Eric Kutcher, senior partner and CFO at McKinsey, did not have the most traditional path to a financial leadership role. That said, having begun his career as an engineer, Kutcher brings an analytical problem-solving perspective that is of great value to today’s finance chief. Kutcher’s inherent curiosity and constant questioning “enabled me to…push [my team] to think a little bit outside the box. It pushes them to say, ‘I get that’s how I was always taught to think about it, but why do it that way? Is there another way to think about it?’” Kutcher says.
In this episode of Secrets of Rockstar CFOs, Kutcher joins Jack McCullough, president and founder of the CFO Leadership Council, to discuss the importance of asking “why not,” the game-changing aspects of AI, and McKinsey’s role in sustainability and gender equality measures. Listen by clicking below. The Q&A, lightly edited and trimmed for clarity, follows.
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Listen to the podcast here
We have a fantastic guest. Eric Kutcher is the CFO and senior partner from a little boutique consulting firm called McKinsey. Eric, welcome to the Secrets of Rockstar CFOs.
It’s great to be here. With that title, I’m not sure I deserve it.
I know McKinsey is a household name, at least in the households of the people likely to be tuning in to this. Maybe you can give the 10,000-foot overview.
McKinsey is an institution, a firm that acts as a private partnership that’s been around for under 100 years. In many ways, we consider ourselves to be the advisors and partners of world-leading institutions. With those institutions come their leaders, and we help them do everything from a vision for where those organizations can go to how we enable that to happen. Setting that bold ambition and then achieving it. That’s where we spend most of our time; it’s true for governments, it’s true for the private sector, it’s true for some NGOs. With the combination of those collectively, we hope to deliver an impact that betters the world.
That’s certainly an awesome mission. How long have you worked at McKinsey?
Believe it or not, I’m coming up on 27 years, which I don’t quite understand, given I don’t think of myself as that old yet, but it’s been 27 years this September.
You started when you were six, so you’re only 33.
That must have been the secret to it.
You’re a prodigious young man at six. Anyway, joking about that, but I always like to know, where did you grow up, Eric?
I was born in New York. Technically, it was in the Bronx. I spent the first few years of my life in Westchester after that. I spent most of my life in Connecticut. It was on the East Coast till 12 years ago, where rather unexpectedly and a bit unwittingly I ended up moving to California with the family, and it’s been a great ride ever since.
I haven’t known a lot of people who have regretted the trek out that way.
The weather is certainly very nice and the activities in the neighboring area are. It’s been a wonderful experience.
I’m from the Boston area, even the most hardened people from the northeast when they find themselves in south Florida or southern California or wherever, they go kicking and screaming. After 12 months of weather that never dips below 50 degrees, it’s like, “This isn’t so bad after all.”
It is so true. The sun brings a lot of smiles.
Did you grow up in a big family?
I was the oldest of four kids. I’ve got a sister who’s two years younger than me, a brother who’s six years younger, and another sister who’s about twelve years younger. We grew up for all intents and purposes in Connecticut. One still lives in Connecticut on the same street I grew up on. One is down in Charlotte, North Carolina, and the other is living in the greater DC area.
You spread out a little bit, but it gives you destinations around the holidays. Where did you go to college?
I went to Cornell University. I did an undergraduate in material science and engineering. I spent a little bit of time shortly thereafter working at Intel in their process engineering, making Pentium. It was the ‘60s at the time. I dated myself. I stuck around there for an extra year and did a master’s in what were operations research and industrial engineering with a certificate in what was called financial engineering, which was a combination of the business school and engineering school.
When I went to Sloan, they had the same type of thing. Although I was a more traditional MBA.
I always get a little hesitant talking about financial engineering because it feels like a somewhat dirty word, but it was done with all the greatest intent.
I wasn’t aware it was a dirty word. I didn’t study it, but a lot of my friends did for sure. You’re amongst the first of my guests whose educational career was more in the engineering or technical side. Did you think you would have a 40-year career in the sciences or did you always think that there might be a path to the business world?
For most of my life, my expectation was I was going to become a doctor. My father was a surgeon. I spent my entire life around doctors and surgeons and was quite convinced I was going to be an orthopedic surgeon. I had lots of injuries as a kid, like lots and lots of injuries, and spent a lot of time at the orthopod’s office. One of them was the U.S. Ski Team doctor. I’m a big-time skier. I thought that’s what I would do. I’d follow in his footsteps and become the U.S. Ski Team doctor one day.
The night before taking the MCATS, I got violently ill, went back to bed, got violently ill again, got up that morning, went to the exam, and got violently ill during the MCAT exam. They threw me out. Once I was out of the MCAT, I said, “What do I do now?” I didn’t have the opportunity to go to med school that next year. I spent that summer reflecting and saying, “What I want to do is go into business.” That’s how I ended up making the transition from the engineering science world into business.
That’s a fascinating story and it’s so weird you happened to get sick on those two days. It affected your entire life.
It changed my life. In some ways, it’s those unexpected things that end up being incredibly fortuitous. The ability to bounce around and allow that. As someone said to me, “You have to go on the journey.” That was a journey I certainly didn’t expect. We were going down the river, going in one direction, but the tributary caught us and took us to another place.
It seems like it worked out even if it wasn’t the original plan, but you mentioned you had a lot of injuries and I know you were an accomplished athlete in your youth. Perhaps you still are. You said you did some skiing and I understand you played a little baseball along the way, too.
Little baseball, and little golf but I had a lot of injuries. Between second grade and when I graduated high school, I’ve broken my nose six times. I was more of the rugged child than I was the studious one.
I have a friend who’s a professional boxer and I don’t think that he broke his nose six times.
I’m not sure what to make of that. Maybe I took more shots in the face than I was supposed to.
You said you golf and you broke your nose six times. I’m thinking of Rodney Dangerfield and Caddyshack when he hit the ball that bounced off the tree and it hit him.
I broke it playing basketball and playing football. I was a catcher. I played the places on most sports where you were more likely to get hurt than not. Golf, I always played, but I didn’t get serious about it until a little bit later.
Being a catcher in baseball is a dangerous thing. I want to get back to a little about your professional path because it’s increasingly common, but it’s certainly not common for an engineer to eventually become a CFO. How did your experience at Intel and then early within McKinsey, prep you for this role?
I can’t say that my early days at Intel prepped me. It was a very short stint that I spent there. I do think my engineering background was helpful. It taught me to be both analytical about the problem and take a view of different sides of the problem to be able to break it down. I remember one of the things that I learned most when it came to programming, which we did when I was in university, you have to break the problem down into its components. That was super helpful.
To be honest, it’s always one of those things where I feel a little bit guilty, because you’ll feel like you’re always unqualified to play the role; I was not the CPA, I was not the one who went to business school, and took lots of corporate finance classes. I learned a lot of that on the job. By the way, as a consultant, you do get a fair bit of exposure. I benefited from having a few remarkable mentors who gave me opportunities in and around the finance world.
I had one who was the CFO of the firm at the time. He’s now one of the Fed chairs. Every time I’d ask a question, he would take the time to engage me in that question and so it taught me a lot along the way. As a result, he ended up getting me on a committee that oversees the compensation of the firm early on. That is one of the most complex things because you’re dealing with 62 countries and different tax regimes. You start to learn a little bit more about the intricacies of it. Given what we do, that is the largest expense bucket. You’re seeing it now across that, and you start to get into how the behavioral economics work, the incentive systems, you start to get your head around that.
His successor ended up being also a great mentor. He took the time, especially as I joined the board, to engage me from the finance committee. He came to me and asked for advice or perspectives, and that level of willingness to engage invited me into the conversation in a way that he didn’t have to, and his predecessor didn’t have to, but it piqued my interest. It gave me insight, but it was their patience that made the difference.
It’s interesting because you may know that I wrote a book called Secrets of Rockstar CFOs for which this podcast was named. I interviewed 40-something good CFOs for the book. About all of them had an important mentor at some point in their career. It sounds like you’re doing that too or you’ve had that benefit as well.
I have benefited from probably a handful of real mentors and sponsors, like true mentors and sponsors. Those were two that were tremendous for me. I’ve had others who were less in the finance world, but taught me the ropes, and taught me how to run. One taught me how to write better, and he did it by showing, which I thought was powerful, in retrospect more so than in the moment. But I would write something, and he would go into Microsoft Word, and he would do the track changes so I could see his thought process.
It was very different than most other mentors, who would ask questions but never actually do the hard work of showing. I learned so much by watching and experimenting and quickly went back and forth on what he was trying to show because it forced me to get in his shoes and his mind, and then it forced me to ask myself why wasn’t I doing it. It was a very powerful way to teach.
It sure sounds like it. Now that you’re the grizzled veteran, are you actively mentoring any other young professionals in McKinsey or maybe even outside of McKinsey? I would guess you’re a very coveted mentor.
What I would say is I probably could do a better job, any one of us probably can. I try. I don’t know that I’m always as successful. I try to learn some of the lessons that looking back my mentors did for me, which was a lot about time and care and creating opportunities for others to get experience. I do try to do that. I also let people make some mistakes but never let them make the mistakes that are so great. I try to do that for some folks. Whether I am sought after or not, I’ll leave that to others to decide, but I certainly try to be as helpful as I can to a broad set of colleagues who I care a lot about.
That’s the name of the game. One of the questions that often comes up is to be an effective CFO, CPA versus MBA. I’ll ask you that with a twist because engineering and technical people have a huge advantage, they’re natural problem solvers, which the modern CFO job, that’s a lot of it. What would you recommend to a young person if they are in a world where they could only pick one, CPA, MBA or more of a scientific type of background to start?
It’s completely unfair for me to comment on CPA or MBA because I have neither. At some level, I have to choose C because it would be wrong for me to choose A or B, given that I didn’t go down that path. What I love about my scientific and engineering backgrounds is that I have a natural orientation to problem-solving.
It is a little bit of what an engineer does as I started with earlier. That forces me to ask a series of questions that I wouldn’t ordinarily ask. As a result of not having a CPA or a business degree per se, some could argue that I’ve built that business degree overtime at the firm. It forces me to always surround myself with people who are much more technically proficient than I am or ever will be.
I’m sure I drive many of my team crazy because I am constantly asking questions or trying to understand a component that I may not be as educated on, but I’ve now begun to get a bit of comfort around it. In doing so, I think what that has enabled me to do is to push them to think a little bit outside the box. It pushes them to say, “I get that’s how I was always taught to think about it, but why do it that way? Is there another way to think about it?”
In some ways, having that problem-solving [ability] has been super valuable to me. It has also kept me personally a little bit outside of my comfort zone because I have always felt am I adequately trained to be in the role that I’m in. I’m sure there are plenty of my partners who would say no, but on balance, I’ve gotten most of those components. But it forces me to always lead and ask more questions than I might’ve done in an area in which I had more expertise.
Someone told me at a young age that the second best question a person can ask is why, because it clarifies and you understand why you’re doing it, but the best question is why not? Because it opens up possibilities. Why can’t we, why do we have to do it the old-school way? I’m guessing even if you never thought of it explicitly like that, I bet you have that side to you.
It really resonates. I’m thinking back to different times in my leadership journey when I’ve asked the question of why not. The willingness to open the aperture due to that question is way more, even than the other question of why. It is quite powerful to see what happens when you challenge someone to say, “Okay, why can’t we do this?” They have to open their mind to say, “Is there a reason we can’t do that or not?” There were also times when I’ve been asked why not. It forces me to open the aperture. I love this notion. I love it as an opening question, at least from a problem-solving perspective.
It makes a lot of sense. I want to talk a little bit about modern CFOs and modern financial leadership. A lot of your research focuses on the role of technology and how empowering it is for financial leaders in terms of sustainable and inclusive growth. Why don’t you talk a little about how technology is changing the game?
I start at a very macro level on this one. The very macro level is if you look at the world and the population and population growth, and then you say, “How do we get to GDP growth?” You have to get productivity. It is almost impossible for us to deliver sustainable, inclusive growth that requires some level of GDP growth that creates a more inclusive economy.
You can’t do that without technology. We can’t get productivity without technology, in my humble view. Some of what we have gotten in the past with earlier incarnations or iterations of technology have been doing more with less, but not necessarily as best we could. I am quite positive about the way we will use AI. I think that is the broader definition of AI, not the narrow one.
I have been amazed to see already things that you can do with technology that you couldn’t do before and some things are pure productivity. You can scan for ports and check for signals that lead to areas where people might not be properly expensing things. That’s great, but it’s not changing business. I look at the insights you get out of some of the AI predicting where we are likely to see a shortfall in the particular work we are doing with clients or being able to predict where we are likely to introduce a client or several clients on a particular topic.
The ability to use that information is quite game-changing. Even things like being able to look and say, “What are the competitors doing?” It’s hard to be able to do that, but by pulling together some generative AI, you can synthesize very quickly what analysts are saying and what is coming out of the 10-Qs and 10-Ks. What are some of the differences that different organizations are pursuing or talking about? What does it mean that I should be thinking about? That is way more prevalent than possible today. It’s not just that you’re getting more productive. You are getting better outcomes faster.
I think that is where technology plays. It is not always a straight line, it is not always easy. One of the hard things about technology, and I live this a little bit with an ERP transition, is it is way more difficult and takes way more investment to get that technology embedded. By the way, it takes longer, and the change is even slower than we might like. My own belief is it’s a long game to get there, but the reward is certainly there. It’s only going to accelerate now as some of the technologies will be easier to deploy, given the foundations we’ve already had.
You started that by saying you were positive about AI. A lot of people are, but CFOs more than other people I talk to have more skepticism and it’s legitimate. It’s around cybersecurity and data privacy and even some biases that AI has been proven to show. How do you feel about that? Do you think these are cybersecurity data privacy? How do we get comfortable around that? CFOs are the stewards of information and other things.
I would personally separate this into two dimensions. One is anytime you are doing more and more with technology and with data, you have more issues that you have to work your way through. Those issues are exactly the ones you are worried about, security and privacy, and therefore what can I do and what can’t I do? That has more to do with any evolution of technology and things you have to be worried about because there is no such thing as a free lunch. All of these things come with downsides.
I think the reason you get more skepticism out of CFOs is way more of these projects yield nothing, or they’re more experiments, and they are trying to drive productivity. They have measurable outcomes and we’ve lived with decades of the promise of a business case that is going to yield an outcome that has not yielded.
I said this in another forum where someone asked, “Is it going to be a net plus or a net minus investment or a return?” I said, “In the short run, it is going to be a 100% investment.” We’re going to have way more failures on some of this new technology than we will going to have successes. Even though success will take longer to scale than we would like. In the medium to long term, and that’s not a very long time necessarily, it is going to be a total net positive.
This question of why do CFOs get their hair on the back of their necks standing up a little bit, it’s because they have decades of experience of no-return investment. You want them to be skeptical. You 100 percent want those CFOs to say, “I don’t buy it.” There is a lot of wish in some of these business cases, but we will start to see more good results from this than we have in the past.
Any technological innovation of any sort has always been met with skepticism, and there are people who see the downside, but anytime technology evolves, it’s always been for the better. I’m old enough to remember when PCs first went mainstream.
In fact, out of high school, I decided to major in accounting and everybody told me that was a mistake and that there’d be no accountants in ten years because computers can do accounting better than people. They couldn’t have been more wrong. Computers created a need for more and more accounting, not less.
I don’t know exactly how old you are, but we are more contemporaries than not. I remember joining the firm. I tell this to the young associates. We would do lit searches by calling our research and information folks, who are librarians/researchers. I’d get back a set of materials, hundreds upon hundreds of pages where what I would put in the word search would be highlighted in all of what they were able to find in various forms of literature, as opposed to what you get today with a Google search. That was the early version of a Google search in terms of when I started my career.
The reality is we find the problems are harder to solve with each passing day. Therefore, the more we can assist ourselves with things that used to take up a lot of time but weren’t as critical to the complexity of the problems we face today, the better off we’ll be. I come back to this question, which you hear all the time, which is, “Isn’t this bad for us, what’s all going to happen with AI?” I say, A) We can’t get the productivity, and therefore we can’t get the GDP growth without it. We don’t have enough population growth certainly in the places where we will need it. B) The problems are sufficiently hard. It’s going to take both man and machine together to solve them in a way that we wouldn’t be able to solve with either.
That makes sense. I know you see it as flexibility, hybrid work, and closing the talent gaps that companies have been facing for a long time. The benefits are almost unending.
One of the great benefits of some of the new technology is that you see it in some areas faster than others. For example, with software development, you were able to get brand new coders up to what I would call the average experienced coders’ productivity in weeks and months as opposed to years. The ability to build, assist, develop and train people to become better at their jobs much faster, the learning curve comes way down. That is a huge advantage for the world at large and certainly an advantage for us.
We can get our people to be better at what they’re going to have to do much faster. I happen to think that’s going to be quite rewarding. I also think we don’t yet know the fullness of what this will achieve, but I am so convinced that the problems that are out there will only get more challenging and require more help than they even do today and we’ll get better outcomes. That’s an important component.
That makes sense. I know also you’re a big believer that CFOs will play a critical role in sustainability. I’d love to chat with you a little about that. How do you see the CFOs making an impression? Fewer issues are more important than sustainability right now.
I don’t know that I’m smart enough to understand the role that CFOs will play at large, but I can tell you at least what I have experienced myself. In there, maybe other CFOs have different experiences or maybe they can build on what I’m sharing. It is going to take real investment. We’ve done all kinds of reports that talk about the size and scale of the investments required, and it’s massive.
That’s at a global level. I think about our firm and therefore what are we going to have to do? We’re going to have to invest in technologies, which means we’re going to have to be willing to be forward-leaning to help create the market pull and market demand for some of the new tech-based removals. We’re going to have to increase our investment in nature-based removals, but both those have the word removals.
We’ve got to find ways to do more in that space. That means we’ve had to evolve how we’ve thought about our responsibility and therefore the investment profile. You have to think about how we are going to spend and invest and signal the market, buy into the market, which we have teams working on, but it’s all new. It requires real-time investment. I was on a call at 6:00 this morning on this.
You get to the other side of it, which is how you pay for it. One of the things that I’m allowed to talk about is we introduced a carbon tax. You can’t add more and more costs all the time. You have to find a way to change behavior. Part of the way you’ll change carbon consumption is you actually get people to consume less and then you’ve got to figure out how to pay for what you haven’t consumed through those removals. We created a carbon tax. We put it in place two years ago. The process of doing that is something that was pretty material for us to navigate to get some buy-in around. It wasn’t 100 percent celebrated. Some people would say no.
It hit the road when all of a sudden people said, “Wait a minute, I can’t afford to take this trip or do this event because, with the carbon tax, it becomes more than I have in my budget.” They have to start rethinking. “Maybe I can’t do it in that location.” You get into this world it does force change. It isn’t always the popular change, but it helps us move forward, not just in the short run, but as we set these goals and pathways to achieve them over the next three to 10 years.
One of the first guests I had was the CFO of AstraZeneca. They take sustainability and responsibility for corporations to embrace it and lead it very seriously. She explained they measure everything. It’s one more thing they have to measure. Maybe it was a little difficult when they started doing it, but now it’s an accepted everyday business practice. In every decision they make, they think about the impact that it has on the environment. I’m guessing McKinsey probably has a similar philosophy.
We do. For better or worse, the majority of our carbon usage is in travel. We have a bit in office buildings, but that is materially less than what we do as we travel. More than anything else, air travel is probably the biggest component of that. We are measuring that. We provide scorecards for how we are doing at a regional and office level, even with a client service team, so they get a better sense of how they are adding and contributing to a solution that we’re trying to do on behalf of society at large and our commitments to it.
What is your philosophy on building a world-class team? I’m sure you’ve got a great finance and accounting team and other groups that report to you. How do you attract, retain and motivate? What are your secrets?
I’ll talk about secrets and I’ll talk about mistakes. I’m not sure I have secrets. I will have the things that are about the positive. A lot of that is you do have to constantly assess talent and make sure that they are getting the right types of support and opportunities. I spend a lot of time making sure they get visibility that they are celebrated for the work that they are doing and that they are getting to present the types of work they are doing. They are engaged with a broader set of stakeholders on that, doing it in a way that hopefully sets them up for success, and taking the time to help them think about what they can say.
I spend a lot of time getting ready for those meetings, or the problem-solving leading to make sure that the solutions that have been well thought through. It’s a lot of in that moment of challenge to get to a better answer. Making sure that they see and are participating in those meetings. Sometimes they are the lead, and sometimes they are there, but rarely, I’m ever doing a meeting on a topic where the people who have been spending the time developing it aren’t physically present and participating. That does give people the opportunity to learn.
The other thing I’m constantly thinking about is how the organization shifts, which could be a combination of moving different things to different people to give them more opportunity, or frankly moving people around an organization so that we get broader visibility across the different skillsets they are developing. It’s like going to the gym. You don’t just work one muscle group. You’ve got to work differently along the way. Be thoughtful about that. In time, I’ve done a couple of reorganizations of my group.
One of the topics that the CFO has asked me about when they seek my advice on whatnot is building a relationship with the CEO. It becomes such a critical thing, that dynamic, where the CEO is the boss, but a lot of people are saying the CFO is even the deputy CEO and the most trusted advisor internally to the CEO. I know, strictly speaking, you have a global managing partner in Bob Sternfels. It’s the same as a CEO. What’s that relationship like?
It is by definition different in a partnership than it is in a corporation. I can talk about it in the context of a partnership. The beauty of being the global managing partner is you are the first among the equals of the senior partners. The partnership itself is a little bit different than the hierarchy that gets created in a corporation.
Bob and I have had the privilege of knowing each other for a very long time. We’ve had incredible ups we’ve had a couple of not-so-great moments. That’s natural in a 20-year relationship. We were very lucky that before he became the managing partner, he was in a role where he and I collaborated all the time.
It was, in my mind, one of the highlights of my professional career because, between the two of us, he led our sectors and our functions, which were the client capabilities that allowed us to do what we do with our clients. Collectively, we were able to move the firm and shift where we were going in a positive way that we thought would be differentiating.
It didn’t mean that we got it all right, but we did work together hand in hand. I thought it was a very powerful and collaborative way. When he stepped into the GMP role, the global managing partner role, we already had that foundation and we already had a little bit of the ability to throw the behind-the-back passes and know what we were thinking and so on. On balance, we’ve had a wonderful time doing that.
The reality is one of the nice things, and this is true broadly speaking in a partnership, we all positively love each other. You want to be around each other and you want to do things whether they’re at work or outside of work and that is a bit unique. I was with a group of my senior partner colleagues the other day and we were doing something and we all said, “There’s no other senior leadership team on earth that would do this.”
It’s the nature of the bonds of partnership that are more like a family than anything else. The hard part of that is sometimes that requires tough feedback. Sometimes that requires a difficult conversation. That feedback can be either direction or that difficult conversation could be because we don’t agree, and like any two individuals, that can be quite difficult.
Sometimes that’s because unfortunately, or fortunately as the CFO, you are there to in some ways be a control. That control is a financial control to make sure that we are maintaining our fiduciary responsibility to the rest of the partnership. On the other hand, there’s a desire to be investing beyond the short term.
How do you balance that? That leads to some tough conversations. What has allowed us to have those tough conversations is the foundation of trust and partnership that we’ve had for 20 years. The fact that we’ve been through the lows together, and we’ve had some real lows, not just between us because we’ve done pretty well. We’ve gone through as he would call it the foxhole. We’ve been in the foxhole together in a few situations. As a result, the grit, getting dirty, bloody and all of that, you do form an ability to work together that you can’t do on paper. That’s been a powerful component of how we partner.
That’s a great answer. It’s such a critical one. I want to shift gears a little bit and talk a little bit about McKinsey’s gender research. I know you have a partnership with Lean In. Can you tell us a little about that?
I was much more engaged in that early on. I had just moved. It was probably 11 years ago that we started the conversation with Lean In. We had invited Sheryl Sandberg to join us at our global partner meeting which we were doing in San Francisco. She was still at Facebook at the time. The Lean In circles are starting to catch on. One of the things that we believe is a strategic question and obligation of corporations. If you’re searching for the best talent in the world, how do you not create an environment where there’s no question that a distinctive woman or distinctive man is the same as the percent population? If you’re off on one side, by definition, you don’t have the best talent.
We agreed at that time that we would combine forces and try to do research, not knowing if this was going to be a one-year partnership. Now I think it’s 11 years or 10 years in the making. It started by saying, “How do we do the research? Can we go get a bunch of individual companies to do things? Can they go through and fill out a bunch of data so we have a baseline?” The baseline would be if you thought about women across the funnel of leadership versus men across that same funnel, how different does it look? What are some of the behaviors or perceptions that may advance us forward or not?
One of the things, and it was in the second year that we did this, it was one of those moments where we made microscopic progress. In retrospect, it’s not surprising, given the complexity of the issue. Sheryl stood up at The Wall Street Journal and said at the rate we are going, we will be able to go back and forth, I can’t remember if it was the moon or around the sun or whatever it was, some ridiculous number of times before we will ever get to anything that resembles equity. That was a big part of what happened. That research is still going on, and there are pockets of progress, but frankly, not nearly enough. I don’t think it’s for a lack of effort and visibility. It is a difficult issue, and it will take time to work its way through, no matter how many of us take all the right steps along the way.
We have a long way to go. As I leave the workforce, I want to make sure that I’m leaving it better than when I entered it. In my company, I’m a feminist, and I tell people that. I don’t think any of the women I work with would say it as blatantly as I do, but I see so many talented CFOs. I do wonder why only 14 percent, or whatever it is, of the Fortune 500 has a female CFO, because we have a thousand female members, and they’re all talented, dedicated, great at their jobs and good people too.
I’ve been lucky enough to go to work with several women CFOs and they are spectacularly talented. You’re 100 percent right and I don’t know the answer to the question of why.
We’ll get there. We’ve made some progress and the next generation will do better and better. I was reading something about your background, and it’s impressive. I found at least three boards that you’re involved with. The Silicon Valley Leadership Group, you’re on the board over at Cornell and then the Hoover Institution at Stanford. What inspired you to take active roles in boards? I also want to understand how you do all of this. You’ve got a very important job and family and three volunteer boards. How do you juggle all of these things?
I can’t tell you that I won any Father of the Year awards, but I certainly have lived from a family perspective that it is about the quality of the time over the quantity of the time. I do focus on the quality. We talked earlier about how I’m an avid skier. We, as a family, go up to Tahoe almost every weekend.
One of the rules that my assistant, who is the best assistant I could ever have asked for, Sylvia, knows is that no matter where I am in the world, I have to be home Friday by 3 p.m. between December 15th and the end of March because if I can get home, then I can take the family and we can drive up to Tahoe and do our thing. It’s about the time we spend together. We cook dinner together, we eat dinner together, we watch movies together and we ski together all day. It’s something quite special.
With my two boys, whenever I am home outside of those months, I try to play golf with them on the weekends at least once, if not twice. We’ll get up super early. By the way, getting teenagers up early in the morning shows they’re pretty into it, too. They enjoy the time. I’m trying to focus on the quality of time with them. When it comes to things like the Hoover Institution and Cornell and Silicon Valley leadership, I have always had an interest in education. That has been a real focus of mine for quite some time. I was on the board of a school back in New Haven, Connecticut, where I went to a middle school and high school called Hopkins School. I did that for 10 years, and I loved every minute of it. I felt like it was giving back and making a difference in helping the institution get better.
I feel like I’m getting a chance to do that as well at Cornell. It’s an institution that mattered a lot because it was quite shaping to me. That comes with some personal sacrifice. It comes with some weekends, it comes with some extra travel. I do feel like I owe it to Cornell to do what I can, given how much it gave to me and how much it helped establish who I was or who I am.
The Silicon Valley Leadership Group is giving back differently. It is giving back to the community and thinking about how we, collectively, as business leaders, can shape our area and the government and legislation around us to make sure we are developing, creating and solving the problems that require the intersection of business and government and NGOs to come together to do.
Then the Hoover Institution, in all fairness, I’ve been on there for a very short time. I think the Hoover Institution has stood for the right things at this moment where you have to think about the role of democracy in the world and upholding that combined with the restoration of trust in the great institutions of the world and particularly of the U.S.
I think Hoover is remarkably well-positioned to do that. We are incredibly lucky to have Secretary Rice as our CEO. Frankly, I’ve always been so amazed by her leadership that it was a privilege to be able to join and get connected and give back to it. Lastly, selfishly, I can’t tell you how much I learned from the Hoover Institution.
The resources there that I can learn from, because it’s some of the smartest fellows and senior fellows in the world, academics in the world, coming together to solve real problems and do the research in a fact-based way on the real problems that face us. That’s worth giving back to. All of those things come at some level of personal sacrifice because they’re time away from family and time away from work, but on balance, they seem like very high ROI investments in terms of giving back.
Good for you. That’s very admirable. There’s one thing I found troubling about your background.
I’m sure there’s more than one.
There’s one that irked me and I’m going to say it.
You’re from Boston. I know where this is going.
I played my hand up. A Yankees fan, come on. You grew up in Brooklyn though.
This is the story you’ll appreciate. When my now 12-year-old had his first set of sheets on his bed, they were the 26 baseball teams. They wear their baseball caps. We’d go around every night when we put them to bed and we’d talk about the different teams. Of course, the Yankees were very prevalent, but every time we got to the Red Sox, he would say, “These are the bad socks,” because that’s what I had thought.
I somehow have never heard that before. Because this is a family podcast, I can’t share the things that Bostonians used to say about the Yankees. I grew up getting beat by the Yankees every single year of my childhood, it seemed like for the last 20 years or so, the two franchises have received somewhat parity. We may have more total World Series this century. I’m not exactly sure, but the Sox have four, the Yankees have three, something like that.
This century? I think the Red Sox may very well have more.
We had four in 10 years, but now the team.
You’re in a rebuilding phase.
Perpetually. Eric, this has been a lot of fun, what’s some advice you can give for the next generation of CFOs?
I think we’ve covered a lot of the things that I would say are important. One, investing in the team, by the way, investing in the team and getting the right team in place because no matter how good you are as a CFO, you can’t have all the answers, and making sure you’ve got a team that can be thoughtful is the first and foremost.
The second is, I loved your frame of this question, “Why not?” Pushing to open the aperture. You can do that way more. The third is, I do think a big part of my role is looking around corners. It’s very easy to get focused on the thing that is right in front of you, but the reality is it’s the thing that you don’t see what’s around the corner that is the thing that is most likely to be the curve ball that’s hard to hit.
Part of my job is to do my best to look around those corners and think about what are those things or what could they be and whether we are prepared to handle them. I probably spend more time doing that and integrating the parts than anything else. Take the time to make sure you can see around the corner.
I guess the last is this notion of the investment in your connection with the rest of your leadership team, not just the folks in finance, but whether it’s the, in our case, the GMP or the various other folks that are in my partners. That investment to build trust and feel like you’re working together helps you get through the tense moments and there will be tense moments for sure.
That’s great advice. Eric, I know you’re super busy. I’m grateful for this and I know the audience is going to love it. I’d love to give you the final word before we sign off for the day.
As I said at the beginning of this, I don’t know that I deserve to be in the rockstar category, but it’s a privilege to be here. It was awesome to get a chance to chat. You made me think and reflect, and I enjoyed that. A huge thanks, and it’s an honor to be able to play the role on behalf of my partners. It’s something I’ve appreciated, and I thank them for giving me the chance to do that.
