Finance secrets for driving business success through FP&A with Jim Caltabiano
In this episode of FP&A Tomorrow, host Paul Barnhurst is joined by Jim Caltabiano, a seasoned finance leader with over 30 years of experience in financial planning and analysis (FP&A) across various industries, including consumer packaged goods and food and beverage. The discussion centers around the evolving role of FP&A, the importance of insights over data, and strategies for building effective finance teams that can drive business value.
Jim Caltabiano brings a wealth of knowledge from his extensive career in FP&A and finance leadership roles at major companies such as Procter & Gamble, General Mills, Campbell Soup Company, Ajinomoto Foods, and Del Monte Foods. With a background in both finance and marketing, Jim offers a unique perspective on how FP&A professionals can go beyond traditional financial functions to become true business partners.
Expect to Learn:
Insights over data and the importance of connecting financial insights to drive business decisions.
Strategies to move from a siloed finance function to a business-first approach.
How FP&A professionals can better understand and contribute to business goals.
Techniques for making sound decisions when data is less than perfect.
Insights from Jim’s experience as a CTO on the role of data cleanliness and AI in future finance functions.
Here are a few relevant quotes from the episode:
"Great FP&A is all about the insights. It's all about being able to connect insights for the business." - Jim Caltabiano
"It's crucial to put the business first and your functional priorities second to achieve true business success." - Jim Caltabiano
"Thinking of data as a product rather than just a system changes how you manage and use it." - Jim Caltabiano
"Active listening is the most underutilized skill in business; it’s key to building relationships and understanding the business." - Jim Caltabiano
In this episode, Jim Caltabiano shares valuable insights on the evolving role of FP&A professionals in today's dynamic business environment. By adopting a holistic approach to data, leveraging multiple data sources, and focusing on active listening, FP&A professionals can elevate their role from number crunchers to strategic business partners. This episode is a must-listen for anyone looking to sharpen their FP&A skills and drive meaningful impact within their organization.
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Email - j.caltabiano@icloud.com
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In Today’s Episode
[01:24] - Introduction to the episode and the guest, Jim Caltabiano
[02:38] - Defining great FP&A and the importance of insights
[04:50] - Jim’s career journey and professional background
[07:12] - Jim’s philosophy of business first, function second
[12:19] - Strategy for learning new businesses as an FP&A professional
[17:06] - Techniques for FP&A professionals to provide insights beyond reports
[25:00] - Managing data quality issues and incomplete information
[28:11] - Insights from Jim’s tenure as Chief Technology Officer
[38:27] - Discussion on the use of generative AI in FP&A
[40:51] - Quick insights on essential technical and soft skills
[49:30] - Closing thoughts and how to connect with Jim
Full Show Transcript
[00:01:24] Host: Paul Barnhurst: Hello everyone, welcome to FP&A Tomorrow where we delve into the world of financial planning and analysis, examining its current state and future prospects. I'm your host, Paul Barnhurst, aka the FP&A Guy, and I will be guiding you through the evolving landscape of FP&A. Each week we are joined by thought leaders, industry experts, and practitioners who share their insights and experiences, helping us navigate today's complexities and tomorrow's uncertainties. This week, I'm thrilled to welcome to the show, Jim Caltabiano. Jim, welcome to the show.
[00:02:03] Guest: Jim Caltabiano: Thanks, Paul. Great. Great to be here. Excited to chat with you today.
[00:02:06] Host: Paul Barnhurst: Yeah, I'm really excited to have you. I know we got the opportunity to chat ahead of time a little bit. I'm looking forward to doing this interview. So I'll give it a little bit of your background and I'll let you add to that here in a few minutes. So he comes to us from the LA area. He has served as a senior finance leader and CFO for multiple companies, including companies such as Del Monte Foods and Campbell's. He has his bachelor's of science in finance from Syracuse and an MBA from Duke. And what we like to do is we start with this question for each guest. From your perspective, what does great FP&A look like? What is great FP&A?
[00:02:42] Guest: Jim Caltabiano: Paul, the ultimate question, right? Great FP&A is all about the insights. It's all about being able to connect insights for the business, period.
[00:02:54] Host: Paul Barnhurst: How do you do that? I'm just curious, how do you make sure you're connecting insights and not just giving data?
[00:02:59] Guest: Jim Caltabiano: Yeah, I mean that's really the key. That's why FP&A is such, you know, such a unique space, right? It isn't just data. It truly is taking information and piecing it together for the business. Like, what does this tell you? What are the insights? Ultimately, it's about how do you help the business make decisions.
[00:03:19] Host: Paul Barnhurst: Speaking of that, I remember I had on Jack Alexander, he's written one of the FP&A books and he goes, I made a comment, someone came in and handed me. He goes, you know, here's the report you requested. And he looked at it as the analysis. He said, here's the analysis you requested. And he looked at it. He goes, this is a report? There's no analysis here. Go back and redo it. He said that was the last time that person ever gave him just a report. He's like, I want some analysis here. I want you to tell me something, not just hand me the data. I can go find that if I need to.
[00:03:50] Guest: Jim Caltabiano: Yeah. Paul, you know, I think I think it's always been, you know, that way. That great FP&A is is about the insights. But I think even more today where the actual production of data is becoming faster. Right. So the real value of FP&A is even more than generating the insights. You know, when I started my career 30 years ago, you had to spend more time just getting the data, you know, and not having quite as much time on the insights, even though that's really what true FP&A people really want to do. Spend the time on the analysis, the insights. What's the recommendation? I think in today's world it's even faster, right? Because getting data, getting a report is quicker. It's easier. The problem is the insights are still with. The key is that's still the secret sauce for I think great FP&A.
[00:04:39] Host: Paul Barnhurst: I would agree with you. I think that's a great way. I really like the way you defined that. And, you know, providing insights that drive action really helps you be so much better as an FP&A professional. So why don't you take a minute and just tell our audience a little bit more about your background, how you ended up where you're at today and just kind of your career.
[00:04:58] Guest: Jim Caltabiano: Yeah, sure. Paul, thanks for the time on it. Yeah. It's been quite a journey, actually. So as you noted, I started I actually went to school at Syracuse, like you mentioned, finance and actually marketing too. So the background there was I didn't do the traditional finance accounting path. I kind of did finance and marketing because I really, really defined myself, I think more as a business guy than just a pure finance guy. I'm a business guy, right? So I grew up in the Syracuse area, went to school there. You noted I went to Duke, and after that I really started about a 30 year journey through FP&A and finance leadership, senior roles in the consumer packaged goods industry, mostly food and beverage. So, I was very fortunate after graduate school to spend five, five wonderful years at Procter and Gamble in Cincinnati. Great company, great, great place to learn and develop. And really, really, when we talk about data and insights P&G was great at, you know, saying, hey, we have plenty of data. This is about the insights and how you communicate it and also getting your point across more succinctly too, which was great. I then spent big blocks in my career, almost nine years with General Mills, mostly in the Minneapolis area, but also up in Toronto, Canada, and spent about a decade with Campbell Soup Company in New Jersey, Canada, in Toronto and then in California for some roles. And finally, the last couple of roles I was with Ajinomoto Foods. So Ajinomoto is a very large Tokyo based company in the food space here in Ontario, California. And then my last role was actually with Del Monte, where I was both CFO and then switched and actually went into a role as Chief technology and sustainability officer. And right now, though, I'm out looking for my next gig. Paul. So there you go. And enjoying a nice severance summer, which I which has been great.
[00:06:47] Host: Paul Barnhurst: Well, we'll let the audience out there know that. Hey, if they're looking for somebody in the packaged goods space to reach out to you. Thank you very much, B and appreciate it. When you said Ontario. Took me a second straight. You're talking Ontario, California, because you just said Toronto and I think Ontario
[00:07:03] Guest: Jim Caltabiano: And I've lived in both. So there you go.
[00:07:04] Host: Paul Barnhurst: I gather through that. And I've been to both places. I know what you're talking about. It just took me a second. So when you and I chatted the other week, you shared a philosophy that you've used throughout your career that I'd like to just dig into a little bit. You said your focus has always been business first, function second. Can you elaborate on what that means? Yeah.
[00:07:25] Guest: Jim Caltabiano: I mean, to me, the role. Right. What we do in regardless of whatever function you're in, it's there to support the overall business enterprise. Right. And so sometimes I think particularly in larger companies. Right. But also in smaller companies, you get into this. You're kind of doing your functional silo. Right. And what I always tell people, particularly because in the consumer packaged goods space, food beverage big CPG. You know, it's always going to be a sales and marketing oriented environment right. So the finance that you're doing there, you're doing finance not for finance. Right. I tell folks that always would come into the CPG industry. If you're really in love with finance, go do Ibanking. Go do something like that. Right. If that's really if that's really, really your passion. Right. But ultimately, if you're going to work in really good FP&A, it's to support the business cause. And so what I don't like is functional silos, right? What I try to encourage my teams is you got to know why we're here. We're here to support the enterprise. Right. Use your skills, use your insights within finance and all the great analytics that you have to help support the enterprise. So always try to put the business first and your functional priorities second, if at all possible. That will get you a long way in the career and in business success.
[00:08:42] Host: Paul Barnhurst: I think it's great always putting the business first. Okay. What's the strategy of the business? How does what I do tie to that? So the example I always gave of business first function second is I had every about once a quarter commissions would come do the same time as our forecaster a couple times a year and I would get called occasionally. Your forecast is not in the system. You're late. Like, do you want me to pay people or meet an arbitrary deadline for a forecast? Never once did they say meet the arbitrary deadline, right? It's like, hey, our people. And so I think, you know, that's just one small example, but I'd love a couple examples from your career of how you've applied that or how you've had your employees apply that in the workplace. Yeah.
[00:09:23] Guest: Jim Caltabiano: You know, I think a lot of it, some of the best examples are maybe when you run into an organization I've taken on, you know, several different kind of I'll call them almost maybe turnaround or organizations that maybe were just not a fine tuned machine, if you will. Right. And one of my examples, basically the organization that the finance organization in particular was a little bit, I would call it shell shocked. And what I mean by that is, you know, they'd really lost the ability to have a seat at the table for the conversations. And so the organization really was more focused on just keeping your head down, getting, you know, don't just peace as the organization is to get that linkage that you talked about to the business. Right. So the key role that I needed to do in that situation was to get our teams to understand how the work they did actually is a translation of business, right? It's business results and how it drives the business forward.
[00:10:20] Host: Paul Barnhurst: So I was going to say, how long did that process take to get the business or get finance where it was business first, and help them get from being kind of shell shocked and survival mode, because I would imagine that's not a quick transition.
[00:10:34] Guest: Jim Caltabiano: No, it was probably 18 to 24 months realistically. Right. And it comes down to having a series of small victories. Right. You get in there and you start proving the worth and you get your seat back at the table, you basically help the broader organization understand that finance is there or objective. We're going to help drive decisions forward that gets you and earns the right to have a seat at the table. But it's taking and using the ability to partner with the business. That's what gets you back into the game, you know, and doing finance in a silo, if you're not connected to the business and just kind of generating things, it's just a lonely, a lonely existence. And it's not fun. And we're a crucial function in driving any business forward, regardless of what the industry is.
[00:11:20] Host: Paul Barnhurst: I'm 100% with you. I've been in roles where finance really isn't involved in the business, and it's not fun. I want to work with the business and partner with them and be able to see make a difference versus hey, you just be quiet, return your report every month and leave us alone. Like, I joined a company and one of the first things I did was ask to attend the sales call because my role was coordinating between sales ops, finance and data analytics, and it was a heavy coordination role. And they're like, oh, we'll just send you. We'll just give you access to clarity so you can see all our deals, which was their way of saying, we don't want you on the call. We don't want you to know what's going on, because there's a lot of moving things around, a lot of timing to fill the pipeline, and that eventually leads to a big gap. It's a question of when. Correct. And that's what happened eventually. But it was, you know, once we got a new CFO, he's like, nope, not happening. I'll be on that call. We're having them. Here's how it's going to work. And we continued to work through that. But it was definitely a challenge at first.
[00:12:19] Guest: Jim Caltabiano: Yeah. I mean, one thing I'll just add to that is I think you've got to talk about when I say business first, function second, you have to have that desire to learn the business. You have to whatever the industry is like you, you need to. It's almost impossible to be a really good FP&A leader. Okay? With developing insights if you don't understand the business. It's just numbers then, and you may be able to identify trends, but if you don't really understand the underlying business and how it works, those insights are pretty shallow. And so that curiosity is very important for an FP&A professional.
[00:12:56] Host: Paul Barnhurst: Yeah. Speaking of that, I'd love to know what's your roadmap? You get a new opportunity. You go into a company. How do you first go about learning the business? Do you focus on kind of looking through the PNL, talking to each leader, going out on site visits? Do you have a kind of a playbook you like to use to get in and really start learning things?
[00:13:15] Guest: Jim Caltabiano: Yeah, I'll tell you, it's evolved, right? So I you know, earlier in my career it was more of the classic, you know, I'll call it more of a traditional academic approach. Right. Let me read to the reports. Let me look at the PowerPoints. Let me study. Right. You know, probably the last 15 or 20 years of my career, that playbook I've thrown out the playbook is to absolutely get out and see the operations. You know, especially if it's a manufacturing company. You got to see the operations, but also very importantly, listening, right. Listening to your business partners and listening to your team. Right. That's how you actually learn. So, you know, it's one of those where, you know, again, probably earlier in my career, I'd be like, I'll just read the report and learn. I'll study if you will. Now it takes a little longer, but they actually meeting, talking, listening. What's on your team's mind, what's on your business partner's mind. Because not only do you, you know, get a deeper understanding of what's going on, you're starting to build that relationship. Because that is a huge part of building trust and confidence in an organization. So the other thing is, you know, you don't go into a place knowing everything because you don't. Right. You have to have that humility. You've got to you know, you've got to certainly a skill set that you bring in. That's why you're there. That's why you, you know, got the role. But the idea there is, you know, take the time, learn the business, learn your people, learn what makes it tick. And that's probably the most important trait I think is, is just asking questions, listening, learning, you know, and then and then you start to get your own. Okay. Now I can piece things together, I understand it better. And then you can start to make the tweaks that you want to and changes that you think are good for the organization. But, you know, you don't go into like a bull in a China shop doesn't work very well,
[00:14:58] Host: Paul Barnhurst: I agree. I love how you said throw out. You threw out your old playbook of the academic. I'm just going to read everything and I'll learn about the business. That's often how I did it. And the last couple hires I did, one of my companies, we started to really set up a program because we hadn't been doing a good job. In that first week, you had him spend a day with customer support and with product. Yes, they went through some decks, but a lot of it was out listening on the phone, talking to people, trying to figure out if we could get them on a sales call, whatever it might be. So much of that first week was meeting people and seeing their job, and they transitioned much smoother and quicker than other ones where, hey, just read about this, read about this. We'll show you how this report works. And eventually we'll have some conversations with the business now.
[00:15:43] Guest: Jim Caltabiano: So I think it's a really good, a really good discussion, Paul. I mean, the fact is you, the real role of FP&A, right, is to deliver those insights to help drive the business forward. And it's very difficult to do that if you don't understand the business. And the best way to understand the business is to feel it, touch it, smell it, right. Get out there and actually, you know, see what is going on. Once you have that understanding and you've actually kind of physically seen or touched it or understand the processes, then that analytics and insights that you bring as an FP&A professional, they start to link, because then the numbers start to flow and it tells the business story and generates the insights. That is a critical, critical piece. And it's just you can't just do that from reading in a report. It's almost impossible to get the depth you need.
[00:16:24] Host: Paul Barnhurst: Yeah, it is amazing how much better the conversations will be when you really understand things. There's things when I provide suggestions, they're like, yeah, that's not possible. And you don't understand why. And sometimes it's because of lack of knowledge of the business and other times like, oh yeah, it's a good idea. We hadn't thought of that. And the better you know the business, the more often you're able to provide some kind of insight or suggestion that's possible versus just throwing them out where it's like, yeah, no, you don't understand. Can't do that, can't do that, can't do that. And you're just going through a bunch of can't do types.
[00:16:56] Guest: Jim Caltabiano: That's right. That's correct.
[00:16:58] Host: Paul Barnhurst: We've talked a lot about sharing insights and how important that is and how finance, you know, really is a translator and a conduit in their job. So how do we make sure that we're not just delivering reports. What are some of the things that we should do to make sure insights beyond learning the business. You know, is there a certain way you like to kind of analyze data, or how do you help your team make sure they're going beyond the reports and really providing insights to the business?
[00:17:28] Guest: Jim Caltabiano: Yeah, it's a great question. You know, one of the most important things that we need to do right in FP&A is don't just take the report. Okay. Because there's a real desire broadly not across business. Right. You want the report to tell you the answer, right? It generally does not. It generally does not. It's it's. And taking that next step to get the insights, what I try to do and always encourage my teams to do is dig a little deeper. And what I mean by that is try to maybe try. And I love triangulating data. I like saying, okay, I see the, you know, the conclusion you're drawing from this, which is good. That's good analysis. Now take a look. And are there a couple other data points? Are there a couple other situations, a couple other analyzes that can maybe confirm or deny or disconfirm, if you will, even though it's not the right word? The answer. Right. Triangulation is really important because you know that right answer doesn't just spit out of a machine. I mean, if it does, well, it kind of does, right? To a certain extent. That's what I'm saying. Data spits out of a machine. But the insights, particularly now, are going to be more and more and more important. And I think you need to look at multiple data sets to try to triangulate information. I'm also really a range guy. I love ranges, like, you know, when we talk about FP&A, you know, we have this, this idea that the more detail, the more precise, the more accurate. Incorrect. That is incorrect. Right. Your dad is probably going to be. Your point estimate is probably going to be wrong. Highly likely. But the range, especially if you pull a couple of different insights in, you're probably going to be pretty spot on to an acceptable range. And understanding what that is is really important for an organization.
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[00:20:34] Host: Paul Barnhurst: Yeah, I think Rangers have become much more important. You know, there's the sensitivity analysis and then there's scenario analysis which I now like to call scenario management. And then there's also just probability. Sometimes you're running whether you're doing Monte Carlo or other type of statistical that you can do to get comfort around your risk. Because like you said, we almost always submit a number for a budget and it's a point estimate. But anyone in finance knows there's a range around that point estimate. And typically there's some de-risking that goes into it because you understand there's a range to give you a better chance of hitting that number. As I say, if I could forecast with that level of accuracy, I would be sitting on a beach somewhere, you know, so it's not about being right like I did. I had one time where a month, all the businesses rolled up to within like $100 on millions. And so I was like, how do you forecast so? Well? I was kind of laugh. I'm like, they were off quite a bit in different areas. It was dumb luck.
[00:21:30] Guest: Jim Caltabiano: The God of offsets, right? The law. Law of large numbers. If there's enough in there, you get the offsets. You know, you don't look at and sometimes you catch a break, you know, but sometimes you don't. And all those variances all move in the same direction, especially when it's bad. It's not fun. Right. But it happens now. But ranges. Ranges are good. Ranges are good. I think one of the interesting things that you bring up there when you're talking about budgeting, right, and how things are rolling up, is as you're building up, especially the more complex an organization, right? You're getting inputs from different pieces of the organization. And what you have to be very cognizant of as an FP&A leader is how much risk or opportunity have they already built into theirs, because what happens is right as you scale it up to the CFO and corporate level, if everybody's de-risked something or everybody's stretching, you don't have a good budget. You're learned 1 to 1, from one side to the other, right? So you've got to that's another piece of it. I really love to encourage the organizations that I work for. Give me a straight down the middle 50 over 50 forecast. Give me your best and then give me a risk and opportunity range. Don't bake it into your forecast, just give me your straight. If you had to like bet straight up 50 over 50, what would it be? And then give me the outliers. That's okay on both sides. That way you know, especially as you're rolling up all of those particular things, you can kind of vet it and then say, okay, now what is the overall risk profile? Look for the organization as I scale this entire thing up.
[00:23:04] Host: Paul Barnhurst: That's a really good way to do it, because what happens if you don't like you said you're one way or the other most of the time, maybe they all net out, but usually they don't. They usually end up being one side or the other. And I've seen both of those where way too many opportunities went into the plan. And I even told them like, this isn't going to happen. This isn't achievable. Yeah. So as you mentioned, you know, range is the forecast. You have to have them. And I think I really like how you said, look, just build me a straight forecast and then give me the risks and opportunities. So you don't run into that problem where, hey, we're way under or way over. I've been there. I've seen times where I didn't build a forecast. We inherited it, where they put 50 million a stretch in, which was 10% of our revenue, and it was just a disaster every month. Explaining to the CFO, hey, yeah, we pulled down 3 million. Oh, we're taking down the next forecast. 6 million. Oh, we're coming down 10 million. It was just, you know, a continual race to the bottom. And that's never a good situation.
[00:23:59] Guest: Jim Caltabiano: It's never, ever a good situation. I think the other thing too, when you ask for a 50 over 50 forecast and then when you're asking for risk and opportunities, you take it the next step and you ask for probabilities on those opportunities. Right. Because then you start to get a sense for, okay, how real is this? Is this just a, you know, a sandbag? Is this a real concern? Are you confident that you're going to get this next customer? That revenue stream is coming in. You know, if you give me a 25% probability, I'm not putting that opportunity in the forecast. But if I see a 50, 75 and I'm balancing everything out, maybe it goes in. But that's another piece of just trying to get at that next level of probability around the risk and opportunity.
[00:24:42] Host: Paul Barnhurst: Yeah, I think it's great. I've done that before. Where you wait, all of them by probability from, you know, totally. It's in the bag. We just didn't put it in the plan for this reason too. Yeah we threw it in there but don't plan on it. Right. You have everything in between. We talk about that. We talked a lot about probabilities. Odds. One other thing I want to talk about is that you're dealing with data. The common challenge we have is incomplete and just dirty data. Yeah. How do you manage that as a finance department? How do you get comfortable making decisions knowing that the data is rarely ever going to be 100%?
[00:25:16] Guest: Jim Caltabiano: Yeah. I mean, I think the main thing once again, is multiple sources with triangulating information. I think you just don't know. It depends on the decision you're trying to make. You know, if it's just, you know, a report and there's no real decision being made, it's probably not as big of a deal. But you know, if you're talking about, hey, we're going to do this product launch, we're going to eliminate these products because they're not profitable. Or, you know, this we're seeing this issue at a plant. I want to see multiple sources of information. Right. Because any one individual source of information, like you said, there's going to be noise in it, right? It tends to be, though, if you dig a little deeper to try to understand it, first of all, with multiple sources of data, but also to try to before you make the decision, before you make the call it goes a little deeper. Is the data clean? How effective is it? You know, it's never going to be perfect, but is it like way off or you know, so a combination of going deeper in that one data set to say, okay, how much noise do I have in this thing? But also introducing a couple of things. Triangulate it and it points you in the same direction. I view that like, look, you have probably 80% complete data. You're never going to get complete. I mean, not not if you're moving fast enough, right? You have to assemble enough pieces of the picture. There used to be this game called Classic Concentration, way back in the day, where you'd turn over pieces of the puzzle and try to guess what's behind it. Right. That's kind of what this is about.
[00:26:41] Guest: Jim Caltabiano: Turn over a few of those pieces of the puzzle and says, okay, now I feel like I've got a pretty good sense for the right decision, but just touching upon that briefly, the whole concept of data and data cleanliness is becoming even more. It was always critical. Right, Paul? But now with AI and everything it is even more critical that data, master data and become it has to be clean. Right. And so part of the role as CFO is also to make sure to really understand how clean is that data. Right. How clean is it? Who owns it? How do we know it's good and it's effective? So this partnership now between finance and it. Is even more important than it's ever been because we're relying so much on the information, the data coming out of these algorithms that are happening. But it won't matter if the data is dirty. Actually, it's more dangerous because now you're getting data faster and it's wrong. And if it's still wrong, you're just getting wrong data faster, which is not a good thing either. So, you know, there's got to be a real implication for understanding data and data cleanliness. And then as you get it clean master data, keep it clean. What kind of governance do you have around it? Because I've been through many, many situations in my career. Right. We do a special project, we clean up our master data and then we don't govern it. And then two years later you're doing the same damn thing again. And it's kind of silly. So there really needs to be good boundaries because it's becoming even more critical than it ever was before.
[00:28:11] Host: Paul Barnhurst: And I'm curious, you mentioned your last role. You did CTO for a while. Chief technology officer. Yeah, yeah. So how did that change your perspective on data or did it help you kind of see data from a different lens?
[00:28:23] Guest: Jim Caltabiano: Yeah, it was great. You know, I've managed IT departments before as part of my CFO roles, but this last role allowed me to get a little deeper. Right? And the spaces that we got deeper in on the technology side were obviously cyber. You know, everybody is very, very onto that big time and the risk related to that. But generative AI and what was going on there too, and how you start to think about what's coming next. Probably the biggest thing though, for me, was just given what's coming down the pike was really putting an emphasis on master data and cleanliness of master data. And probably the biggest change from having, you know, being able to be a chief technology officer and get a little closer under the hood on technology, was one of the gentlemen I worked with. That was our head of it. Great. Great guy. He really started to reframe some things. So now as you're thinking about, you know, data lakes, right? Information being pulled into something where you can use different graphic interfaces to pull the information out. So a power BI or whatever is making sure that data is clean. And instead of thinking of data as a system, start thinking of data as a product. Right. So the data that's in there is actually owned by the business. It's owned and not just owned. It's verified. They have to certify that information. Because if that happens and you get the right subject matter, experts looking at the underlying master data or whatever it could be, it could be supply chain information, whatever that then is certified and it's in the data lake. Then I feel really good that pretty much anybody can go in and start using the information. I know it's right, I know it's consistent, but that is hard to do. It takes a lot of time, but it's really important and it's going to become more important as we go forward.
[00:30:11] Host: Paul Barnhurst: I couldn't agree more. It's so important on the data front and AI is only ramping that up. Companies are now going to make sure their data is clean, but you got to make sure, okay, why am I using AI? What data needs to be cleaned? Just don't go clean everything up because you can spend a fortune and some things you may not get value from. So there's that. That is why that underlines all of it. But then you have that. You have that master data. Having a certification process is huge, he said. Or you end up, as we've all done, you clean something up, a year later, you're cleaning it up again. You're just like, why didn't we fix this at the source.
[00:30:46] Guest: Jim Caltabiano: And the source of a lot of this? It isn't an IT project, okay? Data is a business, and the subject matter experts of that function need to be the ones to certify and verify.
[00:30:59] Host: Paul Barnhurst: Yeah, because I teach finance, we're support functions. We're not generally going to know the level of detail. We may be able to look at it and say something's wrong. Yep. But that doesn't mean we should be the ones certifying it. Absolutely. Unless we've worked in that role or have some deep experience that allows us to be an expert, right? You know, something you mentioned earlier and we've talked a little bit about is, you know, models and detail. The most detail in the model in the world isn't necessarily more accurate. How have you balanced, you know, detail versus simplicity. How do you think about that? Because it seems like it's the age old struggle we all deal with. How detailed should I be? How simple should I be?
[00:31:36] Guest: Jim Caltabiano: You know, I think a lot of it comes down to what you're trying to answer, right? I mean, it really does. Like what? What's the profile of the question that you're trying to address? You know, if it's, you know, not that super critical, then, you know, you don't have to have as much detail, right? You know, but at the same point in time, too much detail slows things down as well. Right. So again, I like ranges. And I think if you use multiple data sources and you use ranges, you're going to get in the right space, right? I think what happens a lot is you know what I've asked my teams a lot is look, here's the information that comes out. Here's the report. Here's what you're looking at. Here's your initial analysis. Let's say you have again, some products at a manufacturing plant that you think the report says we should discontinue them because they don't make quote unquote, make money. I want you to dig deeper, and I want you to now take away the accounting methodologies, and I want you to follow the cash flow on this thing, okay. Because especially in manufacturing, things are fraught with allocations. Right. And depending on the situation, if a plant is not at full capacity and you're pulling something out and you're like, oh yeah, we're going to save this much money because, you know, we're limiting this.
[00:32:57] Guest: Jim Caltabiano: This product loses money. It's like, oh yeah, you forgot all the allocations that are fixed at the plant that aren't going away. And all this SG&A corporate stuff, it didn't go away either. Right. So you need to think about it differently. You need to to say what am I trying to address? And that that tells you what level of analysis you need to do, including the level of detail and number of sources of detail. Again, it'll point you in the right direction, but then you still need to dig deeper. Paul, I mean, honestly, one of the things I always coached my teams on is, you know, don't go for the simple route, okay? If a number, if a system spits out a number and it's as simple as that, you're not really needed. Sorry. That's not you know, we can. And that that is that is what we're all going to face with AI, right? It's it's not that we're going to be able to get information easier. Okay. The issue is, are those insights correct? And that's still is the human mind. That's still that interaction of that data and what it's telling you and your own intuition. Because also I tell my teams trust your gut too. Okay. Trust your gut as well. If it doesn't seem right, ask the next question. Let's dig a little deeper.
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[00:35:11] Host: Paul Barnhurst: You know, the way I like to describe it, I worked with a guy is being able to have that kind of this make the sniff test, having the ability to look at something and just be able to say, on the surface, knowing nothing about it, this just doesn't look right. I don't believe this could be right. Like, I worked with a guy and he had taken over a role I had, and he'd pull numbers and they would look like order of ten times what we were expecting. And he'd have. No, he just couldn't comprehend why they were wrong. Well, this is what the system gave me. Yes. That means we have 120% of the entire business in the world. That's not possible or whatever it might be. So that's huge of just having that ability to do sanity checks beyond, you know, understanding the numbers, any of that, just that sniff test and that gut that can help you at least directionally dial things in that.
[00:36:01] Guest: Jim Caltabiano: You know, that sniff test is the gut I'm talking about, right? It's like it doesn't feel right if something just seems off. I've always asked my teams, no matter what it is. Just. Just ask the next question. Just dig a little deeper. Don't necessarily just rationalize it away. If your gut is saying you know something just doesn't pass the sniff test, right? Just go a little deeper and maybe it's fine, but maybe it's not. That I think is some real power in there, because one of the things with finance, right, in FP&A is we have to be very objective. We have to be very data driven and objective. You know, there are natural biases that are set up in businesses for good reason, right? , marketing and sales need to be more, you know, focused, driven, more optimistic. They need to do that. Right. Supply chain is going to be a little more conservative. Like, man I want to run this stuff. Like I want to just like it's just the nature of the business. Finance needs to play it right down the middle, right down the middle, and be ruthlessly objective in what we're doing and our analysis and speak with information. Speak with data. And when you have the data and the insights and you're able to have that connection because you understand the business and you've built relationships with your business partners, that's where the real power is.
[00:37:16] Host: Paul Barnhurst: I really like the term you used about being, you know, objective. When we talk, we use the word ruthlessly objective. And one I've heard is, you know, dispassionate, hard headed analysis in that just remove the emotion. Yeah. Lay the facts out on the table, let them be what they will be, and then figure out what you do because of those facts. Because as soon as you bring emotion into it, you tend to bring bias into it as well.
[00:37:42] Guest: Jim Caltabiano: Absolutely, absolutely. And it's very easy to rationalize away the data. Right. If you don't have the strength and conviction of finding something, it doesn't mean being hardheaded and stubborn in and of itself. It's just bringing the facts and make sure that they're at least understood. And by the way, that doesn't mean, you know, the decision is going to be maybe the one you advocate, but at least make sure the voice is heard because there will be a desire to rationalize. Maybe the data is telling you something and people just don't want to accept it. Right. And that's not easy. That's one of the tougher jobs in FP&A is to actually be the contrarian against a popular opinion. But you have to do it. That's one of the most important things we do, as is in our roles.
[00:38:24] Host: Paul Barnhurst: Yeah. And something I've heard and I haven't got to try it much, but I've heard a generative AI is great to ask for a contrarian view, like giving it some data and asking it to poke holes and be kind of that other side of the argument, because it will think of things that you may not think about, and then it gets your mind going and you're like, oh, what about this? What about that? So just kind of wanted to bring that in that that's a funny area where you can potentially use generative AI.
[00:38:47] Guest: Jim Caltabiano: Absolutely. Yeah. I mean, again, I think any additional source of information or data that can add to the decision you need to make is very, very important. And it does. You know, if again, AI is going to be unbiased as long as the data is not skewed, right? That is a good check. I think in balance, in terms of making the soundest decisions you can.
[00:39:10] Host: Paul Barnhurst: Yeah. As long as you know, you've written the algorithm where it's just analyzing the data. You don't have bias in the data. You're good. You know, the reality is all of our generative AI we know has some bias and you have to look for it. But when it's trained on a specific data set that there's no bias in, it's just strictly returning facts. That's a great, great way to check. And that's usually what it's doing when it's running numbers. Yeah.
[00:39:34] Guest: Jim Caltabiano: And I think the key there is to not rationalize away the data and what it's saying, at least at least engage with that perspective. Not just like, oh this is yeah. No, no, just dig in and maybe it's wrong, or maybe it maybe it's you know, it does. It's good data, but it doesn't really sway our decision. But maybe it should or at least be considered.
[00:39:56] Host: Paul Barnhurst: I still remember the story when you said at least be considered. So I worked with a guy in Arizona that worked at American Express. He had done a PhD in physics and he had this data set. He went to his professor on this little part of the data set. He said, this is odd. Maybe we should dig down and study this. And as professor said, no, stick with the original. Let's work at this data. And that data he had been looking at. The next year, the guy that won the Nobel Prize studied that area of a data set that was in the data that he had been looking at. He told that story of just like how different things would have been had they just looked at that data. And obviously that's a huge example. That's not typically what's going to happen if you don't look at some data, but you know, it can be on a smaller scale or a bigger scale, but look at those hunches, look at those outliers, and just at least get comfortable with them. Even if you don't do anything.
[00:40:44] Guest: Jim Caltabiano: You know, at least, like I said, engage with the data, engage with it, and then go from there.
[00:40:50] Host: Paul Barnhurst: Agreed. All right. So this next section, we'd like to ask a couple standard FP&A questions. Looking for kind of quick answers. Where do you stand on each of these? The first one we like to start with is the number one technical skill that FP&A a professional should master.
[00:41:02] Guest: Jim Caltabiano: I actually think it's that range you're getting comfortable with using multiple data sets and ranges, because you're 80% is what you're going to get.
[00:41:13] Host: Paul Barnhurst: I like it, number one, soft skill.
[00:41:16] Guest: Jim Caltabiano: Active listening skills by far.
[00:41:18] Host: Paul Barnhurst: I love that you didn't just say communication, but active listening because that is so underutilized. It's one I've had to get better at.
[00:41:26] Guest: Jim Caltabiano: No, Paul, I mean, it is probably the most underutilized soft skill in business, period, because there's so much that comes from it when you practice it.
[00:41:35] Host: Paul Barnhurst: So any advice if somebody's listening, they're saying, I want to get better. As an active listener, what would you recommend they do?
[00:41:40] Guest: Jim Caltabiano: I mean, you have to be cognizant of it's hard to do. We all like to talk and get our point across, right? I mean, that's just human nature. So you literally need to actively tell yourself sometimes to just shut up and listen. I mean, it's as simple as that, but it's hard. Right. And and again, the bias is we generally almost all humans listen to respond. That's we're just conditioned that way. But I mean, I have tried really hard over the last ten, 15 years to hone these active listening skills because, number one, we were talking before about how you learn a business. One of the best approaches is to actively listen to your new coworkers, your team. You get good insights. The other thing is, very importantly, you build relationships because people want to be heard. That's really important.
[00:42:33] Host: Paul Barnhurst: Thank you for sharing that. And I agree with you. Sometimes it's just telling your mind, shut up and focus. Stop thinking about the next question or what you're going to say, and just listen. And just a constant reminding yourself until it becomes ingrained at some point where you actually start finding yourself, oh, I'm really listening. I'm not thinking about what's next. Yeah, it may not be very many times that happens, but it gets better.
[00:42:56] Guest: Jim Caltabiano: It always gets better. And when you do it, Paul. Right. When you do get good and active listening, build those. Like I said, you build those relationships and even though you know you may not agree, you may be in a different situation. People that you are listening to feel like they've been heard and understood and that is huge.
[00:43:16] Host: Paul Barnhurst: 100% agree. Jim, you know, even if you make a decision they may not like, if they at least feel understood and heard, they're usually willing to support it to back it.
[00:43:27] Guest: Jim Caltabiano: Very common. I mean, and that's that's common for most of us, right? I mean, just because you have an opinion, that's, you know, you offer an opinion, it doesn't go that way. As long as you've been heard, you go with it and you execute.
[00:43:39] Host: Paul Barnhurst: Agreed. What is the software you can't live without in FP&A?
[00:43:44] Guest: Jim Caltabiano: I'm still old school. I'm still excel. I'm sorry. That's all I got.
[00:43:47] Host: Paul Barnhurst: Yeah, lots of people are. You're not alone.
[00:43:48] Guest: Jim Caltabiano: I mean, it's just. You can still do so much in Excel.
[00:43:52] Host: Paul Barnhurst: Well, and, you know, it's funny you say old school, but the amount of changes they've made over the last decade to excel is pretty amazing. I know it is not. If it was the Excel of 1983 and we were all still using it, our 8585, I'd have some real problems, but it's not. It's so much more than that today.
[00:44:10] Guest: Jim Caltabiano: Don't make me homesick for Lotus 123 okay.
[00:44:13] Host: Paul Barnhurst: I did use that.
[00:44:15] Guest: Jim Caltabiano: I used it in college. Dude
[00:44:17] Host: Paul Barnhurst: College was Excel for me.
[00:44:19] Guest: Jim Caltabiano: Good for you. Good for you. I was at that transition where Lotus one, two, three started and then we were moving to Excel. So there you go.
[00:44:25] Host: Paul Barnhurst: Yeah. But I think we had Quattro Pro for a while when I was a kid. I still remember the strip you'd put on top of your keyboard. That would give you all the commands to use. Kind of like shortcuts today. All right. This is the get to know you section. I'm gonna ask some questions to know more about you as a person. So, Jim, what's your favorite hobby or passion?
[00:44:43] Guest: Jim Caltabiano: You know, I really like hiking. You know, as you mentioned before, I live near Los Angeles. I live out in the suburbs. We have beautiful, beautiful, just hiking trails and canyons through here. And the weather's good most of the year, so I really enjoy getting outside and hiking. It's just. It's just gorgeous.
[00:45:00] Host: Paul Barnhurst: Yeah, I love to hike as well, and I've done a lot of hiking in the Sierra Nevadas. There was fabulous Whitney and Mammoth and Yosemite all that. So beautiful. It's gorgeous. Beautiful country for sure.
[00:45:13] Guest: Jim Caltabiano: Yep, definitely.
[00:45:14] Host: Paul Barnhurst: If you could recommend a book to our audience to read, what book would you recommend?
[00:45:18] Guest: Jim Caltabiano: Yeah. You know, there's a book and a course that I took, but the book is one called Getting Things Done by David Allen. Okay. It is one that is incredibly focused on productivity and efficiency. And it's a really outstanding book. And not only the book, but I was fortunate enough now, about 20 years ago when I was at General Mills, to actually be able to to take a course that he taught. It really, really helps with efficiency, productivity. It's well worth the read. There's some simple tricks and tips that can really help you be a lot more efficient in juggling the multiple things we have to juggle every day.
[00:46:00] Host: Paul Barnhurst: I'll have to check that out. I could definitely be more efficient.
[00:46:03] Guest: Jim Caltabiano: I think you'd really like it, I really do.
[00:46:05] Host: Paul Barnhurst: Good. No, I appreciate that recommendation. So getting things done. I'll check that out.
[00:46:10] Guest: Jim Caltabiano: David Allen is the author.
[00:46:11] Host: Paul Barnhurst: Yep David Allen. Okay. Got it. Getting things done. Perfect. All right. If you could travel anywhere in the world tomorrow. Where are you going?
[00:46:19] Guest: Jim Caltabiano: I like Tokyo. I've only been there a couple times on business, but. And I wish I had more time there. You know, it's just. It's an amazing city. It's an amazing culture. Safe, clean. But there's just so much to do and experience there. So I thought it was fascinating. Great city.
[00:46:35] Host: Paul Barnhurst: That's a place I want to go. My daughter wants to go there. We had a cousin that was here from Japan for about six weeks, and she was like, I want to go to Japan now on vacation. We're like, yeah, not this year. It's like two months away, maybe next year.
[00:46:49] Guest: Jim Caltabiano: But it really is a wonderful country. It really is. And you guys would enjoy it in Tokyo. It's just fascinating. The size of the place is incredible.
[00:46:58] Host: Paul Barnhurst: I'll have to. I'll definitely. It's on my list. I'd love to get over there. I haven't been to Asia yet, so it's somewhere I want to go. All right. If you could have dinner with one person in the world who's alive today. Who you taking to dinner?
[00:47:09] Guest: Jim Caltabiano: I would love to go with Phil Jackson. So, Phil Jackson go into with a sports analogy. So Phil Jackson, right?
[00:47:17] Host: Paul Barnhurst: As a jazz fan, it's hard to hear Phil.
[00:47:19] Guest: Jim Caltabiano: I know, I know, but you know, someone someone, right. That has played the game but then has coached and won 11 different 11 championships in the NBA. Two different massive, you know, winning organizations with the Bulls at the time and the Lakers. But the key is how did he win so many with so many different pieces? How was he able. And you think about the egos involved. Right. So you have talent. But how do you make the talent actually work? What leadership skills. How did you motivate these guys? They have all the money in the world. They're talented as can be, but somehow you got them to jive. I would just love to tap into that.
[00:48:00] Host: Paul Barnhurst: I agree with you. It would be fascinating. He was one of the best, not necessarily X's and O's coaches. He had great assistance for that, but he was able to manage relationships and egos extremely well. I mean, look at the relationship between Pippen and Jordan today. Don't even talk to each other. But yet, you know, he had him working together very well during their career. He kept Rodman in check for three years, which that's quite the task. That alone. Right. You know, Kobe Bryant and Shaquille O'Neal, that had to be a difficult two to manage.
[00:48:32] Guest: Jim Caltabiano: I just would love to tap into that because that's a form of leadership. You know he had the blessings of talent. Yes. Too much. So how do you manage it? I think it'd be fascinating to learn how he pulled it off.
[00:48:45] Host: Paul Barnhurst: Yeah, I would love to learn some of his leadership skills. I think that would be really interesting. All right so here's the wrap up. We have two last questions we're going to ask you. And then we'll let you go. First is if you could offer our audience one piece of advice to be a better business partner. What's that advice?
[00:49:03] Guest: Jim Caltabiano: Shut up and listen.
[00:49:05] Host: Paul Barnhurst: I figured that was probably going to be active listening.
[00:49:07] Guest: Jim Caltabiano: Just active listening because it is something that can unleash so much goodwill. You're going to learn. First of all, you're going to learn the business. Right? But again, you are going to build those relationships. And it is a very underutilized skill, extremely underutilized, especially in bigger organizations. So yeah, try to listen. Try to listen and learn.
[00:49:29] Host: Paul Barnhurst: Perfect. Last question. If someone wants to learn more about you or potentially get in touch with you, what's the best way for them to do that?
[00:49:37] Guest: Jim Caltabiano: Yeah, probably the best way is just the email. It's J.caltabiano. So, you know, you got the spelling in there, right? So J.Caltabiano at Icloud.com. I'd love to hear from folks. See what they think. You know, I think it's a great discussion here because we're talking about all the technical things to write about that FP&A does. But what we've hit upon, I think a lot today, Paul, which is something that I've continued to discover over my career. The soft skills, man, they still matter a lot. And the combination of the two are incredibly powerful.
[00:50:10] Host: Paul Barnhurst: Well said. I mean, when you combine someone with good technical skills and good soft skills, that's somebody you want to keep. You got a good employee. They're worth 100% worth so much when they can really manage relationships and provide insights.
[00:50:26] Guest: Jim Caltabiano: 100%. And it's and it's good for the organization. And it's great for the employee and the individual because you know you're contributing because we all want to contribute. We all do.
[00:50:35] Host: Paul Barnhurst: Yeah, we all want to make a difference. Nobody just wants to punch the clock every day. It gets really old after a while.
[00:50:39] Guest: Jim Caltabiano: Big time.
[00:50:40] Host: Paul Barnhurst: Thank you so much for joining me, Jim. I've really enjoyed chatting with you. It's been a real pleasure to spend a little bit of time with you and excited to share this with the audience.
[00:50:48] Guest: Jim Caltabiano: Thank you Paul, I really appreciate the time and I wish everybody out there good luck and good work and good insights as you move forward. Thank you guys. Appreciate it.
[00:50:58] Host: Paul Barnhurst: Good luck driving insights. And thanks again for being on the show Jim.
[00:51:03] Guest: Jim Caltabiano: Thanks for having me, Paul. Appreciate it.
[00:51:05] Host: Paul Barnhurst: Thanks for listening to FP&A tomorrow. If you enjoyed the show, please leave us a five star rating and a review on your podcast platform of choice. This allows us to continue to bring you great guests from around the globe. As a reminder, you can earn CPE credit by going to earmarkcpe.com, downloading the app, taking a short quiz, and getting your CPE certificate. To earn continuing education credits for the FPAC certification. Take the quiz on earmark and contact me, the show host for further details.