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And now onto the show.
From DataReels, this is FPNAA Today.
Welcome to FPNAA Today.
I'm your host, Glenn Hopper.
Our guest today is Michael Lanman -Carney, a seasoned finance leader with over 20 years of experience transforming financial strategies to drive sustainable growth.
With a career spanning diverse sectors, including aerospace, software, nonprofit, and manufacturing, Michael specializes in delivering measurable results on a global scale.
Throughout his journey, Michael has orchestrated major financial transformations at industry giants like Kanagra, Experian, and M &M Mars.
From acquisition integrations and ERP migrations to ASC -606 implementations, he has consistently demonstrated his ability to accelerate profitability and operational efficiency for progressive forward -thinking organizations.
He brings a unique ability to adapt financial strategies to diverse market demands, combining data -driven insights with strategic vision that aligns financial performance with business goals.
Beyond his finance expertise, Michael is a dedicated moonlighting critic of theater, ballet, and opera, reflecting his passion for continuous learning and creative problem solving.
We're thrilled to have Michael join us today to share his insights on driving financial excellence with a global outlook.
Michael, welcome to the show.
Very good. Thank you so much.
So Michael, you've had some fascinating roles in FP &A, DLC, Experian, applied composites, and most recently, now as interim controller, Lucas Museum of Narrative Art, which is a fascinating organization.
It's a museum founded by filmmaker George Lucas and his wife, businesswoman Melody Hobson.
Once completed, the museum will hold all forms of visual storytelling, including painting, photography, sculpture, illustration, comic art, performance, video.
I read this, and as a lifelong Star Wars fan, we got to get the first question out of the way.
How is George Lucas, and what are his views on good FP &A?
Okay, great. Well, I'll first talk about George Lucas, and then I'll talk about his wife, Melody Hobson, who is really driving the financial vision.
So in terms of the artistic vision, George Lucas has a vision for the museum.
It's really centered on the power of storytelling through visual media.
His goal is to really create a space that explores how narrative art shapes societies values, beliefs, across various cultures and eras.
There's a diverse collection, a part will be filmed, but it really will range from ancient art forms, contemporary digital art, highlighting how stories are conveyed through comic, photography, traditional final arts, as well as film.
And George believes that narrative art really connects people by portraying common themes that resonate with people from individual backgrounds.
He wants to break down the conventional barriers between fine art and popular visual culture.
So you may have a Norman Rockwell, you may have a Frida Kahlo, and next to it you may have a comic book.
And really, there's a very big component of education, really a lot of educational component to having lots of schools within a 20 -mile radius, maybe a million school children within a 20 -mile radius of the museum.
So really, I think education is very important.
In terms of back to finance, Melody Hobson, who is George Lucas' wife, she's the co -ce of Aerial Investments.
She's a big Wall Street banker.
She's very hands -on, she's on the board, and she's very hands -on in terms of the National Magic Museum.
Melody values emotional intelligence, collaboration and being present in all situations, be it with top executives, to be entry -level employees.
Her leadership style is to focus on fostering diversity.
And the museum is run really on a startup mentality rather than a typical nonprofit.
For in terms of finance, we're very lean.
We have one, we have an intern CFO, I'm the intern controller, and we have an AP manager and a payroll manager.
So basically, run very lean.
Melody's view of FP &A is really kept for its ability to provide strategic insights and drive decision -making just beyond traditional financial reporting and budgeting.
She's a big believer in data analytics, really, really believe her in leveraging real -time information to forecast trends.
And I define opportunities for value creation, really bringing corporate -type FP &A and even Wall Street -type forecasting into nonprofit.
Melody's a big believer in automation and technology, streamline processing, enabling fast and accurate reporting.
Melody has a real strategic mindset, really trying to figure out capital allocation decisions, really figuring out, really, really thoughtfully thinking on how to budget and how to allocate research to the museum.
Unlike other nonprofits, the museum is currently fully funded by George Lucas, so fairly deep pockets.
But that doesn't mean that money is spent.
That still means that money has to be spent intelligently and really, really looking at the ROI.
And in terms of ROI, it's not a return on investment.
It's really not a revenue, but in terms of how can we best educate, reach other communities, the goals of the museum are really to educate, to enlighten, and what's the best way to do that?
Now, due to the museum not being open until late 2025, the museum did have four CFOs in four years, the path has not been studied.
Currently, there's an interim CFO, they are looking for a permanent CFO.
So it has not been a smooth path.
And I think because the museum is in startup mode, there has been turnover because it's not open yet.
Yeah, I could see that.
But I'd say you're saying things that as someone who's spent my life in business and not in nonprofit, but my wife is very involved in nonprofit.
And I've noticed, you know, on the nonprofit side, very mission driven, very goal driven.
And that's, that's wonderful.
More often than not, from what I've seen, any sort of accounting, finance, FP &A is considered as something really annoying and something they don't want to think about, and they're going to pay as little attention to it as possible.
So it is, it's refreshing.
And I think speaks well for, I know it sounds like it's been a bit tumultuous right now, but for the long term success, the fact that they are realizing the importance of controllership and financial strategy and all that and being good caretakers.
Just like in the for profit world, being good caretakers of the investment.
Absolutely. I mean, I think as we're in a startup mode, really we're, and we are run like a startup that are the growth growing pains, which is, I think, difficult startup.
It just happens to be nonprofit rather than a company.
Sure. Yeah. Yeah. So this is a departure from, you've been with some big companies, some, you know, international and very well -known large for profit companies.
I know I went through it in the intro, but let's back up and maybe elaborate a little bit on your career and kind of how you got to the, where you are today.
Well, my career path has been unconventional.
I earned a bachelor's in international relations.
And I initially wanted to, you know, go to graduate school and go to a think tank.
I just knew I'm going to graduate school, but my father at the time was a international insurance broker and he inspired me to pursue international business instead.
After undergrad, I actually went ahead, got an MBA from Thunderbird School of International Global Management, which is now part of Arizona state.
And I graduated 21 with an MBA, but really had very little work, really had no real practical work experience.
I then ended up working as an event producer for an Italian company.
And that wasn't really the path that I wanted.
Ended up working as a junior analyst for a insurance company, which I think no longer in business, was then owned by Xerox, common Forster.
I then ended up working as a financial, senior financial analyst for a company called Davidson Associates, which was publicly held, which was then the parent of Blizzard Entertainment.
Right now it went through numerous owners, numerous configurations, but now it's I believe Blizzard Entertainment.
And that company was a small cap company at the time and a senior financial analyst ended up doing a lot of different things, including my first budget, ended up doing SEC reporting, also filled in for the accounting manager when she went on leave.
So really, a lot of what I've done in my career was really learn on the job.
Unlike my colleagues, I've not done the big four route, the big four CPA route.
But I really... My career is always altering FBA in accounting.
A lot of my positions have involved both.
So kind of went... I wouldn't say fell into roles, but really, I've always been a very quick learner, always loved new challenges.
So I've really learned a lot of things on the job from budgeting, acquisition, integration, cost accounting, system limitation, always kind of came in and learned on the job rather than have the usual path of people usually in my...
People I usually work with who went through the four and have their training sort of at the big four or at a large regional CPA firm.
Gotcha. And so you've come now to the Lucas Museum.
That just... It's such a fascinating gig to me.
And I guess it's just my inner child coming out on the Star Wars thing and not being able to move past George Lucas.
But even if he weren't involved in nature of coming from the for -profit world to a nonprofit situation like that...
So first off, how did you find it?
How did you end up in the role?
And then I want to talk about some specifics to setting up finance and everything in a nonprofit.
Sure. So actually, I was recruited for it.
They were looking...
The controller was leaving, and they were really needing a controller as soon as possible.
I was finishing up an interim controller role with a power supply manufacturer.
They want to do their hiring for profit.
They really want a corporate mindset rather than a nonprofit mindset.
So they brought me in because they wanted somebody with a lot of experience.
They wanted to bring in a corporate controller who could start right away on an interim role, and they didn't need somebody with nonprofit experience.
Now, because there's only currently one funder, which is George Lucas, there are a lot of things that I don't get involved with that, let's say in another nonprofit.
Nonprofit has a lot of fund accounting, whereas you have different funds, different grants.
Because there's one funder, a lot of the account that we do really isn't...
At this point, really doesn't have a lot of nonprofit flavor to it.
Obviously, we have nonprofit financials, which look different than for -profit financials.
But in terms of the day -to -day accounting and FP &A, a lot of what we're doing is not that different than corporation because we don't have to deal with...
Let's say the Metropolitan Museum must have 300 or 400 different funds, that each one has to be accounted for separately.
They can't touch each other.
You have grants, et cetera.
Because we have one funder, a lot of what we're...
A lot of the accounting and FP &A is really similar, more similar to a corporate environment.
So that's how we ended up in this particular gig.
Generally enjoying it.
It's definitely very different.
But I wouldn't say it's a typical...
It's not a typical nonprofit because the fact that you have basically one funder, you don't have government contracts, you don't have government funding.
We don't really have a lot...
We don't really have grants.
So it's definitely not your typical nonprofit by any means.
Yeah. And I was doing research before the show and seeing some of the work you've done there.
Very similar to the kind of work you would expect a controller or a finance professional coming into a business to do.
So I know one of the things was streamlining the month in close, from 25 down to 10 business days and doing conversion of financial records from cruel to cash for tax reporting purposes and the preparation of the whatever the 990 PF tax form and all that.
So for you not coming from nonprofit, maybe walk me through some of the challenges and opportunities as you kind of get your head around this and bring that corporate mindset to the nonprofit.
Well, I think without...
To put it nicely, the pace, even though it's a George Lucas organization, the pace in nonprofit is very slow.
For example, we closed the year in December, but the audit only starts in April.
I have no idea why it should take four months for them to start the audit.
But that was when I came in, came in in January, and the audit only started in April.
So there's definitely...
I'm used to when I'm an experienced...
We had a very quick audit, very, very fast audit, because they were constantly trying to report earlier and earlier to the streets.
So it's definitely very different.
So I think just in terms of the pace, realizing for example, the big thing is AP, for example, they kept AP open for 25 days.
They never accrued AP invoices, for example.
The idea of accruing just wasn't something they did because they never felt a need to close early.
So a big thing was getting AP done, AP closed, and then accruing for what isn't accrued.
Also, moving from a system where a lot of the journal entries you can do paid prepays via fixed assets, bank accounts, payroll, everything was done after the close of the month, during the month.
So really no brain or things that are just normal for a corporate environment were just kind of, oh, we'll get to it.
It was just a very different pace.
The other thing I thought was interesting about nonprofit, when I worked in corporate, I always worked with either a tax department, when I worked in Experian, or when I worked for middle market companies, our tax accounts would do all the conversion of the books, which are obviously in US GAAP or IFRS,
to tax books. Well, welcome to nonprofits, our PWCR authors.
No, you have to do it.
So I know that's normal for nonprofits, but that was quite a learning experience because I've always relied on never have to take the accrual books and change them to tax books, which are actually cash -based.
So that was definitely a new one for me, but a good exercise.
It was a very good exercise, but definitely I have to say there was a new one for me.
And I know that's normal for nonprofits, but in my many years of working in corporate life, the big four -tax team would do that for us.
They didn't have to do that conversion myself.
So it was a good exercise.
Yeah. And just thinking about that, it gives me nightmares thinking of back years ago in Excel, trying to unwind all the accruals just to do the statement of cash flows and to do cash forecasts and everything.
Once you have the accruals in place, then getting your mind around on the actual converting it to cash, it's common for a small business to maybe in the early days, start on a cash basis, and then you have to help them move to accrual.
And that feels good and tidy and right and matching principle and all that.
But then going and switching it back for the tax side to cash, it had to break your brain a little bit, or at least it would have mine, I think.
It was more time consuming than anything.
For me personally, I thought it was a lot...
It took a lot of time.
For me it was more busy work than that, but it was a good exercise because it really makes you think about what you're doing and about the cash flow in a more granular level.
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We're in budget season and hopefully all of our listeners now, as we move into the last two months of the year, hopefully they're getting pretty far along to having their 25 budgets buttoned up.
But Jonathan, our producer here, really loves this question and I think I've veered away from it because I have so many...
I might have PTSD from some of my own war stories, but he really wants me to bring it back.
So I'm going to switch gears a little bit to a question that we're reviving on the show.
Of all the experiences you've had, what has been your worst budget experience?
And I think maybe everybody's kind of feeling the pain right now, going through budget.
So it's maybe we're going to commiserate.
My worst budget experience was at that time it was Davidson Associates, now Blizzard Entertainment.
And the company was very young and nobody's ever done a budget before.
And I never done a budget before, so I had to create everything from scratch and really have to handhold every director and every department and really work with them hands on on their budgets.
And really, it was really the first budget I ever worked on.
And it just was really from starting from scratch.
And it was really handholding every department head and really working with them very carefully on their budgets and working 18 hour days.
So I was in charge of everything except R &D and R &D had their own analyst.
And the analyst had an MBA from University of Chicago and he gave me a budget and a big part of the R &D budget was advances that they have to pay out against future royalties.
So he gave me a P &L budget that had advances against future royalties in his P &L budget.
And I have to explain to him that this is a balance sheet item and that that's not a P &L item.
And even though he was a University of Chicago MBA, he really didn't understand a crew accounting.
So I always tell the story to people that to me, and knowledge of accounting is critical for FPMA.
I met so many analysts, and I don't care if you know, and again, this was a future show of an MBA.
If you don't understand accounting, you're going to flop.
You're going to fail, you're going to have problems.
So it was really the worst budget because it just took a lot of hours and was very painful, very hands -on handholding.
But I always like to tell the story of you really got to understand what belongs on the balance sheet versus the P &L and how to obviously amortize it or show its usage.
Yeah, I can think of those days too within the startup trying to do budgeting where people, for department non -finance department heads, this is their first time maybe, and maybe it's their first time being a department head.
So they've never really thought about a bigger budget and how to address it.
And then you try to give them the GL for their run rate and say, this is what you spent money on in your travel account last year.
What trips do you have planned this time and trying to work with them and get them done?
It is a lot of handholding and I don't envy you that work.
And I'm sort of glad that at this point in my career, I've moved on from those early startup budget days.
So digging a little deeper into your career and the companies where you've been.
So you were at Experian for 15 years.
And I would imagine just such a significant amount of data with that company.
And I'm sure they're the opposite of what a startup environment would be in FP &A.
So tell me about your experience at Experian and what your day looked like there, what your team was like and the challenges and opportunities that you dealt with at Experian.
Well, my first three years at Experian were really a senior mentor for FP &A.
And that was a fairly early days in terms of what, again, that was 2004, 2007.
So their FP &A function has really advanced a lot since then.
So I can tell you about ancient history.
And at that time, it was fairly 2004, 2007.
And FP &A role was very, very old school at that point.
So the company is a British company.
And I worked for the North American division.
And at that time, controller and CFO were very heavy on data.
And this was before things were going online.
So we had literally every month, we had a 75 page book with KPIs, graphs, charts, everything you can imagine, different P &Ls, charts.
So that was a lot of busy work, a lot of work.
And obviously, there was no AI then.
And this was all Excel based.
So it was very, very time consuming a lot of work.
And I had two analysts.
And all we were doing really, a lot of the time was doing those books.
Also, I had a big three statement model, P &L balance sheet castle, because we have the P &L and then we cast was very important.
So part of the big part of my job is maintaining a very creating and maintaining a very detailed free statement model with P &L balance sheet castle forecasting that was rolling.
We ended up getting that automated at the time with a product called Oracle financial analyzer.
I don't think it's valid.
I don't think it's available anymore.
But there's an Oracle tool that we're able to automate the model through.
So that saved us a lot of time.
From that, I was the financial manager for corporate reporting and systems.
So I was basically responsible for the month and year end quarter and financial reporting and statutory reporting for the North American division was $2 billion.
So that involved consolidations, it involved a lot of reporting.
The reporting to our corporate headquarters in London was reported on the stock exchange.
Fortunately, unlike the US, the only report full financials twice a year, so four times a year like in the US.
So that was a saving grace.
I did two different implementations.
One was one called Everest where we used for consolidation.
Then we moved to HFM.
We moved to Hyperion, Hyperion Financial Management for consolidations.
We implemented that.
Part of my job was also preparing external financials.
So dealing with vendors, even though we're presenting consolidated financials to our global headquarters, contracts with vendors or customers would be signed with various legal divisions.
So a lot of times we have to do offline legal financials, statutory financials, for divisions.
And those have to be, because our books were not that clean, have to be done in because our books were going to sell.
There's a lot of offline work in getting divisional financials for various legal entities for let's say banking or vendor customers, etc.
A big part of it was also coordinating the external audit first with PwC and later KPMG.
I was also... The three...
The Castile Forecasting model came over with me to the accounting division, so I was still responsible for that.
A big part of what I was doing there is also acquisition accounting.
So I think there were 23 acquisitions in 12 years that I was working on.
So basically doing all the financial integration, 23 acquisitions, and we have some dispositions as well.
That was a lot of work managing.
And some of them were smaller, some were bigger, but really handling the financial side of the acquisition integration.
So there was a lot of work, usually a 60 -hour week.
So definitely, I learned a lot.
I also had an offshore team.
We also had a team that was a development team in Costa Rica, and I was also responsible for managing the manager and his two analysts for the Costa Rica development team.
We're doing both the analysis and the accounting.
Costa Rica team. I learned a lot, but it was definitely a very challenging in terms of work -life balance.
Yeah, and when you talk about M &A accounting, I think about the balance sheet and the goodwill or networking capital, the stuff you work on at time of the transaction.
But then also making me think of my past post -M &A tracking of synergies.
Did you get involved with the promised synergies from M &A activity tracking?
It seemed like that was always an area that was rife for conflict, is tracking synergies post -merge?
Yes. We've always had tracking of synergies.
And like I said, having done a lot of acquisition integration, not just with other places, I find that when I was experimenting with an M &A team, it was totally separate from finance.
When I worked for a P -owned aerospace company, we had the private equity team do the M &A.
And in my experience, going back to my experience, the promised synergies, in my experience, have never come to fruition.
There's always seen even 50 % of the promised synergies come to fruition.
And I've worked on a lot of acquisitions.
I find that you have a big disconnect between an M &A team and what the controller or the corporate FBA team are doing.
And there always seems to be a disconnect, at least in my experience.
So I found that to be pie in the sky.
There's sort of a wonderland that the M &A team comes up with.
And then there's the reality, which is completely different.
And just to give you one example, they say, we're going to promise signatures within three months, six months, whatever, usually takes a lot longer than that to integrate, to get things going.
The M &A team usually doesn't understand how long it takes to do things.
So there may be synergies, but it usually takes a lot longer than the M &A team does.
The other thing that I found is the cultural component.
The M &A team never understands the cultural clash that an acquisition or merger, and the toll that it takes on people, the people who end up leaving, the people who end up staying and end up trying to sabotage integration.
There's a human component that often derails the acquisition or the merger.
And that's something that the M &A team does not have.
And the due diligence does not say, oh, this is the...
I've yet to see a quality of earnings, or really due diligence really talks about the human component and the potential for problems.
Yeah, and that's your answer, exactly where I was going, because I've done share of M &A transactions as well.
And if you're on the sell side, it's so much fun to build up and help come up with what those synergies are, and just laugh on your way out the door.
I can't remember the exact stat, but it's something like more than 60 % of all mergers actually destroy shareholder value.
And I think about the Kraft Heinz case study and a million of them out there were actually so spin -offs, divestitures end up being more profitable on a percentage basis than mergers usually are.
And to your point too, on the M &A having to track those synergies in the accounting, I'm in 100 % agreement with you that the M &A team needs to track those because a true controller, true gap accounting, it's like, you go over there and you do your P .E.
accounting and your management reports.
That's not going on my books, brother.
So the way we got connected was through some of the great articles on practicalities that you're doing on LinkedIn.
And you mentioned aerospace and FP &A.
And then the other one...
Actually, I want to hit them one at a time, because there were a couple that stood out to me.
Tell me about your piece on aerospace and FP &A.
So my experience in FP &A and aerospace has really been as a controller for more than three years for a P -owned middle market company, the Aerospace component.
And then I also worked as a divisional controller for ComTech, which is a public health company, which unfortunately, I was laid off because the company when I started their stock price was at $12.
Now it's at $4. So that should tell you all you need to know.
So when I wrote an article on FP &A and aerospace, it's really wrote about what an ideal best practice should be and really no different anywhere else.
So I wrote best practices, however, the reality of aerospace that I've seen, it tends to be rather behind the times in terms of accounting and FP &A.
And I'm getting out of my soapbox.
But I find that aerospace companies, be private or owned by PE, sometimes tend to focus on the wrong thing.
So because of ASC -606, you have a way to manipulate your...
I want to use the word maybe manipulate is the wrong word, but you can build up inventories and as a result, show higher revenues and higher income, book income book revenue, because you could basically say, I received these parts and I can recognize revenue and they really haven't shipped yet.
So my experience in aerospace was that there was an emphasis on book profits rather than cash flow.
And a lot of times you may build up inventories, you're not shipping and then you reach a point where cash flow is tight.
So I found that the financial management of aerospace that I've seen was more geared towards book profits rather than cash flow management.
And again, social and middle market is our highly leveraged companies.
And it's running a very delicate dance of trying to increase your book profits but not running out of cash.
And I'm just old school, I believe cash is king.
I just found that the emphasis on top line and bottom line was at the expense of cash flow management.
You can build big receivables, big inventories in your balance sheet and show high profits, but then you look at the balance sheet and your unbuild is enormous and your inventories are enormous and you have all this working capital that's tied up in the balance sheet.
And again, I can't speak to large aerospace companies but just can tell that the small cap and middle market, really the emphasis on even and revenue at the expense of working capital management, I found to be not in line with what I believe should be ideal financial management.
I can't speak for all aerospace companies, but there's just been my experience.
So when I wrote my article about best practices, really is about basically using rigor, rigorous capital budgeting, rigorous trade working capital management.
And the other thing is if aerospace, the overall allocation, sometimes companies don't quite understand how to allocate their overhead.
And it's very important to really have a very rigorous overhead allocation.
Because really, when you're costing out a project, the projects were sometimes not fully costed.
So you may think that you're making X amount of margin, but if you're not costing your full overhead, your full costs and your bottom line of a full company is going to be negative.
So I just found the FBA and in my experience, aerospace to be quite behind the times and also the focus on top line and bottom line, the expense of working capital management, I thought was just wrong.
Yeah, and it's interesting, as you talk about your experience in aerospace, I've been brought into a couple of, maybe we'll call it a long in the tooth PE investments, where PE has been in there six, seven years, and they're ready to get out.
And they're kind of a mid market company that just got stagnant.
And it's the same kind of thing where sometimes companies leverage or sometimes they're just trying to jockey for position to unload it on the next person.
So you get into this dance of, okay, in EBITDA and you get into adjusted EBITDA in the ways that you're sort of moving things around the different accounting approaches and shuffling things around with that focus on this is our top line, this is our net income there, this is our EBIT, whichever you're
looking at and trying to position the company for evaluation rather than for growth or even keeping it as a going concern.
It can get, it feels very removed from the real world and like the priorities are off.
So I can relate to the experience that sounds like you have there.
To come to what you're saying, two things, adjusted EBITDA, aside from EBITDA, look at WeWork, right?
WeWork when they went public, I think they took all their cards and put it below EBITDA's adjusted EBITDA.
So just the real sinkhole for garbage.
And the other thing is, when I was in PE, they always talked about EBITDA multiples.
And I always never understood that.
Because let's say I'm going to buy, let's say, a gas station or a store or whatever business, I want to look at the cash flow.
I'm not going to look at EBITDA multiples.
But I always find it very weird that they always talk about EBITDA multiples rather than CASL multiples.
It's good to me. If I'm an investor, I'm going to look at CASL before I look at EBITDA.
So I found that valuation to be a little different.
But yes, agree. Definitely.
And it's always like, how can we unload to the next person?
And I was going to say as someone who's been on the sell side, I think more often than I've been on the buy side, I was like biting my tongue to keep from trying to convince you that EBITDA really was the best metric to use for valuation.
But I'm not going to do that because I'll get back to those flashbacks.
We're somehow just...
You and I, it seems like we've different industries, but we've traveled a lot of the same roads.
So we have similar war stories around it.
And another thing that I think I'm going to be able to fully relate to, but I'd love to hear this because this is one of the articles that jumped out too, was your article from legacy to leadership, upgrading, accounting and FP &A and acquired entities.
So that's, from my experience, if you are in a private equity backed business and they're doing say a roll up, they're going to pick the lead dog that's going to be the roll up engine for this.
And you hope that that's the one that is the operationally excellent company so that as you bring these other companies in, we're going to shoehorn you in, and we're going to adopt the processes and the technologies and the software and everything that we're using in the main company.
But these companies that are coming in could just have nightmare systems and lack of data maturity and all that.
So tell me a little bit about that article in your experience there.
I think my experience is a lot of companies are run on QuickBooks.
I find that a lot of acquired companies, for instance, run on QuickBooks, which again, with all respect to QuickBooks, which is a lot of...
In terms of closing the period, there's just a lot of potential for errors and for booking things in the wrong period.
And for not what I...
I get very nervous when I go to a company and everything is held in QuickBooks.
And I think definitely, I think getting company on the new software package, on your coming in and getting them on your air peak, it can be a path.
Also, I find that a lot of these companies may have a bookkeeper who has been there for years, and they may not be at the level that you need someone to be.
So I always find the human component to be the most difficult when upgrading an acquired entity really.
What do you do with the legacy employees who may be...
Who are probably...
Many times are resistant to change, many times are wedded to their processes, are not open to change and open to learning new things.
And that's always a challenge because you want to help people, you don't want to lay off people, you don't want to create a headache, but a lot of the times you end up with people who are...
may have been there for a long time and are not going to be able to learn or change.
And many of those people, it could be just bookkeepers.
They may not be really at the level where you need to be as a divisional controller, a divisional manager.
So aside from remapping the chart of accounts, getting the inventory accounting done correctly, all that stuff, you're really...
Again, the human issue, I think, can be the most difficult, trying to figure out what to do with the existing staff.
Yeah. Because a lot of times in these acquisitions, it could be...
Maybe it's a founder -led company and maybe the founder was treating it more like a lifestyle company than in a growth environment.
And they kind of knew their finances and they really didn't see a difference between the tax accounting and no idea really of management accounting.
They're getting backward looking financials and all that.
And they don't... If they're treating it like a cost center, then, well, I don't need a full controller.
This bookkeeper is fine.
She goes through once a quarter and she guesses what account to put everything in.
And that's good enough for us.
And so if you're taking a company that you've acquired and trying to put them into the actual professional growth oriented company and all that, it's from the systems and the data that you have to work with to the people, it can be a challenge.
Absolutely. So one more that you did, and this is near and dear to my heart is your overview of FP &A tools.
So tell me a little bit about that and your ideas on the power of FP &A tools.
I don't know if I have a lot to add to FP &A tools.
You have a lot of people who are bigger experts than FP &A tools.
I think there's a lot of great FP &A tools.
But I think the key about FP &A tools is figuring out which one is right for your company, for your industry, for your business.
And I don't think there's one.
So I think my takeaway is there isn't one tool that's best for everybody.
It's really what's going to work for your needs.
And the second thing that I think is really important is understanding what the learning curve is because there are some great tools that may have a longer learning curve and or a longer implementation time.
So to me, I think the only thing I would say that I might be able to add is that really, it's not only picking the tool that's right for you is how does the implementation period work within your schedule and what is the learning curve going to take?
Meaning you may be better off with a not maybe better off with a tool that's not as powerful, may be easier to learn.
To me, I think that's really a challenge when picking the FP &A tool, meaning how much time do I have to implement?
The person who's going to be using this, do I want something that's easier for them to learn or do I want something that may be harder?
So I think there are a lot of considerations.
Yeah, and those are great points.
And I see so often you'll have...
I picture this as the CFO, maybe who's not really hands -on with what they do.
But they get sold on a piece of software.
They see some really slick salesperson comes in and they're like, if you buy this tool, it's going to solve all your problems.
And look at these charts and graphs and all this cool stuff it can do.
And then they buy the software and then try to shoehorn it into their system where really the best way to select software is figure out your process, figure out what you're trying to solve, and then pick software based on that.
Don't reverse it into, this magic software is going to solve our problem when you haven't even identified what problem you're trying to solve.
Well, we've gone through a lot on FP &A.
And since we talked about the worst budget experience, I don't want to leave people with PTSD from that.
I think now is a good opportunity to go the flip side of that.
And what would you say is the best achievement of yours in FP &A, a forecaster analysis, something that you did that you would give as an example in a job interview?
I think in a job interview, I think I created the Three Statement Forecasting Model Experience, which basically taking a P &L model, the detailed P &L models, and really converting them to balance sheet and cash flow.
And obviously that involves fairly complex P &L because it was different divisions.
So really, I think my achievement is really creating a rolling Three Statement Forecasting Model.
We can really tweak your cash forecasts and not just an intuitive inventory.
Obviously we have DSO, we have DPO, we have DBO, we also have recurring revenues.
So really, I think that's really been what I'm most proud of, really doing a three statement for a balance sheet P &L, cash flow integrated forecasting model, which I think is really, I would say, what I'm most proudest of.
Yeah, and that's no small feat.
I think of so many times where you have a plug and it's like, well, I better put another plug here.
Because it's so difficult to get to really nail that kind of the flow through between all three of them.
And it's so valuable to do it, but it is a lot of work.
So for you to have successfully pulled it off, that is definitely one for the books, and especially at a company the size of Experian too.
So it's not like you're doing it at the little mom and pop shoe store or whatever.
This is significant.
No, not at all. The last one was 60 hour weeks.
So I'm not sure when I go.
I don't want to go back to that.
Right. So well, there are a couple of boilerplate questions.
We are about coming up on time.
And I've got a question but I don't want to...
Well, I'm going to try to influence you, but you can go where you want to go with this.
One thing we always like to ask our guests, because we've talked so much on the work side, is what's something that not many people know about you that we can't find out online.
But in the intro, I referenced your moonlighting as a critic of theater and opera and ballet.
I'd love to hear more about that.
So I don't want to say you have to answer more about that.
If there's something more interesting, you'd rather talk about it.
I'm very happy. So it's my passion.
So I'm one of the...
There may be 30 reviewers, one of the 30 reviewers nationally for stageandcinema .com.
And I review opera, ballet, theater, jazz, classical music.
And I also travel internationally to see opera and theater.
I go to London, New York, going this summer to Germany just to an opera festival.
So I really, really love the performing art.
It really takes me some interesting places.
And I've also been lucky enough to meet a lot of actors.
And I've got to meet some of my idols, Judy Dench, Barbara Streisand, Liza Minnelli.
So my house does have a lot of...
There are a lot of photos in my house of me with Liza Minnelli, Barbara Streisand, Judy Dench, and many, many others.
So one of the nice things about being a critic is getting invited to opening night parties.
So you do meet a lot of celebrities on opening nights.
So I have to say that's been a nice perk to drink and eat for free with celebrities.
Most recently, I met Maya Rudolph at an opening night party and she's playing Kamala on Saturday Night Live.
So I have to say that's a nice perk of the trade, to meet people that you admire, admire their art.
I'm not interested in them.
The celebrities, the second celebrity, they admire them as actors, as artists, and really not...
I'm not interested in meeting the artists, the artists, musicians, etc.
So that's been a very fulfilling part of my non -finance life.
That's great. And it's so interesting, the more FP &A and accounting folks that I talked to, because you think there's this idea that if you're doing numbers all day, it's like a right and a left brain thing.
Just everything is very numbers oriented, black and white, and there's not this creative side.
But more often than not, it's pretty rare that I find someone that is just a walking computer.
That's not anything against the walking computers because some of them are the best accountants that I've ever seen.
They just have that detail for number.
But I think for the complete package, it's interesting to me how many people...
So the fact that you're a critic and that you're writing and you're expressing yourself that way versus the numbers.
But I think the two really blend.
And we talk a lot in recent years about business partnering and the power of storytelling.
And you can't just be a reporter of the numbers.
You have to build a narrative around the numbers.
So to me, those don't seem at odds.
They seem like they're perfectly complimentary that make you better at your day job.
Absolutely. And you have to write them, you have to write memos, you have to write emails, and you have to also communicate, and you have to also choose your words properly.
Yeah. I'm not a great politician.
So I've never been good at playing office politics.
So maybe I hide sometimes behind my words, try to put things in emails or memos rather than have an unpleasant conversation, or try to navigate office politics.
So I find that my escape is into the written word.
One last question and we ask everyone this too.
And we've had such a broad range of guests.
I'm always curious to hear the answer on this.
What is your favorite Excel function and why?
Well, maybe it's two functions.
It really would be index, match.
But it's really two functions, index and match.
And I think I like index and match because unlike VLOOKUP, you can look in any direction right to left, left to right.
Unlike VLOOKUP, it can look up values based on any column in a table, not just the first column like in VLOOKUP.
It's also faster, it's more efficient for large data sets.
It works faster than VLOOKUP.
It's also less run to errors because when you insert, delete columns, it works with dynamic column references.
And it really can handle complex scenarios.
You have to look up values across rows and columns.
So I think index and match is probably my favorite function, or maybe I'm cheating because it's really two functions.
So it's funny. Index, match was our leader for a long time.
And I think index, it probably still is our leader for favorite function.
However, Power Query is people are talking more and more about that people who are using Power Query are saying it's like index, match on steroids and being able to work with bigger data sets and really expand the use of it.
So I'll be curious, especially now as Copilot in Excel gets stronger and as Copilot is using integrated with Python now, I'm going to be curious to see where it goes.
But index, match, I think is our historical winner for all the exact reasons that you said.
Yes. And I'm just in the beginning, I'm just starting to really explore Python and Copilot.
So I'm still in the learning stages and looking forward to really utilizing it and saving a lot of time.
But I'm really looking forward to the wonderful AI features that we can use with Excel.
Yeah. Likewise. Well, Michael, it's been great having you on the show.
I guess just before we let you go, though, if our listeners want to connect with you online, follow your work, what's the best way for your professional work and the critic work as well?
Okay, the critic work is stage, www .stageandcinema .com.
But more seborrantly, you can look for me on LinkedIn as Michael M.
Lamb and Carney, or you can put LinkedIn .com slash I N slash interim controller one word.
Gotcha. Cool. Well, we'll put that in the show notes too.
Yeah. Please. I encourage people to follow me.
I try to post five articles a week, which is a lot of work, but I really love to write.
So I do spend the time and put out articles.
I write a lot of articles about M &A, FB &A, strategy, writing a little bit about AI in Excel.
But again, I'm writing, I'm learning as I'm writing, so I'm not an expert.
And I encourage everybody to follow me on LinkedIn.
Well, Michael, thank you so much for coming on.
Thank you so much. I really appreciate your time.
