Jeff Richard is not in the office today, but that doesn’t mean he’s not at work. The 44-year-old CFO of Safety-Kleen Systems, a $1.3 billion, privately held “re-refiner” of oil and provider of environmental services, is a guy who likes to get out in the field. He’s not opposed to riding in the trucks, either. He’s right at home on the shop floor, too.
Richard cut his teeth in a variety of finance posts at $17 billion Tyco International, as CFO of Jacuzzi, and as head of financial planning and analysis at Electronic Data Systems. In 2006 Richard got a chance to really spread his wings when he became CFO and chief operating officer of Pavestone, where, he says, “I was basically running the company.” In 2010 he joined Safety-Kleen as the company’s finance chief, but it’s clear that his focus extends to virtually all parts of the company, including sales. Here he describes why CFOs — or, at least, some CFOs — should not only get in front of customers but master the art of getting to yes.
When did you become such a fan of getting out of the office?
I’m an operations guy trapped in a CFO’s body, and I’ve always been geared that way. When I stepped into the COO role in my previous job, I enjoyed getting out and talking to our customers and our employees and learning the business from the ground up. So when I came to Safety-Kleen, I had that type of COO mentality. I hit the road and traveled around to our branches and went to the refineries and did what we call “ride-alongs” to pick up oil and containerized waste and all that good stuff. That’s the way you really get to learn a company.
As part of that, you are a big believer that CFOs can be effective salespeople. Why do you believe that?
There are situations where the CFO can come into a prospective account at a different level [from a salesperson]. I can talk to the CFO or the chief sustainability officer or even the CEO and get them interested, and they will sit with me and my sales guys when we meet with the VP of fleet operations or someone at a similar level. And then we’re in a position to push [a deal] through and be successful.
How hard do you push?
I try hard not to be “salesy” and not to be self-serving. I truly believe in the product that we sell, so to me it’s an easy sell. Safety-Kleen offers something that companies need and they just don’t know about it yet. So usually when I make that first contact it’s not about, “Hey, I want to talk to you about what we can do for you.” It’s more a case of networking — “Hey, I just want to talk to you because you’re my fellow CFO and maybe we can get to know each other’s experiences.” At one client, I had a couple of lunches with the CFO before I even mentioned anything about doing business. And at some point I get a sales guy in there and let him take over.
Do the members of your sales force feel like you’re muscling in on their territory?
At my previous company, I got us into an account we had been trying to crack for 18 years, just by cold-calling the CEO, and I think the sales guy was pretty upset about that. But so far I haven’t heard anything negative, partly because of my title — I mean, they can’t get mad at the CFO — and partly because the results are there. I’m not a commissioned person; the salesperson who manages the account gets the commission.
Do you think this is something that every CFO can, or should, do?
When I go to conferences geared toward CFOs, you can almost draw a line down the room, with what I call traditional CFOs — the kinds of people who came up through treasury or audit or something like that and have never really gotten out and met folks — on one side, and people who are comfortable with operations on the other. On the one hand, I think it has to be part of your personality. On the other hand, I think it’s very useful for everyone to get out and do it. Sometimes the workload might be an issue, and in some cases you may have a very strong sales team or a CEO who is very sales- oriented, so there’s not room for the CFO there. You have to have a CEO and a board that are comfortable with letting the CFO hit the street a little bit.
How do you prepare for a sales call, assuming the networking has gotten to a point where you’re ready to make a pitch?
Companies want to go green, and they are also being pushed by others in their supply chains — Wal-Mart is one big example — to be more green. We did some research, and we found that something like 80% of large companies have a chief sustainability officer or some kind of sustainability program, and it’s usually described on their website. So I go to their website and print it out and say to them, “Here’s your program; you know, green oil would fit right here.”
One company talked about how it disposes of used oil, but it didn’t say that it recycles the oil. So our pitch was, “You’re saying that you pick up used oil — basically, you don’t pour it down the gutter, which is a good thing. But if you get one point [of public goodwill] for disposing of used oil properly, you’ll get many more points by doing a closed loop and reusing the re-refined oil.”
So there is a mix of a marketing opportunity to appear green, peer pressure to actually be green, and a growing awareness that apart from those motivations there is intrinsic economic and environmental value. Is that translating into more business for you?
We’re growing like crazy; this past year we’re up 18% in revenue. The green side has just taken off. We’ve been recycling oil for about 25 years, and most of our re-refined oil has been sold to private-label companies that sell through convenience stores, grocery stores, and big chains. But now green has actually taken off to the point where Valvoline has kicked off a refined-oil product called NextGen, a 50/50 blend of new and recycled oil. It’s the first time in history that a major marketer has put its brand behind re-refined oil. That has been really good for our industry.
With your core market now enjoying so much success, are you contemplating expanding into adjacent products or services or new geographic regions?
We’re pursuing “renewable” businesses. We currently collect 200 million gallons of used oil and refine it back to a pure base lube to be used again in automobiles. It’s a closed-loop process. We see this market really taking off, and therefore we’re investing in a third re-refinery.
How has your operations experience made you a better CFO?
To make proper investment decisions on capex, marketing, business development, and so on, the CFO has to know the business. It’s easier to approve a capital project related to a facility when you’ve actually been to the facility and you know the facility manager and understand his opportunity. It’s easier to support and approve a marketing campaign when you know the strategy of the product and how it fits with the strategy of the company as a whole. Also, being operationally oriented makes you more of a partner to the CEO, and today CEOs want partners, not just finance and accounting guys hugging GAAP manuals.