They said, hey, you're our finance, head of finance, so you need to do this.
So as I've never done this before, we'll figure it out.
So I figured it out. I literally spoke to 60 vendors for six months.
The first time doing it, I just go too much on diligence.
That was one of the feedback that I received after doing this, but it was a lot for my learning.
But the thing was because 2008, and it was around on 2010 when we purchased it, everybody was giving deals.
And so I went from tier 3s to tier 2s to tier 1s, and I ended up with the Oracle's SAP Microsoft Dynamics AB, and things that were just way above what we needed.
But they were giving such amazing deals that we decided to go with Oracle, EBS, E-Business Suite, R11.
I don't know if people know about that, but that is usually done with teams of people, implementations.
For the first year, I was the only one doing it.
And I literally went by CEO and I said, hey, Glenn, I'm working 14 to 16 hours a day, seven days a week.
I need help. And he's like, what's going on?
So I explained to him. He's like, and he wouldn't, they wouldn't give me help because they couldn't understand it because they'd never done it themselves.
And I literally said, I'm quitting today if I don't get help.
And he goes, oh, hold on, hold on, hold on, hold on, let's get you help.
So the implementation of that first ERP system, it was slated to take six, eight months.
It took two years. Every ERP implementation is like that, the salesperson will tell you six to eight months, and then it always takes two years.
I got one done, it was a NetSuite implementation.
I got it done in a year and a half, and I was telling somebody about it.
And they were like, I don't believe that.
You didn't get it done. We learned from Oracle EBS, we used it for seven years, and we switched to NetSuite.
We could get that one done in six months.
Because my team was now so used to this Oracle EBS monster of just how difficult it is to actually, first of all, implement it, but second of all, keep it running properly and fix all the issues as we go.
NetSuite was much easier than Oracle EBS.
So our team still worked six months.
I remember eating dinner literally Monday through Friday with them until 9pm.
We were there working with my team to implement or NetSuite across the globe.
Still difficult, still a long time.
But I think if after you do one or two, it does get a little easier because you know what to look for and you know what the requirements really, how important requirements are in the beginning to really understand the current state and what the future state should look like.
And really, all, really what implementation really is for ERP is testing.
80%, 90% is testing. Yes, there is the buy-in thing that you need and all these other things, but the bulk of it is testing.
And I explained to a lot of people actually because a lot of my clients are implementing NetSuite for one reason or another recently.
I keep telling them the most important part is the beginning.
Is to understand your current state and what you actually need in the future state.
And all you're really doing is not something new.
You're taking what you're already doing and understanding how to do it in the news system.
Oh, I know. And honestly, while we're talking, I'm thinking that's a whole different episode.
Daniel and Glenn break down do's and don'ts of ERP implementations because it's always painful, but it's beautiful when you get to the other side.
But man, it is a slog. For years, but no one really tells you about post go live support, right?
It's like, it doesn't end when you go live.
It actually almost begins again.
When you go live. So. But onto the meat of the show for today, I want to talk about you and what you're doing at Cura Work and some of the stuff that you've been through in your finance career.
So I guess, maybe to start off, you move from CFO to CEO and co-founder of Cura Work.
So tell me what led you to make the move and what you're doing now at Cura Work.
Yeah, as probably most people that are listening, you know, if you're ambitious and you want to try to get to the CFO, you know, C-suite level, you think that I just need to get there.
And I think that's perfectly valid.
And I think that's great.
My entire life, my just how I'm wired is I just need to keep moving up, right?
And when I got to the CFO level, I looked around and said, wait a second, where do I move next?
And so that bothered me.
I'm just, I just wired that way.
And I, and I asked, I was actually UCLA Anderson and the executive MBA.
And I asked a few of the professors and counselors and things like that and people with a lot of experience like, Hey, hey, how do I get from CFO to CEO?
And literally the answer to me, I kid you not, they said, you can't.
I was like, what kind of answer is this?
I mean, I'm here getting my MBA to understand like how I can move up and do all these things.
And they kind of broke it down and say, Hey, if you look at the statistics, CFOs in general, do not make good CEOs or do not get to the CEO level because they're CFO for a reason.
They have a different personality.
They're not sales people.
They're not this. The only ones that really move to CFO to CEO are companies that they work in that are financially, they're a financial type of company, and they have expertise in it so they can actually become a CEO.
And that bothered me a lot.
Like this cannot be, I cannot.
Number one, and to be truth be told, when I became a CFO, after about a month, I literally thought to myself, if I had to do this for the next 25 years, I can't do it.
Like I just can't do it. It's just I've been doing this for so long.
It's similar work. You just have more responsibilities, right?
But anyways, I can, long story short, they said you can't.
I said, no, no, no, no, I'm going to make it happen.
And one of the one of the workshops I was at, some guys said basically, Hey, all all you guys have been working in corporate for 15 plus years.
And you guys are executive MBA students, you guys are, you know, wiser in age.
And one of the biggest things I find is that you're always stuck in this grind.
And the problem is, because you're doing the same thing over and over and over again, your creativity starts diminishing.
And so you don't know or you do you train not to really problem solve big, big parts of what you're doing.
Sometimes that nature.
But what really struck me was the creativity side.
I literally was thinking, I have not been creative for the past 20 years of my career.
I was just just doing transactional work, process work, just constantly just every single day, just doing it every single day, right?
But I knew there were huge issues in companies in my company, in my the companies I worked at, so much that we can actually do and so much opportunity.
And the guy literally goes, Hey, since you're in this executive MBA, and we're in the middle of COVID, by the way, so why don't you why don't you all take some time?
It could be a month, three months, six months a year and just think, just think and be creative.
And literally, that's what I did.
And I found a solution for some of the problem that I've been having for literally all my career, never thought there was a solution, found that it actually works, tested it as 200 plus people, professionals.
And now I'm a CEO, building the software and the structure and this methodology to help back offices transform from cost centers to profit centers.
So we're going to dive into what you guys are doing a little more.
But tell me, so what's the status of the business now?
Where are you in product development and launch?
Do you have beta customers?
What's what's going on at CuraWork now?
Oh, yeah. Well, thank you for the question.
It's a I think it's another episode if you talk about startups and how it all works.
It's not linear. It's nonlinear, I suppose.
There's so much learning to be had, but currently we are just coming out of a closed beta.
We have early access. We have customers.
We have paying customers currently and we have a lot of people on trials.
And so we're learning what really moves a needle and helps companies, especially back office people, really deliver value, not just deliver value, because we actually are delivering a lot of value.
It's actually being able to articulate and show the value that we bring to businesses.
So we have customers and we have a working product.
I use it every day. We dog food it every day.
So that's great. Great.
So, okay, so let's let's go ahead and dive in now to the problem that you saw as a finance leader and what you're solving for.
So, you know, from you and I talking before the show, we talked about how finance and accounting teams are often seen as, you know, cost centers or second class citizens within an organization.
And it's hard to show that value.
So I guess from your experience, why does this perception persist?
And what are the underlying factors contributing to it?
And then how do you see what's sort of the path out of that?
Yeah, that's the crux of it.
So the perception of us being a cost center is actually the reality.
Currently, right? We are a cost center.
And the question really is, why are we a cost center?
And why are we always stuck in as a cost center?
There's a there's a few things that I've learned across my experience in my career is that one of the major things that I picked up on was whenever we talk about, you know, sales or customer service, or like operations and manufacturing, things like that, we always talk about, hey, how can we improve you guys?
How can we improve the sales team and the processes and the tools and the methodologies and all these things so that you can do be better at your job?
Right? But for back office, I literally have never heard that in my entire career.
If anything, we always hear, how do we reduce you guys?
How do we mitigate your team?
How do we mitigate your teams?
Right? How do we have less cost of your team?
So we're already the perception in businesses.
Back office is already a second class citizen.
And because of that, we're undervalued, we're underdeveloped, and we are lacking innovation.
Right? And so there's a lot of things working against us.
We're already perceived and deemed the cost center.
But the question is, can is that is that really what we are?
That was my question. It's like, why are we called the cost center?
Well, number one, because most of our most of our time is spent on cost generating activities such as payroll, right?
Or month in close reporting.
Payroll does not make money.
But what I've also realized is, and my teams and others that I know, there's so many projects that just lands on our plate.
Annually, we have projects, you know, we month, we have so many products that always come.
I know of companies that when I ask them, how many projects do you have at any given point?
They're like, I don't know, like 60 to 80.
Right? It's like, well, how may how long do you think these products have been in this project topper?
And some people go, Oh, there's price in there that's been in there for seven years, we talk about it every year, never gets done.
Right? And so I never put two and two together until I started being more creative and listening to that guy in the workshop.
And I realized, wait a second, we have these projects.
But what are projects? Where do they come from?
They come from these strategic initiatives that come from the top.
So it comes from the top down, right?
So just a quick little thing.
Executives, right? Upper management at the beginning of the year, they usually have an annual meeting to plan for the rest of the year.
And they say, Hey, these are our top three strategic initiatives.
And what does that actually boils down to that boils down to a portfolio of projects.
And then at the end of the day, it's one project that goes to a team or department group individual, and what a person has to actually execute on that project.
Right. And so projects are strategic.
Projects are new. They're challenging.
There's a lot of value in projects.
And the strategic projects are growth generating, profit generating, revenue generating, right?
That's the whole point of why it's called the project.
So in back office, if you look at the type of work that we have, we have all this, what we call our day job, and I could break it down into two other ones, but let's just call it day job.
And on the right, we have projects here, but we can, we never have time really to get there.
And therefore, we're always stuck as cost centers.
But if we can reallocate some or a lot of our time to project work, then we can actually become a value center or a profit center.
Yeah, that makes sense.
And the difficulty is trying to measure that and track it and see where the time goes.
And whenever I had an organization, I'm a big fan of MBO management by objective.
Let's put this in place.
Let's know what we're working on.
Let's, you know, it's our bonuses.
It's a, you know, how we measure ourselves and how we combat the idea of, you know, just being a drag cost center wise on the company show in that value that we create.
And I think that that has to come just like the projects come from the top down, sort of that direction and what the objectives and goals are has to come from the top down.
And I think a lot of our listeners are first time managers, and they're moving, you know, from that individual contributor role to now managing teams.
And I think thinking about where those managers sit, you've spoken about the real role of a manager being often misunderstood and overlooked.
What do you believe is the true role of a manager and what prevents many organizations from realizing this?
Right. You actually hit something early in your question there that said the visibility or measuring, right?
It's hard to measure. So that is actually the answer and the problem.
Back offices, historically, since I don't know the industrial revolution, maybe, maybe a little bit after that, we don't measure what we do.
I talked to a CFO about what we, what our product does and our solution.
And he literally goes, Hey, Daniel, I just realized something.
I said, what, what, what, what is your realize?
So I'm a CFO. I have, I, I mainly manage finance accounting.
My teams are the most analytical people in the company.
We measure everybody, all the other departments, engineering to sales to, you know, product management and goes, you know what, we don't measure ourselves.
That's the problem. And that's actually the problem that we're solving because that is the crux of why we're stuck as a cost center.
And that's why also your question about being what, what does a, what does a manager do or what are they really supposed to do?
They're doing what they're supposed to do right now, except they're not equipped properly with the right data or the tool, their methodology of how to actually be effective, more or more effective in management.
The reason why is that is what I say.
The reason why I say that is this.
In anything that we do, right, if you plan, if you're trying to get to point B, if you don't know where point A is or where you are, it's literally impossible to get to point B, right?
So you have to understand where you are in point A.
So there's a, as many of you guys may know, Peter F.
Drucker, who is the father of modern management.
If you don't know him by his books, it's unbelievable, the things that he says, there is a quote that he has quoted all the time, but he's misquoted all the time.
And the quote is, the misquote is this, if you can't measure it, you can't manage it.
So many people, I would even tell you embarrassingly enough, even at NARC, when I was in the consulting firm for 12 years, we used to say this all the time.
And I used to say it even thereafter, until literally like three years ago when I really learned what the real quote was.
So the thing is, people think if you can't measure, you can't manage it.
But actually that's a quote from somebody else.
And there's another part to that.
He literally goes, no, no, no, we do that all the time.
We manage things that we never measure, right?
We manage a lot of things that we don't measure.
It's like, that doesn't make any sense.
So that's a whole different quote.
What Peter F. Drucker actually said was, if you can't measure, you can't improve.
If you don't know where your starting point is, you don't know how to get to the next point, but then you can't improve yourself.
So that's why when we talked about the ERP implementation, the most important part is measuring your current state to understand where you are so that you can get to the next step to the future state.
So the management is literally the same thing across the board.
We have to measure. How do we know salespeople are doing well?
Because we measure their sales.
How do we know back office is doing well?
We don't measure anything so we don't know.
So hence we're stuck as customers.
So going back to your question on what is a real manager or what is the true role of a manager?
We're already doing the true role, but we're doing it in a less effective way because we don't have to write tools.
And really largely, we do not have the measurement or the data to really be an effective manager, if I may say, without trying to not saying that you guys are not effective managers, but we're trying our best, but we're lacking the tools to be better.
And so I'll say this. The reason the role of manager is to manage people and processes so that there's some sort of result at the end.
And so when we talk about process, that's the critical point.
What is the process? Well, process can be broken down into different types of processes and the types of work that you do, whether it's like recurring work, whether it's ad hoc work, whether it's project work.
That's actually the three types of work that everybody does.
And the process of doing that really matters.
Why? Because I'll tell you a quick methodology that we've come up with is this.
Since everybody has three types, every literally every person from intern, all the way to CEO has three types of work.
Recurring work, all the things that you do, you have to do every single week, day, week, quarter month accountants, or, you know, we have to do payroll every two weeks, recurring work, ad hoc work, all the fires, all the issues, the rework, the issue, the interruptions that happen every single day.
Right. And the last one is projects.
Right. We all know projects.
It's kind of starting in a sort of a planned outcome.
We need an outcome. We have a plan of how to get there.
Right. And it's usually more than a week or so.
The whole entire world is focused on projects.
Why? Because we just discussed that it's always, how we look at business right now, all the time is top down.
Right. We look at from the strategic initiatives of the executives, it comes all the way from portfolio of projects to projects.
And so all these projects are so important.
And how do we know that? There's like hundreds of project management softwares, right?
Hundreds of them. And they all end up being similar and the same at the end.
They just because of big to-do list.
Why? Because the reason why it becomes a big to-do list and just sits there and no one actually, it's not sustainably used.
And I've used almost all of them in my life is because no one ever gets to these projects, like we said.
And the question is, why don't we get to these projects?
It's because the, the, the projects is actually third in line or third most important.
Although the business thinks it's the first most important, in reality is the third most important type of work.
Why do I say that? Recurring work is the number one most important.
Why? You can't say, Hey Glenn, so busy this week, can't do payroll.
It's like, no, no, no, no, no, no.
Whatever you do to speak, you have to do payroll.
Right. The second most important ad hoc work, the fires, they're in your face.
You have to fix them today is urgent.
That's why we call it a fire.
It's called firefighting.
And so the first two, we have to take up the bulk of our time when I are in our, in our studies and in our experience and working with clients on average 90 plus percent of our entire year is spent on recurring and ad hoc work.
So very little, if any is spent on projects, but we get all get rated on project work and we never have time to do them.
So as managers, what are we supposed to do here?
So we're constantly asking, what do we do?
What, where is this? Where is that?
Are you done with your project?
Are you done with your objectives?
But the, your team is always saying, I'm so busy.
I'm so busy. I'm underwater.
I'm underwater. I need more help.
So we can never actually get to these projects.
They're always stuck in the first two.
Why? At the end, it comes back again to measuring.
We don't know exactly what people are doing.
And therefore we can't actually manage them properly.
So the answer, how do we actually become better managers?
We first have to measure what everyone does so that you can make better decisions and be a better manager.
There's a whole thing about micromanaging that we might get to, but I'll leave it there.
I can talk for another 10 hours on this subject by itself, but it's all about measuring, measuring, measuring, so that we can make better decisions with the data.
Yeah. And I do, you do have a kind of a provocative statement around micromanagement.
I do want to come back to that.
But while you're talking about all the different types of work we do from the recurring work to the ad hoc work to the project work, I think about, you know, sort of analysis, paralysis.
And when you have just too many choices in, in what you're doing every day and thinking about trying to prioritize, if it isn't directed by a manager and you're an individual contribute, contributor, and all these requests are coming in, it's, it's very hard to know what to work on.
You're just, it basically it's the thing where the person who's loudest in your ear is probably going to get, get the most attention.
But when, I mean, when you have this laundry list of all these different types of work and you've got the emails and the ad hoc requests coming in and, you know, forget about trying to do deep work or anything, you're just, everything is just, is firefighting.
I mean, for finance teams, what are some strategies or best practices that they can do that they ensure that, you know, yes, obviously you've got to get your recurring work done.
You've got these ad hoc things that come in.
It could be some director or VP from another department, you know, saying, I've got to have this today.
And you've got your, the project work that is a company priority that is part of your MBO.
I mean, how do you balance all that at the, at the contributor level, or maybe better asked at the management level?
Right. And that is exactly what that problem or those are, that's one of the major problems we're actually solving for.
So the question that you're actually asking is, how do we improve our situation as a manager or an individual contributor?
Right. That's the actual question.
But then we know improvement can only come if you actually measure what you do.
And actually there's an initial, to make it a little bit more full on what this measurement means.
Yes. Like other project management tools, they do measure to a certain point, right?
That you can put in the task, you can maybe put an hours or things like that.
But the thing is the current tools, their methodology is not measuring in totality, your total work.
And it might sound scary.
It might sound like people are like, oh, I'm going to spend all my time now measuring everything I do.
Right. It's actually very counterintuitive, just like micro management is counterintuitive.
Measuring work is counterintuitive.
We think it's going to take a lot of time.
We think that, you know, that my manager is now going to micromanage me more.
But actually it's the opposite effect.
When you actually start measuring your work, what actually happens?
Well, let's talk about what happens when you don't measure your work.
When you don't measure your work, you're just constantly, like you said, bombarded with all this ad hoc interruptions, calls, emails, plus trying to do your work, plus, you know, management telling you to do these projects.
Everything's just everywhere.
Right. You don't, it's very difficult to prioritize.
That's why we always say, I'm busy, I'm busy, I'm busy because we don't measure what we're actually busy with.
Right. Since we don't know what we're busy with, how in the world is management going to tell you what to do or manage you and direct you what to do?
Because they themselves are now one degree removed from even yourself.
That is the, you're the, you're the, you're the person that received all this work.
Now you're asking a manager that doesn't know even they know even less about what you do to manage you, to direct you in the right direction.
Like that doesn't even make any sense.
Right. They have less information than you and they're, you're asking them to manage.
What are we talking about here?
Right. So the main thing about measuring, it provides visibility.
So when you start measuring work in totality, what you have actually created is a single source of truth of your work.
Therefore, you and the manager on the same page, and you're talking about the same things.
You're aligned. You have better communication, less misinformation.
Actually, it's actually exact information.
So now you can say, hey, we agree that I'm going to do this this week, these 18 tasks.
Well, the CEO just sent me this project.
I think it's going to take me like two days to finish this.
He says it's urgent. Well, what can I do here?
So now the manager can actually manage it.
He can say, hey, actually, what you have to do this week is you're in month and close, man.
You have to do, we don't want to be late.
We have, let me talk to the CEO.
So now what happens is, when there's visibility, true visibility, managers are not, they're not micromanaging anymore.
They're actually helpful.
They go, instead of saying, where is this?
Where is that? Where is this?
They say, how can I help you in this?
And users or the individual contributors, they actually start owning their work and they go to the manager and say, hey, I need helping these two things.
This has happened. So it becomes the workplace that we all desire, right?
Where the individual contributor has autonomy, has ownership, has empowerment.
And at the same time, managers can actually do what they're supposed to do.
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So I think about that as a manager and as a data guy.
I would love to have data on what my team is doing all day, every day and to help me figure out where inefficiencies are, where things they're getting distraction.
But two things that you've talked about are things that just get people to roll their ass.
So I've done a lot of work in service companies that do time and materials billing.
People understand if this is billable to a client, track my time, no problem.
As soon as you ask them to track their admin time and it's outside of something that's billable to a client, they just, oh my goodness, I could never do that.
Why are you micromanaging me?
Why do I have to fill out a time sheet for this, in the administrative work I'm doing, I feel like I'm being micromanaged.
That feels terrible. It can be a demotivator.
You think about someone, if you call someone a micromanager, that feels like the worst insult you can give someone who's a manager is she's trying to watch everything that I do and she doesn't know how to manage because she's so involved in everything I do.
So kind of walk me through both those two things.
One, the problem that people have with logging their time, where my experience has been it makes them feel like they lack agency and that they're just another cog in the wheel and that their contributions aren't valued if you have to watch what they're doing every minute.
So that's two big things to overcome.
So maybe, I don't know if they can be addressed together or if they have to be addressed separately, but sort of the notion of logging everything you do, mapping out, planning everything you do, and then the idea of what a manager does and their visibility into it.
So that question presupposes, does underlying assumptions to those questions?
The underlying assumptions are, if I show you everything I do, you're going to be more micromanagy.
And the negative impulse that we have when someone says, hey, measure or track everything you do, tell me what you do.
We have this negative, I don't want that.
You're impeding on my privacy and things like that.
There's a couple things.
Number one is, at a very high level, why are we working?
We're working for a company so that we can be successful.
And how do we know if we're successful?
Because we measure from one thing to another, from getting from this place to a better place or from $5 million to $10 million dollars.
We're measuring. So actually, everything in business we measure.
To be successful, we have to measure.
And again, I said, all other functions in the company, sales, operations like manufacturing to customer service to engineering, they measure.
The problem is, literally I call the back office last frontier.
We are the only ones not measuring ourselves.
And therefore, we always get, lack of a better term, we get the crap.
We get a lot of crap given to us every single day, because we don't measure it.
Imagine if we can measure all the crap that we get and go, hey, look, this is all crap work.
Do you still want me to do this?
And they're going to say, no, why are you doing that?
So I'll give you an example.
We did this with a client.
We looked at an accounting manager's job description.
She was 140% utilized just on her recurring work.
Additionally, she had another at least 40% of ad hoc work that she was getting.
So we were looking at a couple things.
We're looking at her current recurring work.
We're like, what are you doing here?
We can now see it. So we can ask questions.
What is that? What is this?
And she was doing a ton of reporting.
And we said, why didn't I even know?
The manager said, I didn't even know that you're doing this reporting.
What is this for? What is this for?
And then they're like, Oh, this is for ops.
I do this every week. They're like five hours a week.
Like you make this five every single week, five hours.
It's like, yeah, I've been doing this for like three years.
We're like three years.
Like, whoa, that's a long time.
Did they still use it? Actually, they're doing it for five years.
They're like, they're five years, five years.
Like, are you sure that they still use it?
And she goes, I don't know.
It's like, what do you mean?
Who do you send it to? So we talked to the person we sent him and say, hey, do you use that report every Friday that you get from this person?
And he goes, what report?
The report on Friday, please check your email.
And I go, Oh, that email?
I haven't even checked that email.
I haven't opened it in three years.
Three years. Another similar story was we looked at someone's ad hoc work and we found that all these reports for sales were needed.
And it stemmed mostly from this one person.
Now that we have visibility, we said we went to this person.
It was literally like 60 plus hours a month for accounting.
This one person was getting 60 plus hours for reporting all the supportings that he needs every single month.
And we went to him, and he said, what's going on here?
Do you need all these reports?
I go, whoa, am I in trouble?
It's like, no, no, no, no, we just want to know if these are important.
And he goes, I've been here for years.
No one said anything to me.
Like, understood. We're just figuring it out.
Like, what do you, can you tell us like answer the question, please?
Like, is this important?
And he finally looks at this report and goes, Oh, yeah, those sales reports, most people don't even use it.
I just need these three if you really ask the question.
You're like, seriously, we went from like 60 hours to five.
Right? It's just like, just because we lack visibility.
So the question is, it's going to be a waste of time.
I put all this time to measure it.
Well, actually, you're wasting so much more time by not measuring.
You have no idea. And the kind of a hilarious thing is, we actually do measure our work partially.
I asked people, Hey, how do you manage your ad hoc work?
All the things that you get, people go, Oh, I put it in my Asana or, you know, Monday, or I put it into my calendar.
And some guy goes, if you can see my three monitors in front of me, I have 75 post-it notes.
So I'm like, so you are measuring to you are managing it to a certain extent, you are writing it down, you're putting time to it.
All we're saying it is do it in a universal way that may actually take about the same time if less, actually, as you get used to it.
And so measuring is the most critical component of all this coming to micromanagement.
Now, I think we kind of talk about it a little bit, but what is micromanagement?
Why do people have this feeling about micromanagement is because they're trying to keep you accountable.
They're by asking you questions.
Where is this? Remember, I told you when we talked Wednesday, you said you're going to be done on Friday.
It's Monday. I didn't see the report.
You're like, Oh, I can't do it for whatever reason.
Where is that? Where is this?
They're constantly asking questions and that's called micromanagement.
The question is why are they asking questions?
Why is there micromanagement?
At the very underlying, at the very bottom of the very beginning basis of it is lack of trust.
The question is why is there lack of trust?
Lack of visibility. They're asking you because they can't see or they don't know that you actually did what you said you're going to do.
So now, if you have visibility, say, this is what I'm doing this week.
These are the 18 things I am supposed to do.
I did 16 at the end of the week.
I have two that I didn't do and I could explain those because I got four other ad hoc work.
Imagine if you could do that.
There are no more questions of why.
It turns into how can I help you do this?
Why are you getting four ad hoc work?
I see this happening every single week and it's coming from this department.
Let me go talk to that manager and see what's going on.
Let me see if we can like mitigate that or fix it for good that you don't have to keep doing this every single week.
And so it becomes that's when you actually are able to manage properly.
And at the same time, you're able to work properly as an individual contributor because you know exactly what's expected of you and you can explain the variance.
I'm talking to FPNA people, right?
We always talk about forecasting and what is the basis?
Budgeting, a budgeted or planned versus actual and variance.
And we want to manage the variance.
Is everything with the plan?
We don't care. That's all good.
It's the variance that we're concerned about, especially the negative variance.
So we should be looking at tasks and our work in the same way.
What do we plan our tasks for the week?
What do we actually get accomplished?
And what is the variance?
So now instead of talking about all the things, you just talk about the variance, the two, three, five things instead of the 40 things that you're supposed to have done.
If I'm managing a finance team, what are the metrics?
What are the measurables?
I mean, I know kind of the only thing that comes to mind for me, the first thing is obviously how long does it take us to close?
And did we miss payroll?
Did we, what mistakes did we make?
So what, I mean, to effectively manage the team, if you could have this omniscient view, superpower in, what are the key, the KPIs, the things that we would want to measure on our own performance?
Good question. I would say that it's more general than that.
My assumption here is that people in the back office, finance accounting people, we actually know how to do our job.
That's my number one assumption.
We know what we're supposed to do.
We know how to do it. All right.
The problem is all this other stuff that happens that derails us.
So the question really becomes, and I don't think we recovered this, we kind of did.
Oh, actually we did, is that the back office, we're the last frontier, right?
Like I said, the last frontier, how we are the only function in the business that doesn't have a measure of success.
All other functions do.
Sales, we say, we say, hey, for this company, every single salesperson has called 500 leads.
You go through the sales cycle to conversion rates, 2%, and you'll make a million dollars.
So everybody has to do that.
But in back office, you can't say, hey, all FP&A people, you all have to do this.
That doesn't even make any sense.
Why? There's a Gartner study that said that 4 to 500 companies every single month back offices do 600 to 800 tasks and services for the company.
600 to 800 on average. So how are you going to say, everybody do 600?
That doesn't make any sense.
So the measure of success, what I found, the secret sauce, if I may say, I'm just going to tell you guys, the secret sauce of how to measure performance is actually an individual measure of success.
And it's based first off your job description, your recurring work.
It comes back to that same thing, recurring adult projects.
Because recurring work is actually measurable.
Because that's what you get paid for.
You have to do that. You know when you're supposed to do it by.
You know about how long it takes.
You understand that. You have that utilization.
So that's the basis. How much time am I spending just on my recurring work?
You can actually calculate that pretty simply.
And it's recurring, so you don't have to keep inputting it.
You should do it one time.
And the flip side of recurring work is free capacity.
Free capacity, you're supposed to be doing what?
Projects. Why? Because it moves companies forward.
It grows companies. What's the problem?
The second work in the middle, ad hoc work that ferels everything.
So how do we measure success?
What are the metrics of success?
You can measure it like what's month and close in date, but actually in my opinion, where you start is the individual.
And that's how professional growth happens as well.
And at the same time, it helps grows the company.
And the reason why I say this is there isn't a measure of success that is universal for FP and a people or county people because you have two accountants in one company that can be doing drastically different things.
So really what back office does is we're very fluid to a certain degree.
So everybody has a set recurring work.
Now that's one of your metrics.
What is that for you for that individual?
What is the amount of time this person should be putting in for ad hoc work?
What is what is a reasonable amount of time and that we should set is a two hours a day, eight, four hours a day, is it one hour a day, is it zero?
Depends on the company.
And then how much time should we expect them to work on projects that helps the company move forward?
So I think in a high level sense, that's those are the metrics.
And it's actually an individual, the methodology is standardized.
Everybody should be measured this way at the very basic level.
But in terms of what the metric is, it's an individual metric per where your company is per the maturity of the person and the role.
Yeah. And I think, you know, without that measurement and visibility, you do things as a manager like you have your team spend more time putting together status reports for the week and updating their projects and just, you know, the sort of verbal communication around it.
Whereas if you're actually logging the hours and tracking it and everything, you have an idea of, well, remember we had budgeted five hours a week for you to work on this project.
And now I see concretely, you only worked on it two hours this week, where did that extra time go?
And I think, you know, this could, you could really get bogged down in sort of the sausage making of our job of the month in close, the quarter close, the filings, the everything that you go through, running payroll, bank rights, whatever is happening in the department.
And it's hard to provide value when you're just going through the motions of doing the work, of being sure that everybody's paid on times that, you know, being sure that we don't miss the close time and inventory counts, whatever we're doing in our group, it doesn't feel strategic.
But there is the role of finance has shifted over the years.
And certainly you have to have the people who are doing the close and providing all that information.
But then it's what you can take and do with it.
And I'm wondering, you know, do you see are there efficiencies to be gained?
Because when you talk about the management of it, it's easy to lose sight of the end product that we're actually providing.
But if you are effectively managing this, do you see the potential for teams to gain efficiency and to be able to, because they're tracking at this kind of level, transition to where they actually do have more time, and they can carve out time for strategic work and sort of that deep work and thinking at a higher level than just transactional?
100%. That's literally the goal.
So the perfect business, actually, is in terms of people is to keep to give people perfect autonomy, that they are able to do their own work themselves, make the best decisions themselves, prioritize themselves, right?
That's the holy grail. Now, how in the world do we get there?
I repeat myself so many times, it's actually measurement and visibility.
And this is what I say. So we talked about the initial layer of the benefits of measurement and visibility.
Actually, it takes a lot less time to actually measure than to actually how we're currently working.
If you actually saw, there's a, there's statistics you can look up on Google online that says the average worker, workers productivity in a day is anywhere in between three to four hours.
So in an eight hour day, you're really only productive three to four hours.
And the question is why?
And we say switching costs.
We say, you know, interruptions, all these things, all the things that we said.
But it's because we don't really know we're not clear on our expectations.
We don't know what we're really supposed to do that day.
So we spend a lot of time thinking and analysis paralysis.
Now imagine you have measured your recurring work, just let's say just your recurring work.
Let's say you do payroll every two weeks, it takes three hours, you know, month in close, I have eight activities or tasks on there.
That takes me 14 hours a month, all these things, right?
I have to do this thing, this report for operations.
And now you can add not the first question I ask is this once everybody has that, I say, Hey, in your recurring work, what is improvable?
What is inimitable or what can we eliminate?
If you can do anything, if you had everything at your disposal, right?
What if you could do if you can improve, which ones could you improve?
You can delegate, eliminate, and you'd be amazed people go, Oh, this thing that's 15 hours a month, I that's actually three hours.
And you go, Why is it 15? Because I, it's part of spent 10 to 12 hours a month, fixing, re auditing, reworking things that people send to me.
It's not even my fault, but I have to fix it and tell them do it again, do it again, do it again.
So Daniel, if I had it my way, if they just did it right the first time, my job would take three hours.
Cool. Well, let's write down as a project, not your project, because you can't, you're not managing them, but it's a project for somebody else to do, because this is a problem that we have.
Now we can find ROI, simple things.
How much time are you currently taking?
How much time can you save about how, what is the dollar amount that you, that you are and the improvement and you extrapolate that out to a year or whatever period you want.
And then now you can actually do a weighted average of ROI.
And then now you can, you can literally go, Hey, out of my 32 recurring tasks, actually 14 of them are improvable.
And it's in this order of priority.
So now you have these micro tasks that you can do, or other people have to do.
And now the business knows, Hey, we can actually become better and save time.
So now that I've saved from going from 15 hours to three hours, what do I do with 12 hours?
Projects. I think, I think back office, especially even as a accountant, as a finance person, even in a CFO role, it's not really until I got to the CFO role, I would say that I truly understood or really, I finally had, I was able to kind of think about what is my role here.
And I realized one thing, one of the major things I realized was this, the question is, what is a business here for?
What is the primary purpose of a business?
You can say a lot of different things, but I'll say to make it very easy and simple is to grow a goal of a business is to grow.
If you don't grow, then what is it?
You're dying. Right? If your revenue is stagnant at 50 million.
And every year is just 50 million.
Well, you saw inflation this past couple of years, you're dying.
Then you have less resources, less resources to hire, less resources, money to pay bonuses and do all the great things that you want for people.
So actually, the purpose of business is to grow.
So we all in a company should understand this and have a mindset of growth.
So instead of just because payroll does not grow companies.
So the question is, how can we now be creative and eliminate or make payroll time as short as possible, right?
Without diminishing quality, just put more time into growth.
And you may think, oh, I don't care because that's, I don't get anything of that.
That's business. That's the business side of things.
It's like, actually, no, it's actually, you get so much benefit when you do projects.
Why? It helps professional development.
What is professional development?
We want to grow as a person.
How do we grow as a person?
We have to be challenged.
We have to do something new.
We have to collaborate and learn how to work with people.
We have to learn how to communicate better.
And what are all of those?
How is that? That is all encapsulated into a project.
That's exactly what a project is.
It's new, right? It's challenging.
You have to talk to people, right?
You have to struggle with it.
And so your professional development grows.
And it's actually perfect that you brought the ERP thing up front just by chance.
Because I think, and I'm sure you also attest to it, you probably grew so much professionally just by doing an ERP implementation.
So, so hard. So not only does it help projects help business grow, it helps you grow.
And if you actually now have the visibility, it will tell you, right?
This is what this person has done.
And you will now get rewarded and recognized by merit and not what your manager remembers, what the last two months you did, but forgot the great thing you did in January and February, right?
You will have that visibility.
What I hear on that, and I think about, you know, you can grow a business really in two weeks.
Obviously, the first thought is top line.
But then I think from a continuous improvement standpoint, if you can't grow the top line, if you can get more efficient and grow the bottom line by that, by being more efficient in what you do, then that has its merit as well.
And I think about what if you're going to do an ERP implementation, before you pick the software, you have to figure out what your process is, what's our conversion, you know, from here, here they are in the sales pipeline.
And this is when we're, we win and we bring them in, what do we, what happens with client onboarding and everything that we go through, what kind of project management tools are we using, what CRM are we doing to track the customer while they're with us, what happens when they churn out.
But you have to figure out that whole process and everything, all the touchpoints with the customer and how you interact with them.
And then what had likewise, what happens in the back office to sort of support all that, but you have to document the processes so that you can know where you're kind of your roadblocks are and where you may have gatekeepers and where the process is broken.
So if you don't have the data and you don't know that it takes 15 hours a month to run this report, you know, if you've got an employee that has X number of hours in a month and you're seeing that they're spending the bulk of their time doing this thing that's maybe a low value add, that tells me we need to automate.
This is, I mean, there's so much you can, once you have that data, you can make so many decisions around it.
It opens up everything, literally having the data, the back office can now literally be on par with the front office.
This is why I say we're going to be second, we're going to move from second class citizens to first class citizens or from cost centers or profit centers, because examples are actually the most important, right?
So how do we, how did we actually do something like this?
Or how does back office actually become a profit center?
We may not actually sell to the client directly, but we're one degree removed, but we're just as important.
So as an example, what we have done with the client is this, we found that we did it for salespeople as well.
So it's not just actually back office.
We actually did the same exercise with salespeople.
And we found that this sales team, every single person on average had nine hours of administrative work a week, nine hours.
First of all, no one knew that until we did the assessment.
Secondly, we said, you are not selling for a whole entire day.
And he goes, no, no, no, no, no, no, we sell every day, but I have to do this nine hours during nights and weekends and it's killing me.
I hate it. It like stresses me out so much.
Right? So imagine the inefficiency, the mental drainage, how that affects sales, number one, right?
So we asked them out of all this, I think they had like average, average of like six tasks.
And we said, which one of the tasks can we help you with?
What is the most, what is the thing that you hate the most?
And we thought they're going to say sales force, we hate entering the sales force because most people don't like it.
But they actually said, no, that's actually second.
The first one is what the finance team gives us, the excel sheet that we have to put in what's in sales force into this thing with the probabilities.
They go, that takes me four and a half hours on average a week.
And that actually does, you know, that that's so important because that's for cash flow and all these things, right?
And we said, well, how can, how can we help you with that?
That's just your knowledge goes, no, goes entering it in is the hardest part.
I just need an accountant or somebody that can do Excel.
You just need 30 minutes of my time.
The other three and three, four hours can be done by the accountant or somebody.
We're like, so you're telling me that if we hire a business analyst for $80,000, that we can literally take four hours of work away from each of you a week.
And they're like, yes, that equal that when they when they literally the business goes higher that person now.
And I think they said they made upwards to like, they believe anywhere from 1.2 million to 4 million, depending on how you actually do the calculation, extra revenue just by hiring that $80,000 person, but they had no visibility otherwise.
Right. So that's how and the business analyst analyst did it.
The back office actually helped understand this.
Another one was there was a scheduling, there's consultants everywhere and scheduling and there's this and this company was doing scheduling by Excel in business for decades, still doing by Excel hundreds of people.
They were missing on average 10 to 15 engagements a month.
They had to actually go to the site and they would yell on the screen, the client would call, why isn't your consultant here?
Like what happened? They're taking hours and like, oh, was that someone right away?
By the time it's too late, we have just lost revenue, just lost time, etc.
And I found this and there's hundreds of engagements a month, right?
And so I found that there was leakage here and I asked the team, I was like, Hey, did you guys know that this is happening?
They're like, I had this happening for 10 years, like 10 years.
I did a quick back of the napkin math on how much it would be 10 to 15 a month times the average engagement times whatever.
It was millions. And I said, this is happening just because of a scheduling issue because it's on Excel and you guys are not even good at it.
Your Excel is also bad. It was not, we're not even using the proper formulas.
And so I talked to the back office team and said, Hey, I need two accountants.
I did believe about 60 hours.
I need you to fix this spreadsheet.
They did it in a month and a half.
That went from about 10 to 15 missed engagements to literally like one or two in about a month and a half.
And it went to zero in three months.
So the back office made them millions of dollars just by fixing this spreadsheet.
This one problem that everybody knew was there, but they did not even quantify the effect of it.
And the person that can actually fix it was back office for people, right?
And that's millions of dollars every single year.
Yeah. And you know, you're talking about this from a human resources standpoint, but right now with the onslaught of AI, it goes beyond that.
And I think about automation, integration, data, and implementation of AI solutions here, really not to get into the whole debate on how many of us will be replaced by AI, but augmenting what we do and getting these efficiencies and removing us from these archaic systems like scheduling and Excel and stuff like that.
But moving out of that into more efficient ways to work, I don't think anybody goes and get a master's degree in accounting or master's degree in finance with the idea that they're going to be a data entry person and, you know, doing all this kind of stuff.
So the more of that that we can automate, but by having visibility into how much time we're spending on things that tells us where to focus our automation.
And I think about we have to have the data as the foundation.
Once we have the data and we can see where we're spending our time, we'll know where to point the laser to focus on our automation projects and to get the gains.
And I think, you know, looking at that and seeing kind of where we are with technology right now and with more and more data being collected everywhere, but in particular on like tracking what we're doing on a daily basis and the data that we're creating and the value that we're adding.
I mean, how do you see this type of data and this type of insight into our work efforts merging with AI?
And what do you kind of see?
Where do you see corporate finance evolving in the next five or 10 years with the sort of this convergence of technologies that are coming right now?
I love the question. I'm very opinionated.
And that doesn't mean I'm right.
But I do have an opinion on a couple of these things.
Number one, you said something actually amazing.
You totally understand it is that once you understand, you want to have what you measure and your visibility, you will actually tell you what you can automate or even eliminate or even delegate to maybe third party somewhere.
So it actually gives you clarity into what you need to do to make it more efficient.
But with AI now, if you put AI on top of that, well, imagine you now have the totality of what each individual is supposed to do, 95 plus percent of what they do.
AI is really good when you have good data.
So now you have data. AI can, I would say in three to five years, we would be able to say, hey, we want to grow this company by 10% in this region.
What do we need to do? And so now AI, the thing, because we know what people do and what the outputs were, we know the ROI of the projects that we've done, how we actually grew.
So it would say, hey, the perfect workforce to do this is this.
These people need to do this.
That person needs to do that.
So it'll give you a benchmark of sorts, a guideline of what you need to do.
But at the end of the day, people are indispensable.
AI will not replace the people side because people are actually, in my opinion, smarter, not in terms of compute power, but we have intuition.
We have relationships.
A lot of business is done by relationships, most of it, actually.
And so AI cannot replace those things.
What AI can replace are the repetitive things.
But again, I have an opinion on that.
People say 30%, 40% of back-offs are going to replace by AI.
My question is, well, which part?
AP automation has been around for more than a decade.
I know more companies not using AP automation than companies using it.
They have AI and everything like that now.
The reason is this. It's actually a very simple example.
If I have a home depot receipt and I bought things for project A, project B, and my workshop at work, and it's on one receipt, how in the world do I AI that?
You can't. You still need a person to go, hey, these five things, $687 is project A, $282 is project B, and the rest is internal.
You cannot, someone has to still tell you AI cannot read your mind.
It doesn't know what your intent is actually is in buying those things.
It can maybe guess here and there because if you buy similar things for similar projects, it can kind of say, okay, but if you buy a bucket, how are you supposed to know that?
You don't. So people are, even in the simplest thing, a receipt and most people think AP is probably the easiest place because we have the, it's just volume and transactional, but it's actually even the easiest place we think is really hard.
So can we replace it by AI?
I think that the only way that can happen is if we standardize receipts, if we standardize the process of buying something, which is probably almost impossible.
I just don't know a world that you can do that in because people are people will do whatever we want.
And so if you cannot standardize, you actually cannot automate standardization.
So AI is all about what is it?
I forgot the exact term, but it's finding all this data from all these places and making a best guess.
Well, that's okay. If you're okay with error, like if you have, if you're okay with the margin of error, but if it's margin of error is 2% and this thing is, you know, it gets 2% wrong.
Well, what's the dollar value of that?
It's probably a lot depending on the company.
Yeah, yeah, makes sense.
So, well, I mean, I know we could go on this all day and I'm really, I need to get on the books, our ERP episode where we talk about that next.
But before we go, I do, you know, we just dove straight into some nerdy finance and back office stuff.
But before we let you off the hook, we do like to know a little bit more about you personally.
So maybe, maybe share with our listeners something that not many people know about you, maybe something they couldn't figure out, you know, just by Googling you real quick.
Yeah, I was a fourth grade or someone vacuumed over our TV line.
I came home from school, didn't know that I tried to turn on TV.
And I was like, Oh, the line's disconnected.
I went up there and I put it together and my whole body, I just remember the feeling of this, the electrocution, just just like, I don't know what happened.
Two years later, sixth grade, I'm just daydreaming in class, Miss Williams class.
And I'm like, Oh, my God, I was electrocuted two years ago.
I did not remember for two years.
Wow. And maybe that's why I'm weird.
I don't know. Rewired brain synapses, I guess.
Exactly. And maybe that's why I think differently or whatever it may be.
But that was, it was hilarious.
I started laughing in class.
I was like, I cannot believe I just remember this two years later.
But don't unplug the thing before you guys put the wire back in.
Good advice. All right.
And here's one. We did talk a little bit about Excel.
And I think your answer is not going to be scheduling.
But what is your favorite Excel function and why?
That's an interesting one.
I used to use a lot of functions when I was in the CFO or accounting finance role.
But these days, CFO role, CEO role, I don't play too much in it.
I just do it for casting purposes.
And I would say currently I use the summit function a lot.
It's a very simple function.
My general philosophy is in anything you do with Excel, if you design it and structure Excel properly, your formulas should be as simple as possible.
Because if it's not, it's very hard to understand and backtrack and audit what the heck is happening.
So I would say like sumif, xlookup, like literally the easiest ones as much as possible.
If you can do it, you should use the easiest one.
If you can't, you should rethink probably your data set and how you're actually structured it.
Some data sets are very hard.
I had functions that were like nested like 10 deep, right?
So that happens. But I would say currently sumif is my favorite.
I've been using it a lot recently.
So simple. I love your response because it's sort of the difference between finance people and accounting people.
It's like if I've got to make this, you know, for audit and be able to explain what I'm doing here, we need to simplify it as much as possible where I think sometimes in finance, we just geek out on how complex our formulas can be and like, look at this, this is 13 nested ifs and I've got I'm referencing this.
Through the sheets and to the profiles and you're like, what is this?
What is this? What is this from?
How do I interpret this?
So great answer. So I guess in the final thing, how can our listeners connect with you and learn more about CuraWork and what you're doing?
Yeah, our website curawork.com, c-u-r-o-w-r-k.com or you can feel free to LinkedIn me.
I actually look at almost, I tried to at least almost all my messages with Daniel Pack, P-A-I-K.
If you look up curawork, you'll find me there.
All right, Daniel, thank you very much.
Really enjoyed this episode and appreciate you coming on.
Oh, really fun. We should do it again.
