This episode features an interview with Laurie Krebs, CFO at Red Hat, the world’s leading provider of open source solutions, which was acquired by IBM in 2018 for $34B. Laurie has spent 35 years in finance, serving in leadership roles for companies like KPMG, Nortel and Cree. While her specialty has been tax, Laurie’s focus is also how to empower people. And it’s her work on team building, D&I and retention that has helped support high-performance individuals drive the impressive growth of billion-dollar companies. On this episode, Laurie discusses supporting other women in finance, developing a business continuity plan, and working to lead the world in the way of the hybrid cloud.
This episode features an interview with Laurie Krebs, CFO at Red Hat, the world’s leading provider of open source solutions, which was acquired by IBM in 2018 for $34B.
Laurie has spent 35 years in finance, serving in leadership roles for companies like KPMG, Nortel and Cree. While her specialty has been tax, Laurie’s focus is also how to empower people. And it’s her work on team building, D&I and retention that has helped support high-performance individuals drive the impressive growth of billion-dollar companies.
On this episode, Laurie discusses supporting other women in finance, developing a business continuity plan, and working to lead the world in the way of the hybrid cloud.
Quotes
*“In the last few years, the role of the CFO itself has shifted. We're now seen as an even more strategic role than we were a decade ago. We're evolving as a crucial part of helping organizations validate and execute our strategy, but at the same time, we're often seen as one of the first lines of defense in risk management.”
*“Data really helps propel companies forward and we can't live in a world without it today. It's how we track things. It’s how we see what's going off the rails. The more we can dive into the data, the more we understand the problem we’re trying to solve.”
*“It's also helpful to provide employees with highlighting the victory lap when things are working. It's always important to recognize success. As long as you don't get too complacent with it, that's where you get in trouble.”
*“I think one of the other interesting things on technology that we have learned over and over again is to make sure you put the processes in first that drive the result you want from the tool. So in other words, if you just put a tool in place without making sure you have the right processes, the right controls in place, um, then you might as well not put in the tools. So you always have to take the time and make sure that your own internal processes, education system, change management is all aligned to this wonderful tool that you're going to roll out. Otherwise it's not going to be successful.”
Time Stamps
*[0:28] Introducing Laurie Krebs, CFO at Red Hat
*[6:47] Red Hat’s journey to the hybrid cloud
*[8:43] Diversity initiatives
*[9:50] Starting the Women in Finance group
*[13:25] Cash Crossroads
*[20:53] Lessons learned from the pandemic
*[24:33] Considering a tech stack
*[26:03] The Playbook
*[33:12] Report from the Future
Sponsor
The Invisible Vault is powered by the team at Kyriba, the global leader in cloud treasury and finance solutions, empowering CFOs and their teams to transform how they activate liquidity as a dynamic, real-time vehicle for growth and value creation. To learn more visit www.kyriba.com
Links
Connect with Laurie on LinkedIn
Connect with Daniel on LinkedIn
Laurie Krebs: In the last few years, the role of the CFO itself has shifted. We're now seen as an even more strategic role than we were a decade ago. We're evolving as a crucial part of helping organizations validate and execute our strategy, but at the same time, we're often seen as one of the first lines of defense in risk management.
Narrator: Hello and welcome to The Invisible Vault.
This episode features an interview with Laurie Krebs, CFO at Red Hat, the world’s leading provider of enterprise open source solutions. In 2018, Red Hat was acquired by IBM for $34B, one of the largest tech acquisitions of all time.
Laurie has spent 35 years in finance, serving in leadership roles for companies like KPMG, Nortel and Cree. While her specialty has been tax, Laurie’s focus is also how to empower people. And it’s her work on team building, D&I and retention that has helped support high-performance individuals drive the impressive growth of billion-dollar companies.
On this episode, Laurie discusses supporting other women in finance, developing a business continuity plan, and working to lead the world in the way of the hybrid cloud.
But before we get into it, here’s a brief word from our sponsor…
Today we have a special guest host, Daniel Shaffer. He leads corporate communications at Kyriba and is the founder of the Invisible Vault podcast. So please enjoy this interview between your host, Daniel Shaffer, and Laurie Krebs, CFO at Red Hat.
Daniel Shaffer: Hi, I'm Daniel Shaffer, Today I have the pleasure of meeting with Laurie Krebs, CFO for Red Hat. Hi, Laurie, how are you doing today?
Laurie Krebs: Hey, Daniel. Great. Thanks for having me.
Daniel Shaffer: Wonderful. So such a pleasure to have you on the show. You come with a tremendous career as a CFO and also with a very unique and interesting background. So before we kind of dive into some of the [ -- ] amazing things that you've done at Red Hat can you tell us a little bit about how you got into finance? What really triggered that for you?
Laurie Krebs: Well, to be honest, I never really desired to have a career in finance. I actually, back in the day was good in math and science in school, but more importantly, I really loved people, especially helping people. So I originally was interested in pursuing a career in medicine as a doctor or a nurse. And right before college, actually, I volunteered in a hospital and I was assigned to the geriatric ward. And unfortunately that experience turned me around. As I found it really hard to care for all these people who were sad or, worse, were passing. And I don't know, I just kind of rocked my world a little bit. And I talked to my guidance counselor about it, and I had taken an accounting course in school and I understood that because, you know, the assets have to equal the liabilities and it was sort of like a Sudoku puzzle, right. The left side to equal the right side. And I thought, okay, I'll try this. So I'll go into accounting. So fast forward through college, I still wasn't sure I even wanted to go into the finance accounting world since I thought in my head that this meant I would be stuck working behind the same desk every day, punching numbers into a 10 key. And, but I was fortunate enough to get an insert internship with what is now today called KPMG. It wasn't 35 years ago called that, but it, and it was that experience that really opened my eyes to realizing that careers in accounting and finance can still involve people. You have customers and clients. You have staff to help develop. Overall I was working with such awesome people who actually many of whom became friends for life. So that really launched my career into accounting and finance, which then led to some twists and turns. And ultimately this role that I have here today, as CFO of Red Hat.
Daniel Shaffer: Definitely looking from the medical profession point of view, having a different interaction, but ultimately, as you're saying, you still have a team of people that you care for and can create opportunities in collaborating with them,. Whether it's through finance or medicine. So interesting connection there and certainly an unconventional path. Red Hat is known as the open source company. Just for the benefit of our audience. Can you tell us what Red Hat does today?
Laurie Krebs: Sure Red Hat creates open source operating systems on which any platform or application can run. And what we do is we are trying to lead the world in the way of the hybrid cloud. So you have a lot of workloads that you either have on premise, or you have today in a public cloud. What Red Hats' systems and tools and solutions allow you to do is maintain your workload wherever you want it in the world. And that could be on multi different clouds. It could be some on prem, some in the cloud, but it helps you balance the workload and efficiently run your business.
Daniel Shaffer: Ah, got it. So it sounds like you're saying the hybrid cloud really opened up the opportunity for more connectivity regardless of your location.
Laurie Krebs: That's right.
Daniel Shaffer: A lot of the multinational CFOs that we talk to have underscored exactly that point. And that is just the importance of having data at your fingertips at all times from around the world and with all of your collective finance teams in particular. Do you find that finance's role at Red Hat today is different than what it was 10 years ago?
Laurie Krebs: I do. I mean, it's definitely data, more data-driven and data focused, where I'm trying really hard to provide those critical insights that our business stakeholders need. A, I really value our team and my team in particular to be that business partner. So don't just add up the numbers, don't just berate people for not meeting their numbers, but help explain what happened, help, explain how the business has performed.
Daniel Shaffer: And, and since you have ownership by IBM, define that there's a more demand for data and reporting up through that structure.
Laurie Krebs: Well, IBM definitely likes their reports for sure. They are a big machine and to be that big, you need to have a lot of discipline in place and really make sure that we are connected and they know where they're operating everywhere around the world. I will say true to their word. When they acquired us two years ago in what is now the biggest software acquisition for $34 billion, they recognized IBM itself is in the cloud space, right. They have their own public cloud, but the Red Hat business operates across all clouds. So we call ourselves cloud agnostic. So we work with Microsoft and Amazon and all the players out there. So we needed to maintain our sense of neutrality as we move forward in the business. And IBM also wanted to be part of this hybrid cloud journey. And so together, know, I mean, they have left Red Hat to be the independent company. If you think about like Microsoft and LinkedIn, right? Those are two connected companies, but you think about them a little differently. So that's a lot of how Red Hat operates today within IBM. We definitely leverage their power and their expertise where we're needed and sometimes they come to us and look for doing things differently. So it's been a, it's been a great journey so far.
Daniel Shaffer: Indeed. And the, again, I'm hearing that theme of collaboration, just curious how, your role is in helping the team at Red Hat really explore new talent and cultivate diversity.
Laurie Krebs: Yeah. I mean, I will say that's something that Red Hat really values for sure. And something that we honestly have put more meaning or effort behind in the last two years or so. All along the way Red Hat, just like any other tech space has been challenged in the area of diversity. It's just the talent. Maybe it wasn't sought after. It was out there, but it wasn't sought after. And there we're just thinking about how to do things differently. I mean, a lot of time in my career, I came across, I won't say I was the only even female, right? I mean, of course, diversity spans all kinds of things. It's race. It's your preferences But I, in my own particular case, I experienced it a lot, being a female in an industry that was very male dominated. And I never necessarily always thought about it. I just always tried to do the best that I could at whatever job I was at. But as I've made my way, I have certainly found opportunities to pull that out of people. So, for example, when I got to Red Hat about five years ago now there were some other females in the finance area that were talking about a challenging situation that they both had in different groups, but it was a similar experience. And so I got talking to them and I was encouraging them that, hey, they weren't alone, and this stuff happens, right? We're all different people and we have different experiences, but that we could gain a lot by coming together and sharing these experiences and trying to learn from them. And so with that just encouraged them. And we started out with what was today called Women in Finance. And at the time we got about a hundred of our team associates to join, and we created this kind of no budget type of informal space where we connect and we talk and we shared concerns or challenges. And while it started out with a hundred women now has over 400 globally. We do things like organized charitable donations and have lunch and learns of talent. And actually one of the items I'm most proud of is that we actually brought about change in a much needed company policy through some of these discussions and sharing sessions. It came to light that some of the women had gone through unfortunate experience of suffering miscarriages. And further, what was upsetting is how that this was treated differently by individual managers at Red Hat. One woman was told that she would have to take her vacation time if she needed time to process and recover. Another manager told another woman that they could take whatever time they needed, right. So, and in fairness to our managers, we just actually had no policy on this in the U.S. So this amazing group of women benchmarked, what other companies do in this regard, even what countries mandate in that regard, and created an opportunity to speak with our comp and benefits team who were so open to hearing this. And within one month, we had a miscarriage bereavement policy that was rolled out to all our associates. So it's amazing what you can put your mind to when people are passionate about something. And what to me was most remarkable was the feedback from all associates, including men who also suffer if their wife suffers a miscarriage, right? They're going through this pain and suffering too. They may need time away. And now as a result of this effort something wonderful came out of it. And so. That's a lot of, kind of what we do. We really care about our associates at Red Hat and in caring, we try to entertain and think about diverse backgrounds and diverse talents that can be brought to the table for the better of everyone.
Daniel Shaffer: Oh, that's really inspiring to hear that story. Thank you for sharing that and really taking a champion role in bringing that to life. The colleagues that I work with, and I'm sure that you work with, all are looking for a healthy life and so that they can bring the best person that they are to the table when they dive into their work and if you can't do that you're definitely going to have a little bit of a challenge. It doesn't mean that you, yourself, aren't an incredible individual capable of managing your role. But when there are external things that are troubling you, there's no doubt that it makes an impact on your life. So our next section is called Crossroads. During this section, we like to talk about some of the challenges that we you've recently faced. And just to hear your ideas and kind of the exploration you took as a PR CFO at red hat to overcome some of those challenges. For your team just thinking about the pandemic, we're certainly not over it. And with the new Omicron virus variant, we're learning that we may be in this for even a longer haul than we thought. Has anything changed since the onset of the pandemic? And are you doing anything differently now?
Laurie Krebs: Yeah. I mean, I think pretty much everything has changed since the onset. And there are a lot of silver linings, right. Even though, as you said, we're still in it and it's still quite challenging. As CFO, both of our, both our company's global real estate group and our employee safety teams sit within my organization. So together with our, my Chief People Officer at Red Hat, we would meet with our respective teams and our cross-functional cross crisis management team to identify how to make changes such that we could conduct business while having our primary goal throughout this whole pandemic be the health and safety of our associates, first and foremost. I mean, we really, Red Hat is a place that really, truly cares about associates. And we try to put that into practice where we can. We don't always get it right, but we try really hard. But we were able to shut down our offices globally in one fell swoop. We did it effectively. It wasn't done without a lot of work. There was a lot of coordination and collaboration that took to do that. And albeit it was a big adjustment and a burden that was created for a lot of associates, mostly working parents with kids at home to school or elder care living in tight quarters with other families, right. But we knew we had to do that. And we were very fortunate that pre COVID, Red Hat was a company that emphasized flexibility. At that time, I would say pre COVID, we regularly had roughly 30% of our workforce who were already working fully remote on a global basis. Red Hat is a company that really goes after the talent, wherever it sits in the world. And so a lot of these associates work remotely. So we certainly knew how to do this effectively. And we had the tools, the video systems, the IT structure, the laptops to put it in place for everyone, which was great. I will say our teams got really creative. For example, our safety and security team created a dashboard that measured COVID impact by green, yellow, red phases that tied to offices opening and closing so that our associates knew at any point wherever they were, where they sat. I, this was initially early on when we thought we were just temporarily going to be shut down and then start to open again. And of course that opening's taken a lot longer than any of us wanted it to be. I would say our second concern behind the health and safety of our associates was to focus on how we could best support our customers as they were dealing with uncertainty. It was really important for us to support our customers and work with them through this unprecedented social and economic time. So to do this, we immediately created what we called a war room. And granted it was a virtual room, but nonetheless, we created a cross-functional leadership team that solely focused on the customer concession requests and challenges that we were receiving. Given, we do business in all industries. So we have a lot of customers, for example, in the travel industry was hit the hardest and all over the world. But we were fielding a lot of requests for payment deferrals, for extension of our subscription offerings, for discounts, et cetera. So this war room, which consisted of folks from my business finance team, my technical accounting team, my treasury team, as well as our sales ops, our sales, our deal desk and operations team, they would meet daily, every day, together in this war room. And they would decide collectively on how to resolve those requests in such a way that was a win for both Red Hat and the customer. It was very effective for those initial first couple of months, especially when there was a lot of panic with the economic outlook and before the world started to stabilize just ever so slightly. But I would say just like every other enterprise, we weren't even sure what Red Hat's financial situation would be or whether we would weather the storm. And as we moved on through the pandemic, it became clear that we would be working differently for quite a while going forward. And what we found was that the needs of our associates had shifted as the pandemic continued. And as such, our approach had to change with, along with their needs. So as much as our associates had the basic tools to work remotely, as I mentioned earlier, the laptops, video conferencing, et cetera, we were hearing that they needed additional tools to work from home, ranging from more bandwidth to better ergonomic chairs to sit in or a desk here and there, or even some relief to help offset the hours spent homeschooling kids. And as I started out saying, throughout this whole thing, our safety and health of our associates is what is most paramount to us. And we wanted to obviously help our associates, but we also had to remember we were still running a business ourselves and we wanted to make sure that we were protecting our own cash and resources, such that our own associates had a company to come back to when this was all over, so here again, I would say we got creative. I selected a cross-functional team within my own organization. So I took a person who on my team always thinks outside the box. I paired them with someone who manages our spend, knew what room there was there, someone who leads our technical accounting policy to know how to book whatever we were going to do. And then our expense policy to know what policies we had to ensure that whatever we came up with could be handled legally and was in compliance with the tax rules all over the world. And so out of this what I call brain trust was born what we call the associate package that touched on what we thought was, you know, a little bit of the needs of everyone without breaking the bank. And what they put together was a package that incorporated an associate stipend, so they could buy that desk or chair. And they also came up with what is now called quarterly recharge days, where once a quarter, we completely shut the company down. And these are days where, you can step away and not come back to 50 emails or 10 phone calls to return. So that whole, financial time away type of package that when we announced, it was so well received by our associates and they really felt very supported. And I'm really proud that to this day, we're still continuing with the recharge days and helping our associates with this stipend as well as they join the company.
Daniel Shaffer: Oh, that's an incredible discovery you found while really trying to maintain the balance of work and running the business for your colleagues and your clients. Is this the new normal for Red Hat?
Laurie Krebs: Yeah, Yeah I think so. I mean, obviously our, well, what we hope the new normal will be, will be the environment where we're safe enough to all come back. And we have, our offices around the world are all open at this point. Although we have asked most of our associates to continue to default to working from home where they can, but we're welcoming anybody that does need to get back, to come back in and we have safety things in place to, to make everybody feel safe. So that part is good. I will say we certainly have learned so many lessons in this pandemic on how to work more flexibility and how to work more inclusively. For example we at Red Hat operated over 80 offices in about 120 countries. And so we have an expansive and very global workforce, but what COVID taught us was how to run meetings that are more inclusive. And by this, I mean that pre COVID, we would often have broadcast meetings from our headquarters in the U.S. and have the rest of the world on video or a phone. And when you're on the receiving end of sometimes being the only one not in a room, it can be quite off-putting and non-inclusive. So finally everyone has gotten to what I would call live and day in the shoes of our remote associates or our global associates who aren't in our headquarter building. And this has created a new appreciation and guidelines for holding meetings going forward. Even when we return to offices, we hope to keep this discipline. So that's one example. I think of what we will be continue doing, going forward. I think another one within this theme of being more flexible, we're leaning in to meet our associates on where they want to work. So prior to COVID, as I mentioned, we essentially had two ways to work. We had 30% of our workforce were working remotely already, but the other 70% were in the office, right. And we weren't taking attendance or anything, but it wasn't really an established or well thought out practice. So as we return, hopefully early next year, we're promoting three different ways of working. We still have the remote associates. We still have those that want to be fully assigned to an office and come in every day. And now we have a third category of office flex where, you can work in the office between one and five days a week, according to your preference and the trade off is our introduction of a new desk reservation tool. And this is actually helping us significantly to effectively utilize real estate more efficiently because we were really running out of space. We have hired so many associates over the last couple of years, and this is the preferred prep preference of most of our associates at Red Hat. So I'd like to think it's a win-win for both Red Hat and for our associates. So.
Daniel Shaffer: Oh, that sounds great. I'm familiar with the system similar to that, we're utilizing that at Kyriba.
Laurie Krebs: That's right.
Daniel Shaffer: So kudos to you. Just curious about the way you go about doing business. I mean, you called it a war room, but really these cross-functional teams that you put together to help solve decisions in the moment, very collaborative in just the mindset. I, in fact, just a little research on a Fortune article I read where you were interviewed and saying that your technology investments are very collaborative. That's a great statement. And certainly I see reflective in all that you do. How do you make those decisions when you're thinking about the technology stack that you're evaluating for purchase?
Laurie Krebs: Yeah, I mean, I really think we need to take, we try to take a step back. I mean, Red Hat is a technology company itself, but you know, we like any other enterprises have growing pains and we look to where it makes sense to automate. That's where we're trying to focus these days. We really try to take the less valuable tasks that are more mundane and repetitive and try to automate that so that we can free up our associates to do more meaningful, more value add work. I mean, what we're finding is in today's market, I guess just compensation is important to associates. It's important to everybody, but so as much is the opportunity to know that you have a career and that you can look forward to developing yourself and growing with the company as it grows. So, so it's a combination of all of that, I would say.
Daniel Shaffer: Excellent. Couldn't agree with you more. There's been so many of the folks that I've had the pleasure of working with in that treasury purse role or a finance role that have those repetitive functions that are required, but with technology can be augmented or in some cases just replaced. So as you said, their career can evolve and grow to do some of the more strategic things that quite frankly are probably more fun.
Laurie Krebs: Yes for sure.
Daniel Shaffer: Well, listen, let's move on to the next segment of our podcast. It's called the Playbook. Given all the external market challenges considering the pandemic volatility in the market the shifts and changes of the geopolitical climate, I'm just curious, what do you find the most concerning?
Laurie Krebs: All the above for sure. Oh, goodness. Well, I would say, yeah, for sure. But in the last few years, the role of the CFO itself has shifted, right? We're now seen as an even more strategic role than we were a decade ago. We're evolving as a crucial part of helping organizations validate, execute our strategy, but at the same time we're often seen as one of the first lines of defense in risk management. So I would say even before the pandemic, risk management was getting increasingly difficult because business was changing faster than ever. Take the areas of digital transformation and the expanding regulatory environment. These two are examples alone about, you know, that bring about a steady increase in the complexity of risk management. I feel like with COVID today, CFOs are very focused on business continuity risk. And that was one area that we were laser focused on. And I'm proud to say we had pretty robust business continuity plan even before COVID. But you would look at, hey, can our organization survive as a business with the processes and the procedures that we have in place? And just as important, can we employ and retain the right critical talent that we need to grow our business? I think those two are the biggest focuses that we are laser focused on today. But you touched on the other one, which is clearly the economic landscape. I would say the first wave of COVID brought out, you know, flat out uncertainty, when everything shut down. You had lay offs, you had business closes, closings, and over time we still have a lot of economic uncertainty such that you have to think carefully about every investment you're making to ensure that it's sustainable in the long run, given the rollercoaster ride we are now on with inflation taking over, with us regressing in certain countries with this new COVID strain, it's always kind of, it's a balancing act. That's what I would call it.
Daniel Shaffer: Right. Yeah. And I read that your CEO, Paul Cormier was really pushing hard to overhaul the forecasting and budgeting models, had a strong belief that data and analytics were were obsolete. And we're looking to find a new way to reposition the company with a solid I would imagine plan for the future of it use of cash. Can you talk a little bit about that? I mean, you've mentioned the overhaul of digital transformation, but just curious where cash forecasting and understanding the economic landscape comes into play.
Laurie Krebs: Yeah. I mean, you hit it the right buzzwords, right. Being data-driven. So they had the area of data and analytics are crucial, in particular in my world to finance and helping us figure out where we're succeeding and where we can improve. I would say being data-driven to me means that we use data to help make decisions and make sure the initiatives we put in place are successful. At Red Hat, we have a, what I call a hub and spoke model, to data and analytics with our hub or our core data and analytics groups sitting in IT, and they truly own the one source of truth of all the data at the company. And then we have the spokes, who are a subset of this DNA team sitting in the various functions, including myself, having a team in finance, and they help us understand our data from a financial metric standpoint, to your point, Daniel, about, making sure we can know where our cash is around the world, at all times, how much and where it is and what future needs are coming up. And these collective teams run dashboards and visualize the key metrics that help us really understand where the business is. I would say as an open source company, we believe in the power of collaboration. And in analytics, that means we need to share our data across teams so that everyone has the right information they need to do their job. Visualizing data in dashboards provides a single accessible source of truth for most of our Red Hat associates to consistently work off of. I really see a lot of benefits in being data-driven. Even one example from last week, our CEO, Paul Cormier, who you just mentioned, was telling me he was calling on a prominent customer in terms of negotiating with them on their current subscription that they had with us, that customer was upset that our pricing had almost doubled in the offer that they were given. But our, but our CEO, Paul, he was ready for this conversation. As he simply explained to the customer that customer had started to use almost three times the amount of subscription portals than they had previously in what that executive was thinking he was paying for. So once the customer executive understood this data, he immediately recognized the value that they were getting and the deal was closed, right. So it's just an example of without data to help inform our CEO and our customer, this would have largely been a stalemate in my opinion. And, data really helps propel companies forward and we can't live in a world without it today, that's for sure.
Daniel Shaffer: That's such a great example of the use of data and dashboarding. And one of our CFOs that we had the pleasure of interviewing earlier on in the season, talked about the dashboarding as an opportunity to come to decision and agreement in a quick and efficient manner.
Laurie Krebs: Yeah. I it's really how we track things. You can see what's going off the rails as well. And then the more you can dive into the data behind that to really understand, I mean, one of the, one of the things I would say Paul is always known for saying, and what we try to, to wrap our head around is asking the question, "What problem are we trying to solve?" And making sure that we stick to that. And data really helps us to make sure that we're identifying what is that problem? What is the source that's causing the problem? And then we can go on and create a collaborative resolution to that. So, yeah, for sure.
Daniel Shaffer: Great leadership from Paul. And an excellent question to help us segue into the next segment called Report From the Future.
I think, as you discussed with us, Laurie, there's really not a playbook that anyone, especially in finance has been handed to say, here's the rules that you'll need to go forward given the changes that you've seen and experienced in such a short amount of time. Certainly if they were written yesterday, they'll have to be rewritten tomorrow. If you fast forward 10 years, what do you think that future of finance will look like?
Laurie Krebs: Gosh Daniel, a couple things come to mind. Again, it's hard not to talk about this without again, talking about data. The ability to read, understand act on data insights is probably one of the biggest business acumen skills that I, even today, continually emphasize with my team. And so that, you know, that awareness, that business acumen is really super critical. In addition, I really believe that the future of finance depends on professionals having an understanding of the business outside traditional finance areas. Again, so important to me that our team be true business partners, not just roll up the numbers, but really understand the stakeholder that we're helping facilitate their business with, understand how their business is performing, helping them drive solutions to change outcomes where things aren't working, and heck, it's also helpful to provide them with highlighting the victory lap so that they can take when things are working. It's always important to recognize success, right? As long as you don't get too complacent with it, that's where you get in trouble. I think the other skill set that has helped me in this role of CFO, as well as I think we'll be here in the future is to have a sense of empathy for what the business is going through. The historic role of the CFO has always been from the standpoint of got to make the numbers, we're driving to a plan to make the numbers. But what we need to appreciate is that we can't expect all this to happen just because we want it to, and there are so many different dynamics that our sales team faces that our products and technology team faces and in turn the marketing and all the support functions. So it's quite a balancing act. And it's just something that we have to recognize takes empathy. And people aren't motivated these days, just financially. It's all around how we work differently, how we collaborate with each other to succeed as a team. So I feel that empathy is really important.
Daniel Shaffer: You said that the CFO of the future needs to be empathetic. It needs to be a strategic business partner, which means having the capability to put a dashboard view and data in front of their business partners to help them navigate their own future within their business requirements. What would you add to that? What do you think the next generation of finance leaders needs to become a CFO?
Laurie Krebs: It think It's it's that plus the ability to balance things, right? And it's when you, when do you need to be operational versus strategic? It's all about being agile and flexible while maintaining a path forward. People have been talking for years about how planning has changed and we no longer create one, three five-year plan and you stick to it and you can't make changes. I mean, I think that's the biggest thing COVID has taught us is we have absolutely have to be flexible in the way we think, in the way we drive our business forward, and that can help us maintain successful operations. I think the best example, again, during this pandemic, nobody could have foreseen this and without being flexible on our planning, we would have been much slower to react and likely not have been focused on what was really needed at the time, which is to support our business and our associates. I, I would say even personally, right when the pandemic hit, strategically, we're marching towards a very aggressive growth in sales and in hiring. But then when COVID hit, we were able to pivot to focus operationally on what was needed at the time, which was to reset our sales quotas for our sales team. And also pause on some of the incremental hiring we had in our strategic plan. And both of these pivots allowed us to ensure that our business would be successful and that we can maintain the jobs of all the associates that currently worked at Red Hat. This was a win-win particularly since our business actually flourished despite all that through COVID. So we're I think all of that in summary, was because of this balancing act. We S we said, okay, I know I can see the strategic plan that we're marching forward, and we don't want to sacrifice the future. But what we also had to do was focus on the important things operationally at hand at the time. And I think we did a good job of balancing both.
Daniel Shaffer: Sounds like it. I had a couple of burning questions. I hope we could get to. A great, thank you. So, I mean, it sounds like Red Hat is just one of those exemplary companies that has a tremendous visionary leader that's put together the right teams and continues based on its mission and guidance on how to grow teams. As things seem to need to be happening in real time, th the shift from one quarter to the next brings new challenges. And you talked a little bit about data dashboards and automation. So I have to ask about technology. Are you looking for finance technology for Red Hat that enables your teams not just what you're given out of the box from an ERP, for example.
Laurie Krebs: I gotcha. Sure. Oh yeah. For, absolutely. I think we are finding, and maybe this is a little bit, the Red Hat culture, is that one size does not fit all, right. It's we take the best and the brightest of everything and put it together. And we're very open and transparent in working through that. And that seems to drive really great outcomes. I think the same holds true for when you look at finance technology, I mean, there's so many tools and there's so many different ways to deploy those tools. And I think it's definitely a situation where you have to. Where no one size fits all. And what works, for example, give you this real example. There are a lot of great ERP systems out there, but when you have a subscription business like Red Hat has, there's only a couple that actually catered towards the subscription financial model. So you have to really look hard at, again, going back to that question, what problem are we trying to solve? And then you make sure that you look at all the individual solutions. Very doubtful that you'll have one platform that works for every facet of finance that you need. So definitely one of those you gotta do your homework and make sure that whatever tool or technology you're driving down that path is really gonna be the one that's going to help drive a solution for what you're trying to solve.
Daniel Shaffer: Got it. Yeah. That the one size fits all is one aspect. And the other is that every one in your teams, whether it's treasury, a FP and a, or other specialized teams are really looking for a unique way to solve a problem. And and that takes maybe a mix, a blend or a composition of different technologies to enable that to happen.
Laurie Krebs: Yeah. I think one of the other interesting things on technology that we have learned over and over again is to make sure you put the processes in first that drive the result you want from the tool. So in other words, if you just put a tool in place without making sure you have the right processes, the right controls in place then you might as well not put in the tools. So you always have to take the time and make sure that. Your own internal processes, education system, change management is all aligned to this wonderful tool that you're going to roll out. Otherwise it's not going to be successful.
Daniel Shaffer: Oh, that's great. Great guidance on getting your project set up from the beginning based on a use case that needs, as you said the right problem to be the great question to ask, to solve the problem. Just last question section here we have called Quick Hits and I know we're just about out of time. So I just have two questions for you. One is is an easy one. I'm just curious. Are you thinking about CFOs in your industry as peers or competitors?
Laurie Krebs: Well, I will share that Red Hat embraces the spirit of what we call co-opetition. So we work with other organizations that are our customers, partners, and our competitors to all learn from and support each other along the way. People often say that Red Hat is the Switzerland of the software industry. Right? I will say I embrace the same approach with my peers and out there. Especially during the pandemic, it became really important that we all shared what we were learning, what we were doing for our associates. We were constantly comparing notes. I was in some CFO support groups, if you will. Just to say, gosh, are you given your associates stipends? Are you letting them work from home? Are you requiring them to be in the office? Like having that group of peers that really understood exactly what you were going through was really invaluable.
Daniel Shaffer: Excellent. Well embracing the true model of open source on every level.
Laurie Krebs: That's right. Very good. Daniel, you got it.
Daniel Shaffer: I love it. Well, Laurie, it has been an absolute pleasure to speak with you today. And I do look forward to an opportunity to touch base again, maybe in person at a conference, or maybe we can have you back on the Invisible Vault podcast.
Laurie Krebs: All right. Well, thank you Daniel. For having me. It's been my pleasure.
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