Discover How Financial Modelers Are Using Copilot and ChatGPT with Global Expert Kenny Whitelaw-Jones
In this episode of Financial Modelers Corner, host Paul Barnhurst, aka The FP&A Guy, looks into the transformative impact of Artificial Intelligence on financial modeling. The discussion explores how AI is reshaping the industry, the challenges and opportunities it brings, and what financial modelers can expect in the coming years.
Kenny Whitelaw-Jones who is the founding partner at Gridlines joins the show. As a leading expert in project finance modeling, Kenny has played a pivotal role in shaping financial modeling standards globally. With over a decade of experience training blue-chip clients and developing complex models, he brings invaluable insights into how AI is poised to revolutionize financial modeling.
Expect to Learn:
How AI is expected to significantly impact financial modeling, with Kenny's recent industry survey.
The current limitations of AI tools like ChatGPT in financial modeling and where they excel.
How project finance modeling differs from other types of financial modeling, and why Kenny finds it exciting.
The importance of soft skills and communication in the evolving role of financial modelers.
The future skills financial modelers will need to stay ahead in an AI-driven world.
Here are a few quotes from the episode:
"In the future, the routine tasks will be automated, and modelers will focus more on strategic, value-adding activities."
"Being a good modeler isn’t just about Excel skills. It’s about interpreting data and communicating results effectively."
"The change AI brings is inevitable because as soon as we can imagine it, someone will figure out how to make it happen."
As AI continues to evolve, it's clear that financial modeling is on the brink of a major transformation. Kenny Whitelaw-Jones shared not just the technical impacts we can expect from AI, but also how the role of financial modelers will shift toward strategic thinking, business interpretation, and effective communication. While tools like ChatGPT and Copilot are making waves, it’s the human element that will remain irreplaceable.
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Email - kenny@gridlines.com
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In today’s episode:
[01:46] – Meet Kenny Whitelaw-Jones
[02:35] – The Worst Financial Model Encountered
[05:43] – Why Project Finance and Renewables?
[10:04] – Survey for AI in Financial Modeling
[14:58] – ChatGPT vs. Copilot
[18:57] – Excel Innovations & the Future of Modeling
[22:34] – The Future of Financial Modeling with AI
[26:50] – Soft Skills & the Evolving Role of Financial Modelers
[33:51] – Rapid-Fire Round
[40:51] – Life Beyond Financial Modeling
[43:48] – Final Thoughts & How to Connect with Kenny
Full Show Transcript
[00:01:15] Host: Paul Barnhurst: Welcome to Financial Modelers Corner. I am your host, Paul Barnhurst, aka the FP&A Guy. This is a podcast where we talk all about the art and science of financial modeling with distinguished financial modelers from around the globe. The Financial Modelers Corner podcast is brought to you by the Financial Modeling Institute. FMI offers the most respected accreditations in financial modeling, and that's why I completed the Advanced Financial Modeler. This week, I'm thrilled to welcome our guest on to the show, Kenny Whitelaw-Jones. Kenny, welcome to the show.
[00:01:52] Guest: Kenny Whitelaw-Jones: Thanks so much, Paul. I've been following the podcast for a long time, so it's good to be here.
[00:01:57] Host: Paul Barnhurst: Yeah. Excited. We were able to make our schedules work and have you on the show. I'm excited for our topic here about AI that we'll jump into in a moment. But just to give our audience a little bit of background on Kenny. Kenny is one of the founding partners at Gridlines. He is a leading financial modeling expert in the project finance market globally. And over the past ten years, he's played a significant role in the development of financial modeling standards and has trained project finance modeling to blue chip clients throughout the world. Exciting project finance. That's an area I haven't done much of, so I'm excited to dig into that a little bit. But as we always do, tell me that horror story. Worst financial model you've dealt with?
[00:02:40] Guest: Kenny Whitelaw-Jones: I've seen some absolute basket case financial models. I think the worst financial model I dealt with was maybe the one I was implicated in. It was right at the start of my career when I was I was with one of the big four, and I won't say which one, but I was first in financial modeling and the corporate finance team was involved in this restructuring and the modeler had just you know, I think I just under pressure of this, you know, 24 hours a day, relentless high pressure restructuring of this, this large company, you know, lots of people involved and from the firm and this model in the middle of it and the financial modeler just kind of disappeared, went off, vanished. And so it was kind of left with other people in the middle of this high stakes situation to pick up this model. And it was a basket case. It was kind of a template model that was actually never built for that kind of business that nobody really understood, and everybody was trying to hack stuff into. And I was kind of implicated in that madness. And it was just saying of, you know, horribly complex models being misused for the wrong situation. And then that the person who really understood the model has gone, and you're just left picking up this horror show. And it was really embarrassing and career limiting for quite a few of us.
[00:03:50] Host: Paul Barnhurst: And that sounds like an awful model. What was your key takeaway? What was the learning experience from it?
[00:03:55] Guest: Kenny Whitelaw-Jones: I think I didn't do it at the time, but as I like, my career progressed and I saw, you know, because I was right at the start of my career and I didn't know there was better ways to build models than that. And I think that's really classic. You kind of land as an analyst in one of these firms, kind of look around and you're kind of seeing what's being done, and you start doing that because you think it's right and then or good. And then over time, I started to see there's actually really much better ways to build models where in a matter, if the original model vanishes because everybody else understands the model because you're following some kind of a standard. It was just a thing that's been reiterated to me time and time and time again about consistency and standards and modeling and what a lifesaver that is. And I think that just informed, I think a lot of the work that I've done over my, over my career.
[00:04:39] Host: Paul Barnhurst: And so I'm curious, did you guys end up rebuilding that model or did you continue hacking together?
[00:04:45] Guest: Kenny Whitelaw-Jones: There wasn't time because the pressure was on. I mean, I went into a meeting with the CFO of this company and the partner who was in charge of the assignment. And they were, you know, looking for answers from this model. And I've never felt so exposed. They were like, you know, what's the maximum working capital exposure? I was trying to find it in the model. Yeah, it was horrifying. So no, no, we didn't rebuild it. We didn't cover ourselves in glory. Nobody walked away with that with any awards. It was a bad scene all around.
[00:05:12] Host: Paul Barnhurst: Yeah, that's definitely one you learn from. And not not exactly the way you want to get parachuted into a new job. Definitely something you'll never forget.
[00:05:20] Guest: Kenny Whitelaw-Jones: That's right, that's right. Very, very formative, shall we say, as an experience.
[00:05:25] Host: Paul Barnhurst: I can only imagine. Yeah, yeah. I have no idea what the word. Let me see. It's 30, 36, 40. I don't know, make up a number.
[00:05:31] Guest: Kenny Whitelaw-Jones: Yeah, yeah yeah, yeah, yeah. What do you want me to say? You know, I don't know where to find it in the model. It was just. It was awful. Yeah.
[00:05:36] Host: Paul Barnhurst: What do you want the number to be? Right. That's when you know you're in trouble. When that's the response.
[00:05:41] Guest: Kenny Whitelaw-Jones: Mhm. Exactly right.
[00:05:43] Host: Paul Barnhurst: Yeah I know you started with one of the big four, but a lot of your experience seems like your career has been around project finance renewable Global energy. What's attracted you to those areas? What? Why those industries?
[00:05:55] Guest: Kenny Whitelaw-Jones: In a way, I kind of fell into it, but I joined the firm I trained with. It was early 2000. There was, you know, I thought I was going into an M&A kind of corporate finance role. I thought was going to be a big, sexy M&A guy. And that happened at the same time as those kind of a.com crash. And the M&A teams were shrinking. But there was this thing in the UK called PFI, which was using project finance structures to finance social infrastructure like schools and hospitals and things. And there was a huge wave of projects in the UK that were project finance based as a structure, but being used to rebuild schools and hospitals that eventually fell out of favor in the UK got quite bad press and was abandoned as a funding mechanism for social infrastructure. It's still used many, many places around the world outside of the UK, but it just meant there was a lot of projects then and there were really modeling intensive, and I liked modeling and it just kind of fell into that Yeah. And that was really before the renewables explosion. And you know, what I could see was that as I kind of then started to learn more about infrastructure and energy, I was like, okay, so this stuff's not going to go boom and bust the way that, you know, the corporate finance world does, you know. In fact, if anything, it's kind of anti-cyclical. You know, governments tend to spend more on infrastructure during downturns. And so I thought this is probably a good place to be. And then I also liked the modeling challenge of it. I liked the complexity of it. Those models are pretty pretty complex and even more, way more complex now than they even were. My day, especially around renewables, are not my day. But back in starting my career.
[00:07:31] Host: Paul Barnhurst: And how old are you, Kenny? Back.
[00:07:34] Guest: Kenny Whitelaw-Jones: Back in the.
[00:07:35] Host: Paul Barnhurst: Day.
[00:07:36] Guest: Kenny Whitelaw-Jones: Back in the day when I was building models. I like the tangibility of it. I like that at the end. We tend to, you know, we'll see a project through its development and its stage until it gets to financial close, at which point the construction of that thing starts, right? That wind farm or that wastewater treatment project or that hospital. And we tend to kind of lose touch with it. But then what I really like is when I see later, oh, there's a real thing here making a difference in people's lives. There's a real big, huge wind farm out in that desert or there's, you know, there's a school you can point at stuff that has made the world a bit better. And I think that's especially true of energy transition just now. You know, the explosion in renewables in the past few years has been a great thing to be part of, you know, because we have a good offering in that area. But it's also good to be able to point at being involved in projects which are making a difference in the world and that are making lives better, that are part of our development as a species. Right. And that's kind of maybe a bit big, but I really like the tangibility. I really thought that, you know, we're we're we're contributing in our way. Obviously there's lots of participants in these projects, but we're contributing in the way that we can and the way that we do to creating some lasting and useful change for the planet. And I find that really interesting.
[00:08:57] Host: Paul Barnhurst: Yeah, I imagine it's fascinating when you actually see something that you worked on and go, oh yeah, I can see that, and I can see what it's doing. Do you have maybe a favorite one where you've later on been able to see it and you're just like, wow, I worked on that. Like a favorite project.
[00:09:11] Guest: Kenny Whitelaw-Jones: There's lots I mean, there's a couple of hospitals that I, you know, drive by relatively regularly that weren't there before. Like there's a hospital, you know, I worked on that project. I go. One of my favorite cities in the world is Edinburgh, where I'm from. And I go there. And now there's trams running around the streets of Edinburgh, you know, and, and, you know, I was involved in indirectly in that project through supporting some of the people who were I wasn't building the model, but I was supporting some of the people who were building the model was training and and consultancy and whatnot, and that was just brilliant. I step on a tram and was like, you know, And that's making the transport system in Edinburgh more green, more efficient, less, less polluting, less based on cars, making the city center a nicer place because there's less traffic. Like that's a great thing. It's a great thing to be part of.
[00:09:57] Host: Paul Barnhurst: Love it. That's a great example. That's cool that it's, you know, somewhere that's home for you.
[00:10:02] Guest: Kenny Whitelaw-Jones: Yeah, exactly. Yeah.
[00:10:04] Host: Paul Barnhurst: All right, so you recently did a survey either a few hundred finance people around AI and financial modeling. So tell me, how did the survey came about? What prompted you to do that?
[00:10:15] Guest: Kenny Whitelaw-Jones: It's purely personal interest. It's just like I'm just fascinated by. I've always been interested about how is financial modeling going to change? How has it changed? How is it changing? How are the projects changing? And obviously AI is just turning stuff on its head. And I think it's massively exciting, you know. And of course we can all you know, we can all get lost in our own fear stories about what AI is going to mean for, you know, for, for, for us as a, as a species. But I think it's really exciting and I'm just curious to see how this is going to happen and to financial modeling. My hypothesis is it's going to create a lot of change in what we do. And it's trying to trying to look at, well, it was just really asking the question to other modelers, but what do you think is going to happen? You know, and just because it's purely interesting and because I enjoy doing stuff like that, I enjoy kind of bit of research, you know, produce a little report, put it out just to stimulate conversation. And that's been, you know, doing this kind of things is great. You always make new connections. Somebody turns up and says, I read your report. That was really interesting and strikes up a new conversation. It's good for kind of expanding our network and so on, but it really starts out of personal interest and wondering also what's that going to mean for gridlines for my business. You know, we're a 70 strong team of financial models will be 100 by the end of the year. As far as I know, we're the biggest dedicated financial modeling company in the world.
[00:11:44] Guest: Kenny Whitelaw-Jones: Lots of, you know, lots of the big firms have more likely bigger modeling teams. I'm not saying we're the biggest modeling team in the world, but as far as I know, we're the biggest dedicated modeling firm. But modeling is what we do. And that's, that's that's, you know, and so it's also a little bit like, well, how is that going to affect this business? You know, if we are purely focused on financial modeling and we do, you know, we support infrastructure and renewables transactions, we do model audits. We build models for all sorts of sectors. I can see AI is going to have an impact on all of that. And it's a little bit of me just trying to get myself ahead of the curve of what, what can we expect to be coming down the track here at us, and how can we position ourselves to be to take advantage of it, not to be running scared, not to be burying our heads in the sand and thinking, well, financial modeling is never going to. It's a unique thing. You know, it's not going to be affected by that. I think that would be a terrible mistake to assume that. And so even though we're not really seeing big changes right now in financial modeling due to AI, I just have no doubt that it's coming. Yeah. So it's just like under trying to, you know, just explore the topic for myself and for us as a business and then like, why not share it, right. We're all going to be affected by these things. We're all going to have to change what we do. And so why not share it now?
[00:13:01] Host: Paul Barnhurst: So have you released the report? Is it available?
[00:13:03] Guest: Kenny Whitelaw-Jones: Yeah we have yeah it's available to download. Yeah. Yeah.
[00:13:06] Host: Paul Barnhurst: Great. So make sure you give that to us. We'll put it in the show notes.
[00:13:09] Guest: Kenny Whitelaw-Jones: We'll give you that link to download it.
[00:13:10] Host: Paul Barnhurst: So let's start, let's start with obviously you mentioned you kind of did it for personal reasons, business reasons. Right. There were a few different things. Why do you see what others say. So can you tell our audience what were some of your key takeaways from the survey? I mean, what's the key thing you took away from it?
[00:13:26] Guest: Kenny Whitelaw-Jones: I think it kind of confirmed what I expected to see, which was that I think the biggest thing was, like most modelers, I think I forget the numbers off the top of my head. Most models say I think it's around 75%, expects that AI is going to have a very significant effect on modeling, but a very small number. Again, the numbers in the report, but so say 10%, are actually using AI in a very systematic way, or using AI for tasks that are related to modeling. So it's that it's kind of confirmed where I think we're at, like this big thing is coming. It hasn't really arrived yet, but we think it's coming. So what's it going to look like? So in a way kind of confirmed what I kind of thought we would see there. But that's also a useful thing to have confirmed. Like, because I would be a bit surprised if there was like, you know, 80% of models says, well, you were using AI to build all our models. I'd be like, oh crap, what have I missed, you know, and where have I been? Where have I been for the last two years, you know, so it was kind of it was useful from that perspective.
[00:14:28] Host: Paul Barnhurst: Now it makes a lot of sense. And that's kind of what I'm seeing in, I think finance in general, the modeling, deep analytics, there's areas that can be helpful, but it's not really at the point where it's going to do majority of projects for us. Doesn't mean you shouldn't be using it, doesn't mean it's not incredibly beneficial. But I think most of us feel like if you want to call it revolutionary, those significant things I think in the finance financial modeling space is still coming. We're still figuring it all out. And so, you know, one thing I found really interesting, I'd go through a couple things in the report. Just love to discuss them as I look through it. I found is most people who are using copilot versus ChatGPT in your report were much more likely to use Copilot daily than if they were using ChatGPT on a daily basis. What's your thoughts? Why do you think that was the case? And he thought.
[00:15:22] Guest: Kenny Whitelaw-Jones: I think it's just its ease and proximity. You know, if you're if you're a person who's working in Excel a lot, then you're even you're going to use copilot, you're going to be checking out, you're going to be testing out and see what's there rather than switching over to ChatGPT to do stuff. And I just also think ChatGPT doesn't do very much yet. That's actually very useful for financial. For financial modeling, it can write VBA, it can recommend formulas. But I honestly feel like if you're a financial modeler who's needing to go to ChatGPT to know what formula to use, you've got some work to do, right? You know, a big, big, you know, and it's great to discover new stuff, right? Don't get me wrong. And, you know, I'm always whenever I'm teaching a course, which I don't do as often as I used to, but whenever I'm teaching a course, I always learn something. Right? Somebody that's got some clever way of doing something. I'm like, oh, wow, I never would have thought of doing it like that. That's really clever. And then what I do is I take that and I teach it on the next course and pretend it was my own right. And so and so that, you know, always learning something. And I guess ChatGPT, these things can be useful from that perspective, but I just don't think it does very much. That's actually very useful for financial modelers. Yet I see some interesting I mean, for example, I tried I took the CSV file of the survey results and results, and I uploaded it to ChatGPT and asked it to do some analysis on it.
[00:16:34] Guest: Kenny Whitelaw-Jones: Some very basic analysis just did a really bad job and it gave me inconsistent results. I would ask the same question twice. It would give me two different results based on the same data. I was like, ah, this is this is some this is ropey, you know, but I see some interesting things happening. So, there's a company called Grid based out of Iceland. Helmer is the CEO and they built this replica spreadsheet engine on the cloud. It does everything that Excel does. It does everything the Google Sheets does. And they built this and now they're working on ways to connect that to ChatGPT. In fact, they've figured out how to connect their dedicated which they can control spreadsheet engine to ChatGPT. So the idea is both things kind of doing their job well, you know, the chat, the chat bot doing the natural language processing, the interpretation of language instructions, but passing that to the spreadsheet to, to do the, the actual the actual calculations. That's interesting right. So those kind of things are going to start to happen through different technologies merging and being assembled in different interesting ways. So I really think it's because I don't think you can get it to do VBA, but otherwise I don't think ChatGPT has got much to offer financial modelers, to be honest.
[00:17:49] Host: Paul Barnhurst: Interesting. I appreciate the answer. I've heard it agreed before and I use ChatGPT a little bit modeling and there's areas I found it's good, there's areas of struggles. I think there's definitely some truth that's not totally there yet. And copilot is built into your applications. Yeah. It gets back to one of the biggest things that we're trying to figure out is building the agents and building it into workflows. And if it's in all my tools, it's much closer to being in my workflows than having to open a browser and go find the application.
[00:18:19] Guest: Kenny Whitelaw-Jones: Which gives Microsoft an advantage, right? Maybe. Maybe it says there's a disincentive to build new tools in this area, because it's going to be very easy for Microsoft just to build it right into Excel, and then you're done, right? So it's like, you know, the installed base, the network effect. And I think they are being really innovative and they're upping the pace on how they're developing Excel, which is exciting to see. But I think that might mean that there's, it could end up with less innovation rather than more. Who knows. Right. But it's just something to observe how that plays out.
[00:18:52] Host: Paul Barnhurst: No. And you know, Microsoft's a huge player in all of this. And they have a lot of built in advantages. But as you mentioned you know, Excel. I'm just going to deviate a little bit here for a minute. You talk about how Excel has done a ton of innovation over the last few years. Is there a favorite innovation of yours that you've seen over the last few years? Something that has you really excited, right? It feels like every month they're coming out with something new. So what's one thing that you're most excited about?
[00:19:15] Guest: Kenny Whitelaw-Jones: I mean, dynamic ranges have been great, right? And really interesting. It's interesting for us because, you know, most of our models are a very specific kind of model that's probably quite different than a lot of other people use cases for Excel the way that we build these. 2530 year project finance forecasting, you know, models. It's interesting. A lot of the innovations so far haven't really, really changed a lot that we do. They have the potential to. So I see for example, people building models with dynamic timelines right. That using dynamic and okay great use case for dynamic arrays. But I think where we are right now is the overhead that that adds to a model. It just isn't worth it because we just don't change timelines that often. So it's not like, you know, if we know when we're starting a project that it's, you know, there's a power purchase agreement that's 20 years long. We know that we need to build in flexibility for another, say, 2 to 5 years of extension. We know that and that isn't going to change. So adding all this kind of engineering overhead to the model so that you can, you know, in a flash, change it. And all the time when you're going to be changing, you know, that's a great thing to be able to do because when we change the timeline of model, it's a pain in the ass, right? But we don't have to do it that very often. So now we're kind of balancing. Do we put all that engineering overhead into this thing to make it super flexible when it's just not a problem? We really have to solve that very often.
[00:20:40] Guest: Kenny Whitelaw-Jones: When we do have to solve it, it can be painful, but it's like a, you know, a few hours of work and it's done. So it's just that it's balancing those kinds of balancing those kinds of things. But we stay on top of it. And I really enjoy seeing the people who are experimenting with that. I'm like, yeah, you do the experimentation, you come back and tell me you got it working, and then we'll take a look at it. Right? But right now we're not going to spend a lot of time on it. But, but but lots of interesting things, you know, lambda's interesting new functions, you know. Great. You know, Python in Excel. I can see all the applications just in our area right now. It hasn't quite landed on anything that really makes a material difference for us. You know, the biggest thing for us is frankly calculation speed. If you could just, if you could just take the calculation speed of Excel and multiply it by ten, 20, 50, 100. That would make a big difference to us, you know. But like because we've got these models that optimize and we need lots of rotations. We need lots of iterations to kind of land on this optimal tariff that meets a particular return target with a particular debt sizing with these constraints and these constraints. And there's a lot of iterations to, to to land on that converged solution. So just speeding that up would be super helpful. But none of the other stuff has really made a huge difference to us yet. But we're paying attention.
[00:21:52] Host: Paul Barnhurst: There's a lot of sexy stuff out there, but is it really? Is it stuff you need yet? And yeah, it depends on what you're doing for sure. I think, you know, most modelers and, and I'm in this camp have said, look, dynamic arrays are great fun. Lots of use cases and Excel fully dynamic models. Not really there yet for the average user. I mean, can you do it? Sure.
[00:22:13] Guest: Kenny Whitelaw-Jones: And it's a fun thing to challenge. It's fun like, can I build this model and see if you like to kind of sit for a few hours and geek out about it, which, you know, sometimes you like to do that. It's good. But you know, as you say, not really there yet for us.
[00:22:24] Host: Paul Barnhurst: Yeah. So it'll be interesting. Watch. I mean, there's definitely some that are pushing it and I'm excited to see the developments. I'm like you watching it closely and excited to see how it all plays out. So you had hinted at this number earlier where, you know, 75% of modelers said they do see AI having a significant or revolutionary impact on modeling. So where do you think that impact will be? Like you personally in the next couple of years, where's the biggest area they're really going to change modeling.
[00:22:55] Host: Paul Barnhurst: FP&A Guy here. And as you know, I am very passionate about financial modeling and the Financial Modeling Institute's mission. I have been a huge fan of the FMI for years, and I was super excited when they decided to sponsor the Financial Modelers Corner. I recently completed the Advanced Financial Modeler certification and love the entire experience. It was top notch from start to finish. I am a better modeler today for having completed the certification. I strongly believe every modeler needs to demonstrate they are a qualified financial modeler, and one of the best ways to do that is through the FMI's program. Earning the accreditation will demonstrate to your current and future employers that you are serious about financial modeling. What are you waiting for? Visit www.fminstitute.com/podcast and use Code Podcast to save 15% when you enroll in an accreditation today.
[00:24:01] Guest: Kenny Whitelaw-Jones: Well, what would it need to do for me to be excited? I guess maybe I'd come at this question, right is like, what are our pain points that I could foresee? I having an impact, you know, and if I look at our typical project that we do, we're going to split between our kind of model build team and our and our model audit team. So if we're building model, typically we're building a model as part of a bigger mandate that we're doing, which is supporting a project through to financial close and developing this project. And if you look at the split on time, probably 10% of total project input is on building the model and 90% is, you know, using the model to support the commercial negotiations that are going on around the project. And therefore, we're spending a lot of time learning sensitivities and scenarios and producing recommendations and testing out different debt structures to see what's the most competitive. And so, yes, making the model build process faster would be really, really useful. And I think that's absolutely going to happen. And I know that because we're already working on technology to do that. So, you know, speeding up that process would be super useful because a lot of modelers or models are very similar. You know, say some of the models we build would be like 70% the same as another model, but that 30% is really different. So it's you know, it's getting more efficient at building models, having the ability to run hundreds of different ask questions, ask questions in natural language about assumptions in the model, and have the model run 200 times and give me a tabulated set of results that let me go.
[00:25:35] Guest: Kenny Whitelaw-Jones: Okay, there's the optimum there really easily. You know, like that would make a big difference to me. And then on the model audit side, you know, model audit is made up of two kinds of processes. One is is kind of software checks that are happening already. We have software for checking basic integrity stuff in a model. And then there's the more commercial checks, you know, and for that we're currently using, you know, we'd be having somebody read the project contracts and then check does the modeling of that payment mechanism or that debt structure, does it match the contract. And so far that's been human. But I can see all of that being used. You know, there's you know, lawyers already using, you know, LLMs, ChatGPT type structures to work with, work with contracts, you know, and we've been playing with that of having, you know, a chatbot read a contract and then recommend the way that that should be modeled and then saying, can we pass that straight to, to our model, build software and have that all work. And there's no reason that can't be done for audit as well. So I just think a lot of routine things, but a lot of things where there's interpretation required will be able to be supported by AI in the future. I think that's just a question of time.
[00:26:48] Host: Paul Barnhurst: Yeah. Makes sense. I appreciate you sharing that. So with all these changes coming and they're coming, right. As you said, none of us want to stick our head in the sand and think, oh, it won't impact me. It's too unique. What I do think that at your own risk. Right, right. What do you think will be the changes in skill set that will be needed as we adjust to this AI world? Is it going to change what a financial modeler needs to be successful?
[00:27:12] Guest: Kenny Whitelaw-Jones: I think that's to some degree already changed. I think financial modelers and I hear this, you know, in the in the market, I think there's maybe a perception of financial models as though they're just the number crunchers, there's just the formula writers and, and I don't I don't actually see that to be true. I see that that modelers already either to be a really good modeler, you need to be good at interpreting data, at analyzing data, at presenting data. I mean, that's one of the key things, right? Can you you can model stuff all day long, but if you can't communicate the results of what you're doing in a way that's really effective, you may as well not have done it. You know, it's about being able to interpret business logic, about ask good questions. I think there's already a broader skill set there in a really good financial modeler that I don't think a lot of people maybe recognize is there. And when they just see modelers as kind of the number crunchers as the, you know, the spreadsheet guys. But I think as the routine tasks are going to become more automated, I think I think we are going to have to be much more in those added value areas, strategic like like interpreters of business logic, interpreters of model results into into recommendations and actionable decisions in a way that's clearly communicated, you know, thinking of what will the objections be? What will what does this data mean? And, you know, using, you know, being able to speak human around the data, I think is going to be really, really important.
[00:28:40] Host: Paul Barnhurst: Like that, being able to speak human. Yeah. So it feels like, you know, which I've heard from a lot of people, definitely more on the soft skills which we've seen change. There's this view that we're just number jockeys and all we can do is work in a spreadsheet. And there's so much more to modeling than that. I mean, the reality if you're a good modeler, you're not spending the majority of your time in Excel. At least you shouldn't be on the average project, there's exceptions, but on average, I would say any other final observations or kind of key takeaways that you want to share from the survey that we haven't talked about.
[00:29:13] Guest: Kenny Whitelaw-Jones: Thanks, thanks. Thanks, Paul. I think one of the things that struck me, we asked one question, which was about what would you like AI to be able to do? And we asked that as a free text response, which is never a good idea in a survey, because you can't actually analyze the data and you've got to actually go through it manually. And so that's time consuming. But it was interesting because the answers were all over the place, all over the map, you know, whatever you could imagine, it was like hundreds of 200 different answers. There were themes and patterns in it which we pulled out for the report. But that was I thought that was really interesting because I thought, wow, we are as a group of models, we are imagining a world where this will be done by AI, which means, you know, it can really kind of mean, well, it's going to happen, you know, because because we can imagine it happening, you know. And so that's where all innovation starts. Is somebody thinking, I think we could do it like this. You know, I could see this happening. And, and so, you know, as, the, as, as it becomes possible for all of us to Develop tools and agents using AI and deploy that in different ways. These tools, even if they're really like little micro tools that somebody develops for themselves, they will get developed. This change is going to happen, and it's going to happen in really interesting ways, in lots of different ways, because I realize that, you know, in project finance, we are a very narrow niche area of financial modeling. I mean, we're super narrow. And I don't necessarily have the perceptual apparatus to know what everybody's doing in models everywhere. Right? But what it showed me was, wow, there's so many ways this is going to change what we do. And I thought that was really interesting.
[00:30:43] Host: Paul Barnhurst: That is fascinating. And I agree with you. Right. There's so many different types and ways to model and things. People consider models, right? Even just how you define a model, ask five people get six answers. It's kind of like if you ask economists, you get multiple answers.
[00:30:57] Guest: Kenny Whitelaw-Jones: Exactly.
[00:30:58] Host: Paul Barnhurst: I agree with you. It'll be fun to watch. And it does start with imagining what it can do. And somebody figures out how to make it do that. And you're like, wow, I would have never thought it could do that.
[00:31:10] Guest: Kenny Whitelaw-Jones: And that's exciting, right?
[00:31:12] Host: Paul Barnhurst: It is. It's really exciting. All right, so I'm gonna move on to a little bit more of some of the standard questions we ask our guests. The first one is favorite Excel shortcut.
[00:31:21] Guest: Kenny Whitelaw-Jones: F11 quick chart every time.
[00:31:24] Host: Paul Barnhurst: All right. Thanks, I like that. What's the number one lesson you've learned over your career that's helped you the most?
[00:31:31] Guest: Kenny Whitelaw-Jones: Don't be a dick. Just just just treat people nicely and fairly and be reasonable. And just try not to be an asshole whenever possible. I have succeeded. I mean, I really haven't always succeeded in that front, but I'm trying.
[00:31:44] Host: Paul Barnhurst: The life lesson is treat people like they want to be treated and be nice.
[00:31:47] Guest: Kenny Whitelaw-Jones: Yeah, yeah, exactly.
[00:31:48] Host: Paul Barnhurst: The things we learn in kindergarten.
[00:31:49] Guest: Kenny Whitelaw-Jones: Exactly right. They were our Sunday school teachers were on to something.
[00:31:54] Host: Paul Barnhurst: Yeah, it's funny how often that's true. The things that were like, you look at it and go, hey, what's really important? Oh, those things they taught me way back when. All right. So what's the most unique or funniest kind of funniest thing you've created in your personal life? Using Excel?
[00:32:12] Guest: Kenny Whitelaw-Jones: Using Excel.
[00:32:14] Host: Paul Barnhurst: It could be Google Sheets if you want.
[00:32:15] Guest: Kenny Whitelaw-Jones: Okay, I'll go with Excel because I generally can't use Google Sheets. I keep trying, I'm like, where's my shortcut keys? Nothing works. I made a, I'm not sure I'd call it a model, but, you know, there's a broad, broad definition of model. Yeah. We're using.
[00:32:30] Host: Paul Barnhurst: A great.
[00:32:31] Guest: Kenny Whitelaw-Jones: Spreadsheet for Christmas Day once, which was like, because I had different people coming for dinner with different dietary requirements and different, like, different allergies. And so I wanted to get the timings for everything I was cooking done and the quantities I had this great spreadsheet for, for all of that, like, it was really a thing of beauty. And my Christmas dinner was fabulous.
[00:32:51] Host: Paul Barnhurst: You know, I'm gonna have to start asking guests to send me these models, and I'm gonna have to put them on the guest I had last week. Last Monday, he built one for his upcoming marriage to help them know how they were doing and had a dashboard and asking each other questions. And I'm like, how did your wife take that? You know, or future wife? She didn't quite appreciate it as much as I did.
[00:33:14] Guest: Kenny Whitelaw-Jones: She didn't, she didn't appreciate the work that had gone into that.
[00:33:18] Host: Paul Barnhurst: Yeah. It was pretty funny. So we got Christmas dinner. I think my favorite was the guy who built one to track how long, how often people were going to the bathroom or something. The bathroom track.
[00:33:30] Guest: Kenny Whitelaw-Jones: I mean, that sounds a little bit creepy, if I'm honest. Never mind.
[00:33:32] Host: Paul Barnhurst: Well, yeah, I did think it was a little creepy. I can't remember the exact names. Let's not name names on that one. Oh I'm not.
[00:33:39] Host: Paul Barnhurst: You can find the episode.
[00:33:41] Host: Paul Barnhurst: He talked about it. You can track him down. He's in the UK. I'll leave it at that.
[00:33:47] Guest: Kenny Whitelaw-Jones: Alright. Great to know that. Alright.
[00:33:51] Host: Paul Barnhurst: So now we're going to move on to rapid fire. I know you've heard the show, so you know basically how this works.
[00:33:56] Host: Paul Barnhurst: I'll run through the ground.
[00:33:57] Guest: Kenny Whitelaw-Jones: I know the format.
[00:33:58] Host: Paul Barnhurst: I know it depends. So you got to pick your choice. You're killing me.
[00:34:03] Host: Paul Barnhurst: Sorry. And then at the end, you can elaborate on a couple. That's the fun.
[00:34:06] Host: Paul Barnhurst: If I give you it depends. You're going to be a consultant.
[00:34:08] Guest: Kenny Whitelaw-Jones: Exactly.
[00:34:09] Guest: Kenny Whitelaw-Jones: Everything's an. It depends. Right? For the consultant.
[00:34:11] Host: Paul Barnhurst: Yeah. All right. Circular references. Yes or no? No.
[00:34:16] Host: Paul Barnhurst: VBA?
[00:34:17] Guest: Kenny Whitelaw-Jones: Yes.
[00:34:18] Host: Paul Barnhurst: Do you prefer horizontal? So lots of sheets or a vertical model? Kind of stacking all your schedules in one sheet?
[00:34:24] Guest: Kenny Whitelaw-Jones: Horizontal.
[00:34:25] Host: Paul Barnhurst: All right. Using not fully dynamic, but using dynamic arrays in models. Yes or no?
[00:34:32] Guest: Kenny Whitelaw-Jones: Yes.
[00:34:33] Host: Paul Barnhurst: Okay. External workbook links. Yes or no?
[00:34:36] Guest: Kenny Whitelaw-Jones: Never.
[00:34:38] Host: Paul Barnhurst: I get that one from time to time.
[00:34:39] Guest: Kenny Whitelaw-Jones: Never, ever.
[00:34:41] Host: Paul Barnhurst: What was that again? Was that never? Named ranges. Yes or no?
[00:34:47] Guest: Kenny Whitelaw-Jones: Yes. If I'm allowed to elaborate later.
[00:34:50] Host: Paul Barnhurst: And yeah, you could elaborate on that. I already know your answer on fully dynamic models. Not there yet. Do you follow a formal standards like one of these boards, like smart or Fast or Faster when you're building.
[00:35:00] Guest: Kenny Whitelaw-Jones: We fail fast.
[00:35:01] Host: Paul Barnhurst: Fail fast. All right. Perfect. Do you believe financial modelers should learn Python in Excel?
[00:35:06] Guest: Kenny Whitelaw-Jones: Yes.
[00:35:08] Host: Paul Barnhurst: How about Power Query?
[00:35:09] Guest: Kenny Whitelaw-Jones: Yes.
[00:35:10] Host: Paul Barnhurst: Power BI?
[00:35:11] Guest: Kenny Whitelaw-Jones: Yes.
[00:35:12] Host: Paul Barnhurst: All right, so we got three yeses. Let's see if we can get a fourth. I'm going to guess we don't. Will excel ever die?
[00:35:17] Guest: Kenny Whitelaw-Jones: Well, at some point the sun is going to blow up and we're all going to die. So to that extent, yes. But before then, probably not, because I think Microsoft are going to keep innovating it. And the thing that Excel does, you know, the problem that it solves is not a problem that's going to go away. So I think not in our lifetimes, is my answer.
[00:35:36] Host: Paul Barnhurst: Yeah. You're not the only one who said that. I had a few others said, I hope it's not in my lifetime, because then I gotta relearn a lot of stuff.
[00:35:45] Guest: Kenny Whitelaw-Jones: I'm going back to school.
[00:35:47] Host: Paul Barnhurst: Do you think AI will build the models for us in the future?
[00:35:50] Guest: Kenny Whitelaw-Jones: Yes. Or at least they will instruct software that builds the models. Yeah, they'll play some kind of intermediary interpretation and instruction role, or maybe just build the whole thing? I don't know.
[00:36:01] Host: Paul Barnhurst: All right. Sheet cell protection. Yes or no? No. All right. Do you believe financial models are the number one corporate decision making tool?
[00:36:11] Guest: Kenny Whitelaw-Jones: No.
[00:36:12] Host: Paul Barnhurst: What is.
[00:36:13] Guest: Kenny Whitelaw-Jones: Intuition?
[00:36:15] Host: Paul Barnhurst: Yeah, that's usually the answer we get. My favorite answer I've had on the show is politics.
[00:36:18] Guest: Kenny Whitelaw-Jones: But that's also that. Yeah, but it's my intuitive answer about what the politically right answer decision is. Yeah.
[00:36:25] Host: Paul Barnhurst: It's a political way of saying politics. So for a financial modeler, what financial statement is most important for them to understand? PNL balance sheet or cash flow?
[00:36:36] Guest: Kenny Whitelaw-Jones: I have to choose. I have to choose one.
[00:36:38] Host: Paul Barnhurst: Yeah, you got to pick one. You can elaborate at the end on that.
[00:36:41] Guest: Kenny Whitelaw-Jones: Well, cash flow then.
[00:36:42] Host: Paul Barnhurst: All right. And then what's your lookup function of choice. Are you Vlookup. Xlookup. Index. Match.
[00:36:47] Guest: Kenny Whitelaw-Jones: Xlookup. Xlookup. Every time these days.
[00:36:50] Host: Paul Barnhurst: I like it, I'm a big Xlookup. All right. I know you wanted to elaborate on a couple. I think the first one was named ranges, so go for it.
[00:36:56] Guest: Kenny Whitelaw-Jones: Well, the name range in the VBA kind of go together like so I would want to use VBA sparingly in a model. I never want to see the logical flow of a model being kind of determined by VBA. I want it to do things that are little tasks that speed up our lives and make our lives easier. And for that you need named ranges, right? Vba work. Other than that, I mean, it's simply load models that are built completely with named ranges. It makes me want to smash myself in the face. I can't stand it. And so, you know, VBA and named ranges both sparingly, I'd say.
[00:37:28] Host: Paul Barnhurst: That was that smash yourself in the face.
[00:37:30] Guest: Kenny Whitelaw-Jones: Just punch myself right in the face. It drives me crazy.
[00:37:34] Host: Paul Barnhurst: You know, I'm going to send you a model that's nothing but named ranges.
[00:37:38] Guest: Kenny Whitelaw-Jones: I've seen them, I've seen them. I don't need that in my life. I've seen that I'm trying to stay away from it. You know, I'm older now. I'm trying to live a calm life.
[00:37:44] Host: Paul Barnhurst: You know, I really think I should get every guest to send some kind of model and start putting them up on the site. Could be kind of fun.
[00:37:51] Guest: Kenny Whitelaw-Jones: Yeah, yeah. Or send somebody else's model that they seem that they really hate it and take it apart.
[00:37:56] Host: Paul Barnhurst: Yeah. All right. I think there was one other you wanted to elaborate on in there.
[00:38:03] Guest: Kenny Whitelaw-Jones: Which one was that? I think it was the financial statement one, I think I think all three are essential. I mean, they're just essential just to get it, just just, you know, if you're only building a cash flow and that can be good for a quick and dirty analysis, that can be good. But if you're doing something serious, you need all three. And all three tell you something different. You know, all three tell you something different. I do think, though, that one of the benefits of spending some time as a modeler, even if you go on to other things in your career, which lots of people do, they kind of start out in modeling and then progress on to, you know, other, other things. Spending that time in modeling I think it really gives you a good intuitive understanding of how numbers move together on the financial statements. You know, having an being able to have a strong expectation of, well, if this change in the income statement that's going to change in the balance sheet, that's going to change in the cash flow and having that Intuitively available to you, because I think you then can smell out numbers that don't make sense a lot easier. And I think that's a useful skill set.
[00:38:59] Host: Paul Barnhurst: I completely agree. Understanding the flow between the models and being able to relate that back to business, like, oh, we extended our credit terms. What does that mean? Okay, well sales may go up, but your cash is going to be delayed. Well what impact does that have on everything else. And do I have to borrow more? What's the rate? You start running it all through and you're like, maybe that's not a bad idea. Or maybe we should do that. Right. But without being able to understand the flow and think through all the impacts, it's really hard to say if that's a good or bad idea.
[00:39:30] Guest: Kenny Whitelaw-Jones: So when I'm teaching modelers, I'm always banging on about always have a hypothesis before you make a change in your model, what do you expect to have happen? Because if that thing doesn't happen, you know one of two things are right. Either your hypothesis was wrong and you don't really understand the flows or your model's wrong. And both of those things are good information. Whereas I see it so many times that, you know, somebody will run some numbers on the model. The model tells them an answer and they'll get busy rationalizing what the model tells them and coming up with a story to make sense of what the model tells them, which is all the wrong way round.
[00:40:02] Host: Paul Barnhurst: Yeah, that's the worst one. And I've definitely done that. Sometimes I'm really good at thinking on my feet, and there's more ones where I'm like, yeah, I still remember in grad school we did this case, this accounting case, and I told everybody this, this has to be the answer. And, you know, we were really struggling with it. We even asked the professor, and the professor was like, you guys aren't able to solve it. I'm guessing someone's dominating the conversation. That was me. Everybody went and wrote it up the way I said. I went home and thought about it some more and I go, logically, that just can't be right. And I completely changed my answer. I got the A and like half the class got like a C on it. They did not that day.
[00:40:35] Guest: Kenny Whitelaw-Jones: You got an A, but you had no friends. For the rest of that term. You were sunk.
[00:40:38] Host: Paul Barnhurst: Yeah. They were not happy with me. But I just went home and I kept thinking, I'm like, this can't be right. I had to be not thinking about this. Right? And so I put it on. It was pretty funny.
[00:40:47] Guest: Kenny Whitelaw-Jones: But that's true. I love that story.
[00:40:49] Host: Paul Barnhurst: Yeah. So not a good way to do it. All right. We're going to do one more fun question. Then we're going to wrap up. This is a surprise for you.
[00:40:55] Guest: Kenny Whitelaw-Jones: A surprise one that's not in the contract.
[00:40:57] Host: Paul Barnhurst: One. If you could not do modeling for the rest of your life, you could no longer be a modeler. Anything to do with financial modeling. What would you do for a career?
[00:41:05] Guest: Kenny Whitelaw-Jones: I'd be a psychotherapist.
[00:41:07] Host: Paul Barnhurst: I'm not sure if I should be scared or excited by that. Why is psychotherapist?
[00:41:13] Guest: Kenny Whitelaw-Jones: Because I find people fascinating. I'm actually training kind of part time to do that, and I find people fascinating. And it's really interesting how my own interest has progressed over the years. I still love financial modeling, but even in running grid lines, my primary motivation now is more about the people and the team and the well-being and like the culture within the company. And it's just part of how I've evolved as a person. I just find that stuff really, really, really interesting. So that's what I'd be doing.
[00:41:39] Host: Paul Barnhurst: Cool. I like that one. All right. If you could offer one piece of advice to our audience to become a better financial modeler, to be better at better at financial modeling. What's going to be your one piece of advice? Be a psychotherapist? Or is it something else?
[00:41:51] Guest: Kenny Whitelaw-Jones: It's going to be a psychotherapist. I think it's around the soft skills. Just don't think that, you know, it kind of comes back to I've said to people like, just because you're good at just because you're good at using Microsoft Word, it doesn't make you a good writer. You know, just because you're good at Microsoft Excel, it doesn't make you a good modeler. You know, there's a lot more to it than that. And understanding the breadth of it, you know, understanding how to communicate stuff really effectively, that requires you to understand who you're communicating to and what their interests are. And that gets into the politics. What constraints are they under? You know, just that interpersonal soft skill stuff of knowing who you're dealing with, knowing your audience being, you know, there are some really simple but effective, you know, data visualization skills that are not difficult to learn. But man, they make a difference when you come to actually presenting data. So it's like learning that stuff, learning that actually nobody cares about your model. Like they don't care about how you're, you know, our clients don't really know there's exceptions here, but they don't really care about how we've structured the model. They just want to know the answer. They just want to know, you know, what is the model telling them. And we get so relaxed about our, you know, the axle about are we going to use Vlookup. Are we going to use index match. We get all, we get ourselves all upset about that stuff and nobody cares really.
[00:43:06] Host: Paul Barnhurst: You know, I hate when people are like, if you use Vlookup, you're stupid. It's creating risk. If you use Xlookup then you're smart, you're new in Excel and I'm like, understand the differences between them, know the strengths and weaknesses and use what works and move on. Like I could care less. I don't assume a model is bad just because it has Vlookup or Xlookup or index match. Now are there trends you can start to figure out? If somebody's always using really old formulas? They probably can start to assume either they haven't updated themselves, maybe they don't know excel as well. There could be some risks, but in general, this is a dumb argument. Like. Like I said, focus on the soft skills.
[00:43:46] Guest: Kenny Whitelaw-Jones: Yeah, absolutely.
[00:43:48] Host: Paul Barnhurst: All right. Last question. If our audience wants to learn more about you or you know, your company gridlines, maybe get in touch with you, what's the best way for them to do that?
[00:43:56] Guest: Kenny Whitelaw-Jones: Go to gridlines.com that's our website. All our stuff is on there. They can reach me. They can reach out directly by email kenny@gridlines.com. Those are the two best places to find me or look me up on LinkedIn. Yeah. Kenny Whitelaw-Jones on LinkedIn. I'm forever posting, you know, dumb stuff on LinkedIn.
[00:44:13] Host: Paul Barnhurst: Aren't we all? I post stuff, so I understand. In fact, I'll post this interview in a few weeks. I hope it's not dumb stuff, but I will post it.
[00:44:20] Guest: Kenny Whitelaw-Jones: Hope so.
[00:44:22] Host: Paul Barnhurst: No, I thought it was great. Thank you so much for joining me Kenny. Enjoyed chatting with you and I'm hopeful our audience will enjoy it just as much as I did because I had a great time. So thanks for coming on.
[00:44:31] Guest: Kenny Whitelaw-Jones: I'm really grateful for people that do things in the financial modeling space, to open up conversations, to build the profile of financial modeling as a thing, as a profession. And so I'm really grateful to you. I'm grateful to the Financial Modeling Institute for the work that they do in that area. They've really brought some transformational change to the space, which I really admire. So thank you for the work that you do as well.
[00:44:50] Host: Paul Barnhurst: Well, thank you, I appreciate that and keep building those projects. You bet. Some more hospitals, schools, energy, all that stuff.
[00:44:57] Guest: Kenny Whitelaw-Jones: We need all of that.
[00:44:59] Host: Paul Barnhurst: All right. Thanks.
[00:45:00] Guest: Kenny Whitelaw-Jones: Thanks, Paul.
[00:45:01] Host: Paul Barnhurst: Financial Modelers Corner was brought to you by the Financial Modeling Institute. This year, I completed the advanced financial Modeler certification, and it made me a better financial modeling. What are you waiting for? Visit FMI at www.fminstitute.com/podcast and use Code Podcast to save 15% when you enroll in one of the accreditations today.