Understanding SRT

 

Anderson Williams: So, before that you were in part of the Shore Resource Team. So, will you just describe a little bit about what the Shore Resource Team is before we come back to Hueman?

 

Brandon Coan: Shore Resource Team is the operational consulting arm at Shore.

 

So in that sense, fully bifurcated from Hueman, from the investment team where we will work side by side boots on the ground with Shore portfolio companies to help them execute on certain initiatives that will ultimately help them grow and scale over time.

 

Anderson Williams: Give me a sense about what that looks like. So, when you were on the Shore Resource Team prior to becoming a CFO, what were some of the projects you worked on and maybe particularly that you feel like prepared you for the CFO seat?

 

Brandon Coan: It's a great question. During my time on the Shore Resource Team, I worked on a lot of different projects, pretty much covering the full gamut of what the Shore Resource Team has to offer.

 

So, you have your bread and butter, which is the 100-day Plan, which is at the onset of a partnership with the portfolio company, Shore Resource Team will spend the first a hundred days working side by side with management to help essentially onboard them to the private equity way or the short capital way.

 

So got a lot of great experience working on a 100-day Plans, but where I really learned. or felt that I learned the most was having the opportunity on two separate occasions to sit as the interim CFO for some of Shore Capital's portfolio companies. So, for six to nine months, I had the opportunity across two different businesses to actually sit in the CFO seat, which is where you have no choice but to learn whether that's trial by fire or not, you learn. And that really set me up well for, I believe where I am today.

 

Anderson Williams: Say more about that. I mean, it does seem like you're going into a pretty complicated situation. I'm sure for different reasons you're stepping into an interim role, but you're stepping into an existing team. They're either looking for someone permanent or have lost someone permanent.

 

Talk a little bit more about that transition into interim role.

 

Brandon Coan: So, my first experience, which was early on in my time at Shore, the company that I was assisting with actually had an interim CFO at that time, but this individual was leaving for a different role, and so they were having a gap period where they needed someone to step in and fill that gap.

 

Anderson Williams: So, an interim interim.

 

Brandon Coan: That's exactly what.

 

Anderson Williams: Technically the interim interim.

 

Brandon Coan: Yeah. Yeah. Assistant to the assistant regional manager. So, I had the opportunity to work with the business for about six weeks prior to the existing interim CFO departing. And so, during those six weeks, I developed a really strong relationship with the CEO and the COO and the rest of the accounting and finance team.

 

And it just made sense to have me plug in. And so, after six weeks of working with the business, I then stepped into that seat and just had to learn as I went. And fortunately, I was able to partner with the executive team at that company where they showed me the ropes and gave me the confidence to assume that CFO role.

 

Anderson Williams: So, what were you doing before you came to Shore and joined the SRT?

 

Brandon Coan: Before I joined Shore, I had spent six years at EY. About four of those years, I was an auditor. I was actually auditing private equity funds. So not too dissimilar from Shore, just different size. And so, about four years of the six as an auditor, and the last two years I spent as a consultant working in their financial accounting and advisory services practice.

 

So, a lot of wide-ranging projects, but my specialty became IPO readiness. So essentially helping companies build out a back office and prepare to go public as well as writing financial statements.

 

I think auditing private equity helped me understand number one, where the dollars go and how they go. And it also helped me understand the strategy at private equity funds and auditing certain investments and looking at their strategy at the portfolio companies that they are investing in, really provided a good baseline understanding for me of what private equity is. And then starting at Shore and being able to take that skill set maybe a little bit from my financial accounting and advisory days as well on the scale of going public and then taking both of those pieces, which helped me develop a skillset that I could then bring to Shore.

 

And while it's a great starting point, as I said earlier, you really can't learn as much as you do without actually being out on the floor. As an operator or in the interim CFO scenario, sitting in the actual seat.

 

Anderson Williams: And now that you're on the portfolio company side and experiencing that side of this conversation and this story, what have you learned being inside a portfolio company that's additive or different from, or just compared to the experience of working with them from the more consultative, from the more project-based approach?

 

Brandon Coan: There's no scope of work in the CFO seat now. And if there was, there would be an everlasting scope creep that just wouldn't work for a consulting assignment. And to me, I love that every day is different. And the really cool thing about my current role is I had the opportunity to actually do the 100-day Plan for Hueman and get to know the team, the current infrastructure that existed, the business model, the people, the culture, and to be able to see it and help.

 

Build something as part of the 100-day Plan. And then ultimately now today, almost 18 months later, I now see a lot of those things still in practice. And to me, that's that lasting impact that I find to be so cool that oftentimes as a consultant, you don't get to see through.

 

Anderson Williams: Yeah, it's really kind of amazing to think about it from that perspective that now you're in this seat going, this is still the infrastructure we built.

 

Back then, and it is still scaling with this much larger company that's completed acquisitions and done all the things that it's done since that time. That's a pretty extraordinary way to see your work that I suspect not everybody gets to see.

 

Brandon Coan: Yeah. And it's very rewarding to see. And especially when my team, they are the ones that tell me this tool we put into place 12 months ago.

 

We just closed on our first acquisition a couple of weeks ago, and it's seamlessly transitioned. And we've integrated the company we just acquired onto this system we put into place 12 months ago, or this forecasting model we put together 18 months ago in just a matter of days. And so, to me, to see that all the way through is something I haven't had a chance to do really in my career.

 

And so, to be able to do that less than a year as the full-time CFO at Hueman has been special.

 

Anderson Williams: That is awesome. How did that work? Just if somebody's listening and thinking about the SRT as a potential career opportunity for them and understanding the growth that happens and the kinds of things you work on, how did it happen for you to then become the CFO of Hueman? What does that process look like in terms of selection? What did it look like for you?

 

Brandon Coan: So, for the Shore Resource Team, there typically is an allotted period of time that you are essentially required to work on the Shore Resource Team. It's kind of like college football, NFL draft eligibility, where you're not eligible until a certain point of time in college.

 

And so, for me, when I started the 100-day Plan was when I hit that period. I became eligible. And so, in my specific scenario, we had just finished a board meeting. We were out in Jacksonville. Which is where my company is headquartered. I was sitting with my fellow SRT team member on a bus ride heading to the players golf tournament and the CEO of the business was sitting in the row in front of us on the bus and turned around to me and said, you know, Brandon, I'd really like to have a conversation with you about being our next CFO.

 

And to me, number one, there's nothing more flattering than that. Number two, my counterpart on the Shore Resource Team, I want to say it was his third month at Shore. So, you get to see in real time that this is real. You can go be a portfolio company executive. And three, to have that offer come from the CEO at the portfolio company really showed me that he was valuing my work.

 

And so rather than it be this Shore program, which it is, right? I came from Shore Capital. The goal is to go be a CFO. But to have that offer come from the business was, to me, super special. And so, my interview process was my 100-day Plan. And I think that's really how I approached every project I did when I was on the Shore Resource Team was, I am an extension of management team. I am bifurcated from the investment team. And when I am on site working with you guys, that's it.

 

Anderson Williams: When you think about that initial work with a company that hasn't worked with SRT before, and maybe they're not that familiar, particularly at a 100-day Plan stage with Shore and what it means to be a part of Shore now.

 

How do you go about building the trust and the rapport it requires to really get in there and do the work truly as a team?

 

Brandon Coan: Ultimately, it really is just showing that you are a trustworthy person. It's building that relationship. And it's making sure that the portfolio company knows that you have their best interest at heart and that you are one with their management team.

 

You know, you are in the trenches with them to the extent you need to be. And once you spend that first week on site with the management team, that's, at least for me, that was always the best way to build relationships and that rapport. You know, the first night out there, you present, you go out to, dinner and drinks, you share your personal life with them, you know, you really are working side by side with them.

 

And that's why I've always described the SRT as bifurcated from the investment team because you truly are an operator working side by side with the portfolio company. But again, you know, it is a tough line and making sure you stay on the right side of it is super important because with the trust from the portfolio company and the management team, you can do a lot more work together, which ultimately aligns incentives for everybody.

What I Wish I Knew​

 

Anderson Williams: Now that you're in the CFO seat, what do you wish you knew back when you started with SRT that you know now?

 

Brandon Coan: I probably wish I would have known how difficult it can be to sit in the CFO seat. You know, the interim CFO experience I had was without a doubt the reason why I felt so confident coming into this role.

 

But there is a lot more that happens. In this role that you experience as a full-time CFO rather than that interim position where at the end of the day, I still do to an extent report back to shore. So, I think having a greater appreciation for all of the work that is required and not only just for a CFO, but also the whole management team. And there is a lot of stress that comes along with the role, but it's all exciting. It's all good stuff.

 

Anderson Williams: How's the role different than what you expected?

 

Brandon Coan: I think the biggest thing that I'm learning in my role is, if I just stick to the finance realm or my finance lane, I will be an underserving CFO. And so, as CFO, to me, financial reporting, modeling, budgeting, forecasting, audit and tax, those are all table stakes.

 

It's really the operations and strategy of CFOs. The business that I need to understand fully, and then I need to tie it back to the financial landscape of the company. And so, to me, that's been the biggest learning point is I will not be the best CFO that I can be if I only stick in my finance lane.

Personal Growth

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Anderson Williams: So how have you invested in growing in that space and more of a strategic and operational perspective? If those other things are table stakes, what have you done to keep up so that you live into that role as you've found it?

 

Brandon Coan: I'm spending a lot of time with department leaders, whether that's our chief growth officer, our president of operations, my CEO, and also our RPO leaders and our sales team, our marketing team.

 

My first six months at the company, while I knew the people, the culture, the model, I didn't have as good of a grasp on the strategy and the day-to-day operations. And that's what my main focus has been on. And the team that I work with at Hueman is just so great. And they're very gracious with their time.

 

So, getting with them, understanding what they're thinking about every day, you know, daily, weekly, biweekly, monthly phone calls and cross departmental meetings. To make sure that I know as much as I can to be the best CFO to everybody. You know, my goal is to be a strategic partner to everybody in the business, not just my Accounting and Finance Team or IT and BI Teams.

 

Anderson Williams: I think it's incredible insight that only comes from sitting in that position. And if you were talking to someone who's a part of SRT or someone who is considering SRT as a potential career opportunity, what advice would you give them for approaching their growth to prepare for this seat? So how do they take the project-based work and the playbook-based work and develop the tools that are foundational to the toolkit and at the same time, grow in the areas you defined that are behind this listening and understanding the business from all angles and the operations and the sales and all of those things. What advice would you give for rounding out what you've found in the position in terms of their learning?

 

Brandon Coan: I think my advice would be to go beyond the playbook. So, the playbook has the fundamentals, the foundation for the private equity onboarding. But going outside of the playbook, meaning, I used to always say the first 50 days of a 100-day Plan is the financial package that you build, the cash flow forecast, helping the team look into different types of KPIs for them to report out on weekly.

 

And then the second 50 days is the fun stuff. And that's where you get to sit with the sales team and talk about their pricing model or working with HR to understand why turnover is what it is, and maybe tracking things differently. It's going out to the factory floor and working on a production run from five in the morning to 7am to understand what those guys and girls are doing every day.

 

It's really seeing, I hate this phrase, it's really seeing how the sausage is made. That I think is what will help you really understand the full picture of a company. And if you just stick in your finance lane, I think you're going to be doing yourself and your company a disservice.

 

Anderson Williams: Yeah. I mean, you're learning to do the technical transactional work, but I think if I played that back to you, it's being really intentional about moving beyond the transactional and really paying attention to the people and the impact and the broader story, not just the deliverable, so to speak.

 

Brandon Coan: That's right. And not only the scope of work, right? So going beyond the playbook. But then also take it a step further and go sit with people and just meet them and talk to them. I mean, those relationships, you know, organically, you learn how they started their company, why they did it. You learn about not only the business, but their family, their interests, and there's just a lot more to take in and gives you a better perspective on running a company and not just working in a company.

 

Anderson Williams: We were talking before, Brandon, about a couple of phrases that you found yourself using in your first year as a CFO. Wondering if you'll just share those with the audience and tell us what they mean.

 

Brandon Coan: Yeah, so I'll start with the nerdier of the two, which is, you can't make payroll with adjusted EBITDA.

 

Anderson Williams: CFO jokes.

 

Brandon Coan: That's a CFO joke. And that's a reminder to my team and our team of operators that while Identifying adjustments or add-backs is great. It's not cash in our pockets. So, it's a friendly reminder that cash is king, and that will always be the case.

 

And then my second favorite quote is, don’t wallpaper the wallpaper. So, what I mean by that is, typically when you go to remodel your home and you see this funky wallpaper in your bathroom and you think to yourself, well, I better paint it. take this down. And so, you start to rip it out and then you see, wait a second, below the checkered wallpaper now are stripes and you go to rip that out and you realize that there are just endless layers of wallpaper because it's way easier to just put on new wallpaper rather than replace the old entirely.

 

And so, I try to emphasize that to my Accounting and Finance Team and my BI Team. So, for example, we just closed on our first acquisition and we're obviously running hot, we're moving fast, and not only do we have this acquisition that we now have to account for and report out on, we also have the base business.

 

And so rather than moving too fast just to get report out or the books closed, or numbers finalized, don't wallpaper the wallpaper. Let's do the right thing and the best job we can to make sure that everything we're doing sets us up best for the future so that when we do another acquisition, we don't just layer on more wallpaper.

 

We're actually set up for success and eventually we don't have to ever put in new wallpaper.

 

Anderson Williams: I love it. So, Brandon, if you had to summarize your biggest learning curve as a CFO, what's your biggest learning curve?

 

Brandon Coan: I think the biggest learning curve for me is handling both the known unknowns and the unknown unknowns.

 

And what I mean by that is knowing that something will go wrong. But not knowing what that is or when it is, and then being agile enough to adapt on the fly and have that initial instinct of, all right, here's how we adjust. Here's how we keep moving forward. I think that's something you don't really know until it happens to you, or until you're in the seat, the buck stops with you.

 

And so, as a consultant, you don't really have that much falling under your lap. That's 100 percent your responsibility. And so, for me, it's being agile in those times of uncertainty. And every day is different. And I love that. I love every day of being a new challenge. And I think for the most part, it's been a successful start and transition into this role.

 

And even with the known unknowns or unknown unknowns, as they come up working together with my team, knowing it's not just 100 percent my responsibility, whereas maybe three months in I saw something happen. One of those unknown unknowns. And got nervous and thought, wow, I need to come up with a solution right away.

 

Just knowing that I have a team of operators around me, working side by side with me there to problem solve. I think it took me a little bit to realize that. But even still, I think to this day, that's got to be my biggest challenge so far is just being able to adapt on the fly and knowing that things aren't going to go according to plan.

 

And in fact, despite being a CFO, I often say a budget is meant to be wrong. And so that's what I'm learning to adapt on the fly to is how to adjust when you see that. It's not going to plan.