Episode 15: From Classroom to Certification: Andy Temte's Unique Perspective on Financial Modeling
Show Notes
Welcome to Financial Modeler's Corner (FMC) where we discuss the art and science of financial modeling with your host Paul Barnhurst. Financial Modeler's Corner is sponsored by Financial Modeling Institute (FMI) the most respected accreditations in Financial Modeling globally.
In this episode, Paul Barnhurst is joined by Dr. Andy Temte.
Dr. Andrew Temte, CFA, is the former CEO of Kaplan Professional and author of “Balancing Act: Teach, Coach, Mentor, Inspire,” and "The Balanced Business: Building Organizational Trust and Accountability through Smooth Workflows." He is also a board member and senior advisor at the FMI.
A thought leader on financial education and issues related to organizational health, continuous improvement, and workforce re-skilling, his articles have appeared in a number of media outlets, including Chief Executive and Chief Learning Officer.
This blend of higher education and professional education experience gives Dr. Temte a unique perspective when it comes to financial education and financial modeling
Listen to this episode as Andy shares:
· His learning from the worst models he has come across.
· His experience reviewing financial models for acquisition targets
· His experience as a Member of the Board of FMI.
· The value of Financial Modeling Accreditation.
· Everything about his book ‘The Balancing Act’.
· His motivation to start a Podcast.
· His position on controversial modeling issues, including circular references, dynamic arrays, modeling standards, AI in modeling, and more.
Quotes:
“FMI is one of the only institutes that’s delivering a truly experiential credentialing process.”
“At the end of the day, modeling is about communication because you're helping communicate insights, derived from data and assumptions to drive behavior or changes or decisions. And so it's all about communicating.”
Sign up for the Advanced Financial Modeler Accreditation or FMI Fundamentals Today and receive 15% off by using the special show code ‘Podcast’.
Visit www.fminstitute.com/podcast and use code Podcast to save 15% when you register.
Go to https://earmarkcpe.com, download the app, take the quiz, and you can receive CPE credit.
Follow Andy Temte:
LinkedIn - https://www.linkedin.com/in/atemte/
Podcast - Balancing Act
Website - https://www.andrewtemte.com/
Andy’s books:
Follow Paul:
Website - https://www.thefpandaguy.com/
LinkedIn - https://www.linkedin.com/in/thefpandaguy/
Instagram - https://www.instagram.com/thefpandaguy/
TikTok - https://www.tiktok.com/@thefpandaguy
Twitter - https://twitter.com/TheFPandAGuy
YouTube - https://www.youtube.com/@thefpaguy8376
Follow Financial Modeler's Corner
LinkedIn Page- https://www.linkedin.com/company/financial-modeler-s-corner/?viewAsMember=true
Newsletter - Subscribe on LinkedIn- https://www.linkedin.com/build-relation/newsletter-follow?entityUrn=7079020077076905984
In today’s episode:
(00:22) Intro;
(00:46) Welcoming Andy;
(01:05) The worst financial model Andy has ever seen;
(01:52) Andy’s key learning experience from the worst financial model;
(02:45) Andy’s background;
(05:07) Andy’s journey as a professor;
(07:16) Andy’s motivation to teach Finance;
(11:02) Time at Kaplan;
(13:55) Andy’s views on the CFA program;
(17:27 - 18:13) Validate your Financial Modeling Skills with FMI’s Accreditation Program (ad);
(18:18) Andy’s experience as a Member of the Board of FMI;
(20:03) Value of Financial Modeling Accreditation;
(25:23) Andy’s motivation behind writing the book “The Balancing Act”;
(33:17) What motivated Andy to start a Podcast?;
(34:54) Rapid Fire;
(37:27) Advice on being a successful Modeler;
(39:32) Connect with Andy;
(40:10) Outro.
Read the Transcript
Host: Paul Barnhurst
Welcome to Financial Modeler’s Corner, where we discuss the art and science of financial modeling with your host Paul Barnhurst. Financial Modeler’s Corner is sponsored by Financial Modeling Institute.
Welcome to Financial Modeler’s Corner. I am your host Paul Barnhurst. This is a brand new podcast where we talk all about the art and science of financial modeling with distinguished guests and modelers from around the globe. The Financial Modeler’s Corner Podcast is brought to you by Financial Modeling Institute. FMI offers the most respected accreditations in financial modeling.
I'm thrilled to welcome our guest on the show today, Andy Temte. Andy, welcome to Financial Modeler’s Corner!
Guest: Andy Temte
Thanks for having me on the show, Paul.
Host: Paul Barnhurst
Well, thank you. I'm excited to have you on. I know I got the opportunity to be on your show a while back and now I get to have you, so I'm really excited. We like to start off the show, we ask every guest this with kind of a fun question, tell me about the worst financial model you've ever seen.
Guest: Andy Temte
So the worst financial model that I ever saw was part of an acquisition process, and it showed up on my desk handwritten on a piece of paper. So it wasn't even in any kind of program. You're supposed to make decisions about buying another company, bringing teams of people on board from a piece of paper? I don't think so!
Host: Paul Barnhurst
That would be tough. And was it in pretty good shape even though it was on paper or was it a total mess?
Guest: Andy Temte
It was a mess.
Host: Paul Barnhurst
Yeah, that's an easy decision. I'll ask this, I'm curious to see what you'll say, what was the learning experience from that one?
Guest: Andy Temte
Well, I was the chief executive of Kaplan Professional, Kaplan's a learning organization, so everything is about learning and growth, and the learning experience was going back to that individual and saying, okay, we're going to make a pretty big decision here, there's capital at risk and we need more rigor, and I would like for you to learn more about what a proper financial model looks like and gave that individual some time, come back and revisit. So, try to really treat everything as a learning experience.
Host: Paul Barnhurst
I love that, that's a great motto to live by is treat everything as a learning experience because it definitely allows us to grow a lot more than if we don't.
Guest: Andy Temte
That's right.
Host: Paul Barnhurst
I like that! So now can you just tell the audience a little bit about yourself and your background? Just tell us a little bit about you and what you're doing today.
Guest: Andy Temte
Yeah, so I'm sitting here along the beautiful Mississippi River in western Wisconsin in a town called Lacrosse, kind of halfway between Minneapolis, Minnesota, and Madison, Wisconsin. Born and raised here, spent seven years of our lives, the only other town we lived in was in Iowa City, Iowa, doing masters and Ph.D. there.
I wanted to be a finance professor. My purpose in life is to teach coach, mentor, and hopefully inspire a few along the way. So I wanted to be a finance professor, and then I met a guy named Carl Swaser. Carl was the head of the finance department at the University of Iowa. He was starting this little business called the Swazer CFA Study program to help students study for the Chartered Financial Analyst Exam. I was there. I was hungry, I was eager. He hated writing about economics. I had an economics undergrad, and I said, let me write the econ notes for you, and we did that the first year and the rest is history.
We sold our business in 1999 to Kaplan, and then I spent 22 years leading various parts of the Kaplan organization. So it's been quite a journey of teaching and traveling the world and just getting to know all sorts of folks from different backgrounds. It has been a journey.
Host: Paul Barnhurst
That's a great story, and I remember when that sell happened, I didn't realize it was quite 25 years ago, but I remember thinking, oh, Kaplan just bought them, so they'll go away because I remember thy didn’t want another one of them out there at this point. I think it was still 99, yeah, I was still in college, hadn't quite graduated yet. I remember that happening, so, you know, time flies, that's for sure.
Guest: Andy Temte
Yeah, and the Swazer brand is still prominent in the CFA exam market. It was one of my goals as the leader to keep that name because it had such resonance in the market.
Host: Paul Barnhurst
Yeah, I know, Swazer definitely has resonance, and exactly it's the CFA market is where I always knew about it, I know that's where their core bread and butter was. So that makes a lot of sense.
So, you answered this a little bit, you mentioned originally you wanted to get the PhD to be a finance professor, so you did that for a couple years, right? Did you teach for a few years at Iowa before you started the business? Yeah.
Guest: Andy Temte
So I taught as a graduate student primarily at the University of Iowa and then as an adjunct for a semester after graduation, and then I've taught out here at my undergraduate alma mater, which is the University of Wisconsin Lacrosse, so I've been in the classroom, but the classroom that really energized me was standing in front of a room of folks who want to earn the CFA designation, and boy, talk about a difference in motivation. You stand in front of 30 college undergraduates, some of which are sitting in the back with their feet up on the desk back then, a paper copy of the USA Today in their hands, kind of listening out the side of their ear versus a hotel ballroom with 200 CFA candidates all at the edge of their seat, wanting to know the next thing that's going to come out of your mouth.
So it was very serendipitous that is able to fall into that kind of teaching in a professional education setting. It's really rewarding.
Host: Paul Barnhurst
Sure, I could see the difference. I mean, one, people are very motivated. They spent a lot of money, often jobs depend on whether they can get it or not. And so you just have a different level of interest than somebody, especially the person that may be at college, his mom and dad are paying for it, I'm living at home, and I have no desire to be in school, I just want to go party at night, but I'm in the classroom.
Guest: Andy Temte
Yeah, that was the kid sitting in the back of the room with the paper copy of the USA Today in their hands. Mom and dad are paying for it, and they're just like, yeah, yeah, yeah, whatever.
Host: Paul Barnhurst
Yeah, exactly, we've all seen them, so I could totally see that different, I do some, you know, professional training as well, so I know what you're talking about.
All right, so you spent most of your career as an educator. You did University of Iowa, you did the CFA charter program. What motivated you to work as an instructor? Where does that come from, and especially teaching finance. What's kind of the motivation and reasoning behind that?
Guest: Andy Temte
Well, I'll get to the why finance part in a bit, but I grew up in a musical family, in a performance family, so stage productions. My mom and dad trotted me and my two sisters out like we were the family Von Trap when I was, you know, Sound of Music reference there, six years old, and we're supposed to sing for a party. So performer, musician, that was my formal training, and found out that it's just not that far of a leap from the stage and from a choir into the classroom. Being an instructor, being a professor, is kind of half performance art and half education. There's a reason that people talk about Edutainment, because contrary to some opinions, it really does matter from a student engagement perspective.
So I just really liked doing all the work on the front end to take really complicated bits of information, put them into a coherent framework, and then pass that on to folks that had almost no baseline for what I was talking about. So that was just really motivating for me.
Host: Paul Barnhurst
Got it! It's great that it motivated you, and I do remember in your book talking about music and the role it played in wanting to, when you were younger, have a career in music there, I think, and then ended up deciding it was time to go to college.
Guest: Andy Temte
Yeah, that would have been nice to be able to do a career in music, but you asked me a specific question about why finance. I started out as an economics undergrad. One of my great mentors was a professor in the econ department, and I was going to go get a master's in PhD. He said, jump over the hall into the finance department. Those faculty members at the time were making 20,000 or $30,000 a year more, and it's essentially the same or very similar content.
So I made the switch over to finance to support my family maybe a little bit better than I would have been able to do as an econ prof.
Host: Paul Barnhurst
So you ran the numbers and said, okay, same amount of time, similar work, and I make 30% more on average. As a finance or econ person, it's a pretty easy analysis from a strictly numbers perspective, for sure.
Guest: Andy Temte
That's right.
Host: Paul Barnhurst
I can see your guitar in the corner there. Do you still play a lot?
Guest: Andy Temte
Yeah, I'm currently in a band called “The Remainders”. Our motto is rocking out and doing good. So we play shows in our local area for various philanthropic organizations and local festivals. We're a go big or go home kind of an act. So we've got a big stage production and we've actually got some original music out on Spotify and Apple music, et cetera. So your listeners can go out and find us. We are “The Remainders” from here in Lacrosse, Wisconsin, we have five original songs out.
Host: Paul Barnhurst
Great, well, I'll have to find those, we'll have to make sure we put those in the show notes so people can enjoy them. So that's really cool!
So obviously you guys sold to Kaplan and you stayed on at Kaplan for 20 plus years. I know most of that was as the CEO of Kaplan Professional, and then you were also the head of corporate learning globally.
So can you talk a little bit about your time at Kaplan, what it was like, maybe some of the major things you worked on, and then just what kept you there for all those years at the top of the show?
Guest: Andy Temte
At the top of the show I indicated that my personal purpose is teach, coach, mentor, and hopefully inspire. Every day at Kaplan, I was able to wake up knowing that when I was driving into work or on the airplane to go see a client or one of our business units overseas, that today we were going to help people achieve their educational and career goals, that we were going to be helping to create these Yahoo moments for individuals and their families, helping them gain a credential to move up in their career, have more economic opportunity in their lives. And being in the education industry generally, whether you're part of a university system or in professional education like I was, there's not much more that's more satisfying than that in terms of a motivator to get you out of bed and get one's rear end into work.
So when I joined Kaplan back in 1999, the professional education part of the business was very, very small. Prior to the Swazer acquisition, they had acquired a company called Dearborn out of Chicago that did some real estate training and series seven, series 63, some insurance training. And during my tenure, we were able to build a truly global professional education and certification business that served tens and hundreds of thousands of students a year. So it was quite a ride.
Host: Paul Barnhurst
That's great. And did you find yourself getting to still teach a lot even though you were running things? Did you step in the classroom from time to time and get to be that instructor?
Guest: Andy Temte
Yeah, one of my great regrets, I got out of the classroom back in 2005 was the last time that I taught a class within the Kaplan Ecosphere because the leadership and management responsibilities were really taking over. Looking back at woulda, shoulda, coulda, it would have been wonderful to be able to carve out just a little bit of time to stay in the classroom. But I'm happy to report that next spring I'll be back in the classroom at the University of Wisconsin Lacrosse, teaching a course based on the book that hopefully we'll get a little time to talk about today.
Host: Paul Barnhurst
Great, yeah, I know we will get there in a few minutes. So that's exciting, that'll be great to be back in the classroom!
So I want to ask you a little bit, obviously at Kaplan, one of the big things is CFA. You obviously did a lot of material around that, knew a lot about that. Earlier this year, they announced one of the most significant changes they've made that I can ever remember, where they've added the practical skills section for level one and two right of the exam. It includes financial modeling, Python and I believe, data science.
I'd love to get your thoughts on that change, what you think about that, maybe how it would benefit people, why they did it, any kind of just thoughts in general on it.
Guest: Andy Temte
So I've got three words, hopefully this adds up to three: It's about time!
Host: Paul Barnhurst
That was my thinking!
Guest: Andy Temte
Look, you know, we're going to talk about Financial Modeling Institute a little bit later, but FMI is one of the only institutes that's delivering a truly experiential credentialing process. You have to build a financial model to pass that exam. You could pass the CFA exam by doing a lot of jam and cram into the old noggin, go in and regurgitate a bunch of stuff that you're never going to remember and all of a sudden walk out with some also, you had to have some work experience, but you were able to put the letter C, F and A behind your name. It is wonderful news that some experiential, some practical skills are starting to work their way into the CFA program. I'm so proud of what they're doing there, and I wish them all the best, and I hope they just keep going on this path to make the CFA process more directly connected in the flow of work, because I'm all about education and continuous learning in the flow of work, really making the CFA program more and more relevant.
Host: Paul Barnhurst
Yeah, so I never worked the investment side, I did level one and just decided I'm not going to work in investment bank or anywhere where I really need this, and kind of switch gears and ended up not doing the other two. But it definitely felt a little bit like the cram, right, and regurgitate it. Can you memorize all these formulas that you're never going to use in the form that you're memorizing and some of those type of things? Not to say it was bad, there's definitely good material, and you learn, But I just love that they're now adding more of the work, learning the experiential, as you mentioned, because learning needs to do that more in general, in my opinion, because the best way we learn is by doing things that we're going to apply in the job every day. Because if you don't apply the learning, you just forget it. You just did a memory dump.
Guest: Andy Temte
Look, the employer that's buying the talent and the assumption is somebody has the letter CFA behind their name, that they're going to be more valuable to the shareholders, to the stakeholders of the business, ultimately to the consumer. They're going to be able to hit the ground running faster than somebody that doesn't have those letters behind their names, and I think that's been a little bit of a question mark of whether or not that's actually true in the marketplace.
So, CFA Institute, again, really proud of them for taking this step so that a candidate can really truly differentiate themselves in the employment market.
Commercial break:
In today's business world, financial modeling skills are more important than ever. With Financial Modeling Institute's Advanced Financial Modeler Accreditation Program, you can become recognized as an expert in the field by validating your financial modeling skills. Join the Financial Modeling Institute's community of top financial modelers, gain access to extensive learning resources, and attain the prestigious Advanced Financial Modeler Accreditation.
Visit www.fminstitute.com/podcast and use code PODCAST to save 15% when you register.
Host: Paul Barnhurst
So you mentioned Financial Modeling Institute and what they're doing and how you love it. So last year you joined the board of FMI, and I know at the time you talked about how excited you were to help advance the message globally of the importance of financial modeling. So how's that experience been? Like, what have you learned, maybe done? How's it been for you? It's been 18 months now?
Guest: Andy Temte
Yeah, it's been 18 months. Ian Schneer is the big brain behind the whole FMI thing, he's been on your show. I recommend that all of your listeners connect with Ian on LinkedIn and learn more about him. I've been in and around the financial modeling education world for quite some time, and I looked at several acquisitions while I was still at Kaplan trying to enter that marketplace, and I'm so proud to be affiliated with and be able to serve on the board to help grow the Institute and give back whatever I can from my years of experience in Credentialing and higher education to make sure that Credential is as impactful and valuable to its holders as it possibly can be.
Host: Paul Barnhurst
That's great. So it sounds like you definitely were in and around and looked at a number of financial modeling things, always saw the value of that in the overall process, and sounds like the experiential learning that FMI does is another thing you loved that idea of, okay, if you got the credential, you've proven you can build a model. I don't need to question whether you have that skill or not. Whereas with some others it's like, okay, I know you're good at memorizing or I know you've learned this, but am I sure you can do the job? And so it feels like that's something you really like about it.
And so maybe speaking to that, why do you think people should consider earning that accreditation? What do you think the value having a financial modeling accreditation brings for people in the finance field? Because just about everybody in finance, whether it's corporate investment banking, you're going to do some modeling at some point. It's just a matter of when, not if.
Guest: Andy Temte
Well, look, when you're in business and I don't care what industry you're in, I don't care if you're an accountant, a finance professional, a business leader, you're making decision after decision after decision. We make hundreds, if not thousands of decisions a day. Many of them we're aware of, but the ones that we're consciously aware of in the flow of work, almost all of them have some connection back to the financial performance of the business. And I've just seen in my personal experience in business all around the world, folks get caught in the trap of emotion. They get caught in the trap of ego as it relates to decision making that I feel that X, Y, or Z is a good investment and yes, your feelings matter, But should we be making big decisions about the application of the capital, either human or physical or monetary capital, that's going to be applied on a hunch and a whim? And I've seen that movie over and over and over again and then things go badly and everybody looks around their shoulders, points their fingers in multiple directions and then asks the question, well, why didn't we have more financial rigor behind our decision making?
So it is time to really make financial modeling an essential baseline, got to have for, again, not just acquisitions, not just big capital machinery or building purchases, but our budgetary processes in companies. A lot of the underpinnings in a company's budgetary process are also based on those whims and I lick my thumb and I stick it up in the air or I'm looking at some historical trend and assume that that's going to continue into the future. Man, we just need a lot more rigor here.
Host: Paul Barnhurst
I 100% agree, and two things come to mind. First is I still remember asking somebody, I wasn't there at the time, or I was there, but I wasn't involved in it, they were exploring bringing in a company, right? A couple of companies, it was a big transaction where would be folding in multiple companies. And I asked him, I go, did it make sense? He goes, no, that thing was sprinkled with unicorns and rainbows and it still didn't make sense. But they wanted it done and it ended up falling apart. Good thing it fell apart. It was one of those where it's like, yeah, they threw out the whole rigor process and just kept making assumption after assumption because somebody had a feeling that this is what we should do.
Guest: Andy Temte
And I want your listeners to understand that I'm not just preaching and I've done it, all right my whole career. I have made those gut-based decisions. I have let ego and emotion get in the way of decision-making. So when I point a finger over here, I know that three more are pointing right back at me. And if your listeners get anything out of this episode, just remember that and have a bit of humility, be vulnerable, know that you're going to make mistakes. It's okay as long as you learn from them and move forward.
Host: Paul Barnhurst
You and me both. When we talk about just the importance of modeling, I look back at a lot of the models I built, just garbage. And it's because I wasn't taught good design principles. I didn't know what I was doing. I'm now going to be taking the FMI here soon, I was originally signed up to take it in 2020, COVID hit and it got canceled. I kept delaying it. Then my work got so busy, I put it on hold. And so when we started this podcast, one of the first things Ian said to me is, you do realize you're going to have to do the AFM, right? Let me finish, because I just did the FP&A Certification with AFP. Like, let me finish that one first, then we can talk about when I'll take yours. I'm not doing both in my full-time job. But he was great about it.
The day I posted that I'd finished it, I knew it was coming, I look at the comments on LinkedIn and we've been waiting for you and it's Ian and I just kind of laughed.
Guest: Andy Temte
So there you go.
Host: Paul Barnhurst
Got to do that. I'm excited. I mean, I built models, but I don't do a lot of three-statement modeling because I work for large companies and that's not a typical thing. So I'm like, I'm going to have to bone up here a little bit and make sure I'm really polished to do it in 4 hours. Well I'm excited for it, it'll be good.
Moving on, just kind of changing subjects a little bit. I know we mentioned this earlier, but you've written a few books. You have the most recent one that's getting ready to come out is called The Balance Business. I believe it's building organizational trust and accountability through smooth workflows. I actually have it back here, your other one's upstairs at the moment.
Guest: Andy Temte
Awesome.
Host: Paul Barnhurst
So tell us about the book, what motivated you to write that book?
Guest: Andy Temte
So my first book is called Balancing act- Teach, coach, mentor, inspire. It's a business book/autobiography. I tell the story of a series of balancing acts that we play in our lives both personally and professionally. The arc of that book finished with a focus on the balancing act between trust and accountability in organizations, and we're out of balance on that front right here, here in 2023, and what I mean by out of balance is the pendulum has swung toward organizational health and everybody liking each other and working well together and we want to build that organizational trust. And accountability has kind of taken a bit of a backseat over the last few years.
So to have an organization where trust really shines, you must have proper accountability frameworks in place because trust is like a ladder. And if accountability is challenged and if you're on the top rung and something goes wrong, you go right down to the bottom just like that of that trust ladder. So having those proper accountability frameworks in place is important.
So what I'm all about is the blend of organizational health and continuous improvement, so what I do is I bring those two practices together into a management operating system that you can install at your business. So the second book is a how to and it contains all the stuff that you need you must have in your management operating system and none of the stuff that you don't. So it's a very no-nonsense book. And I start right off. I try to punch everybody right in the nose with the concept of the accidental manager. I'm an accidental manager. There are millions of us who've been tapped on the shoulder and said, oh, you were really good as an individual contributor. Would you like to manage five people? Sure. And then how are you going to do that?
Host: Paul Barnhurst
You're going to pay me more?
Guest: Andy Temte
Right! And then it's like, okay, how do I do this? All of a sudden, then again, ego takes over, we all fall into firefighter mode and hall monitor mode and we really haven't been trained on how to lead people. So that's the kind of secondary thread that runs through the whole book, is this concept of the accidental manager. How you get there and how you move past being an accidental manager.
Host: Paul Barnhurst
I'm excited to dig into it and read more about that. But one thing I really liked is you talked about that is just the importance of accountability, right? For organizational health and trust, you have to have both. And a big fan when we teach FP&A courses, often teach about business partnering, and one of the first things they teach is how it's about trust. And this is a quote I heard back when I was 20 and I love it for the concept. Some people will say, well, that doesn't quite make sense, But it said: “it's better to be trusted than to be loved”. And the example they gave is, as a parent, you're always going to love your child, doesn't mean you're going to trust them. You might always want what's best for your employee and like the person, but that doesn't mean you're going to trust their work. And so it's just the idea that it's harder to earn trust, as a general rule for most healthy relationships than to be given love, because people by nature, especially when it's family, will love them.
Guest: Andy Temte
And how do you earn trust? You deliver what you've promised on time in a form that the recipient can use and move forward, and you do that, repeatably, reliably through time, no-nonsense, and be a good colleague. You don't need to make friends with everybody at the office. And one of the things I talk about, it's kind of a side point in the book, but your coworkers are not your family. And people get the kind of, oh, I work in this wonderful organization. It's like a family. No! Families are messy, families are hard. You don't want to bring all that into the world of work. Why would you want to do that?
Host: Paul Barnhurst
Yes, families are messy. And the whole, you know, the other example I give is we've all had the coworker we'd love to go have a drink with, but we don't want to work on a project with them.
Guest: Andy Temte
Right!
Host: Paul Barnhurst
Why? It has nothing to do with whether you like them or not, it has to do with the trust factor. They're not delivering results, you don't trust them to deliver.
Guest: Andy Temte
That's right.
Host: Paul Barnhurst
And so, yeah, I really like that, and I think that's a great balance, and I agree with you. Sometimes we get too focused on the organizational health, and it's finding the right balance, because you can't be truly efficient in an organization without both of them. If you have a toxic culture, but you're delivering a lot and you're holding people accountable, you're going to have a revolving door, and it's going to hurt you over time. And if you have great health but you're not holding people accountable, your financials aren't going to support it over time. One or the other is going to be out of balance.
Guest: Andy Temte
Yeah, and the person that ends up paying for it all is your customer. And we lose sight of the customer as our North Star so often in business, it seems so easy and so kind of, well, duh, but the customer gets left behind so often in this world because we get wrapped up in internal politics and internal workflows, and we kind of forget that everything that we're doing is to create stickiness and value for the customer and.
Host: Paul Barnhurst
To bring that back for all our finance people that are listening, who you're delivering that model to is the customer. If you're doing FP&A and the CFO could be your customer, the salesperson you're supporting. If you're doing investment banking, you got to look at it and go, I love how somebody said it goes, “Your spreadsheet is not the product. The insights you're giving the business, that's your product”.
Guest: Andy Temte
Right.
Host: Paul Barnhurst
The spreadsheet is just a delivery method, and that's just so true. And I think sometimes we forget that when you're “well, I'm just in a support role”. No, you still have a customer, and yes, there's an end customer as well. You should know them, but you should also know who your internal customer is.
Guest: Andy Temte
One of the things I talk about in the book and one of the things I like to coach folks on, especially in accounting, finance, technology as well, these roles where you can be pretty far away from the end, customer is to sit down with your team, sit down with yourself in a quiet place and really think about how does the work that I do every day add value along a value stream that ultimately gets delivered to the customer. And that's a game changer for a lot of folks because you can get lulled into a sense of, well, my work really doesn't matter to the end customer. But at NASA, when you're sending somebody up to the moon, everybody's involved. The janitor is involved in putting somebody on the moon. And once you start thinking like that as teams, as individuals, really good things happen.
Host: Paul Barnhurst
Great point. And so much of it is about mindset and we talk about this whole balancing act, that's the name of your podcast. Congratulations, I know you recently passed 100 episodes, so I'm curious what motivated you to start the podcast?
Guest: Andy Temte
So you are building an audience, I'm building an audience. The podcast really solved two things for me. One was from a marketing and a platform perspective, it's a really good way to get your message out there. But a really close second to that was staying connected to the community that I had built over decades. And there is something just uniquely satisfying about being on a show like this, reconnecting with a former colleague or somebody that I did business with in the past and working together again to create what I consider to be a public good, which is this totally accessible thing called a podcast that anybody can listen to at any time, for free or near free and glean some insight. So it connects right back to my purpose of teach, coach, mentor and hopefully inspire. So the podcast was a real no-brainer for me.
Host: Paul Barnhurst
No, it makes sense and I know I love doing it. It's a great way I get to learn from others. I get to meet amazing people all over the world and talk to them and hear their stories, things that I probably would never get to do otherwise with a lot of people I talk to. Like, I know the podcast is how we got to know each other. And so here we are for the second time. You getting to be on the other side of the mic, but it's great to do those types of things, so appreciate that.
So we're going to move into our second to last section here. It's what I call Rapid-Fire. So I have a handful of questions I'm going to ask you. You get 10 seconds to answer them on those that “it depends” applies, you can't give me an “it depends”. You’ve got to take a side, and then at the end, you can pick one or two of those to elaborate a little bit on.
So some of these will be financial related, there's one or two, they're just kind of in here for fun. And I'm going to go ahead and run through these.
So the first one, if you could meet one person, dead or alive, who would you meet?
Guest: Andy Temte
Getty Lee.
Host: Paul Barnhurst
Getty Lee. All right. Circular or no circular references?
Guest: Andy Temte
Circular. Life is circular.
Host: Paul Barnhurst
All right. Horizontal or vertical models?
Guest: Andy Temte
Horizontal! Absolutely.
Host: Paul Barnhurst
All right. Will AI ever build the models for us, yes or no?
Guest: Andy Temte
Yes.
Host: Paul Barnhurst
Will Excel ever die, yes or no?
Guest: Andy Temte
No.
Host: Paul Barnhurst
All righty! Do you agree with the phrase that financial models are the number one corporate decision-making tool?
Guest: Andy Temte
Yes.
Host: Paul Barnhurst
What is your favorite thing about Excel? Function or feature?
Guest: Andy Temte
That it's still around
Host: Paul Barnhurst
That you don't have to learn a new tool?
Guest: Andy Temte
Right.
Host: Paul Barnhurst
That's the first time I've got that answer! I'm going to remember that one!
So feel free if there's one or two of theirs you'd like to elaborate a little bit on, go ahead.
Guest: Andy Temte
Will Excel ever die, yes or no, I say no because I've lived through several cycles of, “Oh, Excel is dead”, “Oh, Excel is dead”, “Google just came out with Sheets, Excel is dead”, and it doesn't die, so…
And then, will AI ever build models for us? The answer to that was an emphatic yes, but there's a “but” to that where the human oversight, the human aspect of creativity, critical thinking, curiosity, especially the creativity and the curiosity, those are things that AI might have 20 years from now, but it's going to be a long time.
Host: Paul Barnhurst
And I'm with you as well on that. I agree. They can build the structure. They're already doing some basic stuff on that and get there. But you need that human with that critical thinking, the creativity, the judgment, and things that it's really hard for AI to have to finish it off. Maybe it gets you 80% of the way there or whatever the number is. Very exciting, and I agree with you on the Excel thing. We always get to hear, Excel is dead, and I was like, if I had a dollar for every time I heard that, right?
We're heading into just kind of the wrap-up here, so we have two questions for you before we finish. So first one, if you could offer one piece of advice that you've learned over your career that you could share with our audience to be better modelers, what would that be?
Guest: Andy Temte
That message is to develop human skill, develop yourself as a human being, because it's not just all about the numbers, it's about how you communicate. It's about your level of curiosity, it's about the questions that you're able to ask. It's about putting yourself in the shoes of someone who is not as financially adept as you are. And it's about becoming and thinking of yourself as a teacher, as a coach, to those who don't understand the financial side of things as well as you do. And if you're sitting back in your chair looking down your nose at somebody because they don't have all the financial prowess that you do, please get out of your own head and please develop a sense of empathy and compassion for those who don't have the skills that you do because you're in this wonderful position to lift the whole organization. And if you're condescending, if you're rude, if you're judgmental, you're going to go nowhere.
Host: Paul Barnhurst
Great advice. And I don't think I've heard on my financial modeling podcast yet, but I completely agree. The words empathetic and compassionate. Generally not what you think about when you think modeling, but it's so true.
Guest: Andy Temte
Absolutely.
Host: Paul Barnhurst
As a leader, as a modeler, as somebody who needs to communicate things, you need to have both of those. And at the end of the day, modeling is about communication because you're helping communicate insights, derived from data and assumptions to drive behavior or changes or decisions. And so it's all about communicating, whether you're working on the spreadsheet or talking to somebody, and I think we often forget that.
And so last question here, if our audience wants to learn more about you or get in touch with you, what's the best way for them to do that?
Guest: Andy Temte
So follow me on LinkedIn. We're also out on Instagram and Facebook. I left Twitter or X early this year just because I got so fed up with that whole deal. But you can find me at andrewtemte.com. My last name does not have a P in it, so don't try to squeeze one in there, you won't find me that way.
Host: Paul Barnhurst
All right, great! And we'll definitely put the links in the show note and if there's any other links you want to share that you'd like for our audience to have, please send those over, and thank you again for being on the show. I've really enjoyed chatting with you and look forward to releasing this.
Guest: Andy Temte
Thank you so much, Paul!
Financial Modeler's Corner was brought to you by Financial Modeling Institute. Visit FMI at www.fminstitute.com/podcast and use code PODCAST to save 15% when you enroll in one of their accreditations today.