Scoular Shares Their Finance Journey with CFO Thought Leadership Podcast

Prophix Symbol 1 Col Spot 185 01Prophix Jun 8, 2021, 7:24:00 AM
Wherever you are on your finance career path, now is the perfect time to accelerate. Inspiring and instructive success stories can help finance leaders understand the next steps to take in their career, wherever you are in your journey. If you're aiming for the CFO and beyond, you’ll want to hear Andy Kenny, CFO at Scoular, discuss his journey to CFO and how he transformed his FP&A processes with Prophix. We’ve included a portion of Andy's story, which he shared on the CFO Thought Leader podcast, hosted by Jack Sweeney, below. You can listen to the full episode on the CFO Thought Leadership podcast on Apple Music or on their website.

About Scoular

Jack: Andy, tell me about Scoular. I don’t know an awful lot about the company, and would love to hear from you, what does your company do? Tell us about it. Andy: Yeah, at Scoular we’re really focused on creating safe and reliable supply chain solutions for feed and food customers all around the world. We’re headquartered in Omaha, Nebraska and we are one of the hundred largest private companies in the U.S. This year, we’ll have revenues well over five billion U.S. dollars. And we have three major operating divisions focused on grain, feed, and food. What sets us apart in the market are the same things that attracted me to Scoular. The first one is that we’re employee-owned and so, this really drives engagement and allows us to be focused on long-term growth. This culture drives the entrepreneurial spirit and allows us to have empowered decision-making across everything we do, and that makes us agile and extremely responsive. From the CFO perspective, it’s been really refreshing to not have to think quarter to quarter. Now, I can think in terms of years or decades because we’re so focused on long-term value creation. The second thing that attracted me to Scoular is growth. At Scoular, we have a tremendous commitment to growing our business, especially in the core agricultural space. We want to grow in adjacent spaces as well, but we’re really committed to that agricultural base. And right now, we’re undertaking an international expansion. We want to make sure we can grow to better serve our customers and farmers because we have that long-term view. This is important to us. It’s their success as well, not just ours. We believe this so much so that our company’s tagline is, “let’s get growing.” And the third point isn’t as much about Scoular but about what drew me to it and that is being a stand-alone CFO. So, I say that I’m allowed at least one selfish reason and I was really excited about having the opportunity to be the co-pilot of a company and run the entire finance organization. And, to steer the strategic future of such a historic company like Scoular that’s been around for a hundred and twenty-eight years.

Industry-Specific Metrics & Prophix

Jack: Interesting. So, help us understand top-of-mind metrics for your industry. How your company performs, and how it measures itself. What would those be? Andy: Yeah, as I mentioned, we’re laser-focused on efficient growth. We have a target to have an annual average earnings growth of at least 15 percent. And so, with our focus on long-term growth, it’s important to track our progress against our annual budget, but also how effectively we are deploying capital at the rate we’re targeting. We recently put in Prophix and we’re using that tool to do all our planning, including our five-year long-range plan. So, having a tool like that is great to be able to track our actual progress. Having all our data in one system, instead of having it spread across the world in various spreadsheets, is really valuable. In terms of short-term metrics and more weekly metrics, a big item for us in the agricultural space is watching our product margins and how those are going. And we’re also looking at that in the context of our profitability, as it relates to the amount of working capital that we’re utilizing to make those sorts of profits. Jack: When you first arrived at Scoular, I’m curious whether you felt as if you had the visibility you needed, and whether certain numbers showed up a week too late for your appetite for information, or a month too late. You mentioned you adopted Prophix; was there an itch you were trying to scratch? Andy: When I first came into Scoular, I really focused on listening and learning, so I could lead. And what I learned through all that was, there was nothing wrong with the way the finance department worked in the past. However, there was no way the finance team could maintain the status quo and adequately serve the future needs of the company we’re building, you know? And Scoular would not be able to grow the way we wanted unless the finance team underwent a transformation. And as the finance department, we played such a key role in enabling that type of growth. A big part of our finance foundation was being able to partner with Prophix to put in a leading Corporate Performance Management (CPM) software to allow us to efficiently advance our finance capabilities and scale this across the enterprise. We not only adopted Prophix, but we also stood up as an FP&A group and brought in a mix of talent from across the industry. On the same day we signed with Prophix, I had three people in the FP&A team starting. So, we were ready to truly hit the ground running. Jack: How did FP&A work before your arrival? Was it something team members experimented with every now and again? Or were there no FP&A processes in place? Andy: The organization lightly dabbled in aspects of FP&A in the past but had never truly committed to it. And so, I brought in a global director of FP&A who reports directly to me. I put in a team of FP&A under that, an FP&A lead for each of the divisions. So, we had that as well as an overall corporate FP&A leader. And so, we built that out because I knew it was important for the business to fully embrace FP&A and have it embedded in each of the divisions.

Non-Financial Metrics

Jack: What non-financial data are you trying to look at more consistently and use strategically? And maybe there are different types, but does anything fit the bill when I ask you about non-financial data that you as a CFO pay closer attention to? Andy: Yeah, for us there are two interesting areas. The first is just basic bread and butter for the agricultural and food industry and that’s commodity position. So, this is if you’re long- or short-core. This has been and will always be key to managing our risk, and is something that we’ve done for a long, long time. And looking at that data and capturing it in a way that we can use it to make forward-looking predictions. Another developing piece of data for our business is around transportation and how we can digitalize aspects of transportation. At Scoular, we developed an application to make the entire transportation process paperless. And with that, you’re able to have almost instantaneous payments right to the trucking organizations, and to the truckers. You have real-time tracking of where your loads are at. And not only does this provide us with real-time information and efficiencies, but it provides great data insights on shipments and details with the carriers, and it’s been fantastic to have all of that. And so, you could imagine everything you used to be able to have on a paper ticket we can now slice and dice digitally. You know, I’m really proud. I’ll take this opportunity to say I’m proud of our team and the role that Scoular is playing across our entire industry. We’re really pushing hard to drive innovation and leave inefficiency in the dust. Jack: Walk me through your first week or first quarter as CFO of Scoular. If you could back in time and tell yourself something, what piece of advice would give? Andy: You know if I could go back to that first week, I think the biggest piece of advice would have been – don’t wait. I was extremely sensitive to the different cultures, being somebody coming from a very large publicly traded company into a private organization. My style in the past has been to move extremely quick and fast. And I was probably overly conscious of that, and I waited longer than I traditionally would have to make changes and to push things forward. And of course, at that time, I didn’t know that I’d only have one year in the office before moving to more of a remote environment as well. And so, I think that’s probably the biggest thing is to stay true to what drove my success in the past, and just go with it. Listen to the full episode, Making Relationships Matter, on Apple Music or on the CFO Thought Leader website.
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