This week’s jobtalk is with former Chief Financial Officer (CFO) and Chief Operating Officer of JK Group, Rita Kusler, who also happens to be my stepmother. Kusler’s living proof that you can work alongside your spouse and still have a successful marriage. While her interview is long, it is packed with useful information for anyone who wants to know what it takes to run a successful business.
Title: Chief of Operations/Chief Operating Officer of JK Group stepped down in 2010
B.A. in Finance, Rider University, 1975
M.A. Finance, Rider University, 1980
How did you become the CFO/COO of JK Group?
You’re not going to like that answer.
Because you’re married to one of the founders?
Yeah… The answer is that I was working for another company and I was extremely unhappy. I was unhappy with myself and unhappy with my career path. And Roy, your dad, had started a company and it was growing to a point where he needed expertise that I had, but also someone who he could trust. He said, “Well, why don’t you come work for me?” And I knew enough at this point that I wasn’t going to be happy working for another corporation just being another person, being another cog in a corporation. I knew I wasn’t going to want to do that again. So I took a risk and will say that I wasn’t a risk taker. It was almost like the risk was the only option that I had and I regret that. It did work out very well for my personality and my skills.
Why did you see it as a risk at that time?
It was a very young company that may or may not have succeeded. And then working with a spouse, which I had been warned that in no uncertain terms, inevitably leads to divorce, was another risk My mother broke into tears when I told her I was going to work with Roy.
I didn’t know that.
She just broke down and cried because she was convinced I was going to get divorced.
So there were two major risks. If the company didn’t last, now neither one of us had a fallback as far as income. Could we have gotten a job? Yes. But, neither one of us would have had a job right away if the company went south. And, would we also have been single at the same time the company went south? It was a big risk. A very big risk, I think. I’m not saying this with pride that I was this big risk taker. I felt my back was to a wall and that was the only way I was going to take that kind of risk.
How long after you were at JK did you start feeling comfortable?
I enjoyed it very quickly. I would say within six months I felt comfortable that I had a role besides spouse and that I was going to add value to the company. And not in the areas that I expected. The financial end was minor. The area that I added the most value to the most quickly was in the management area. Fortunately, your father’s and my skill sets were very different. Things that he didn’t like to do I found I was pretty good at.
Management, dealing with people, supervising, delegation, creating structure within a process. That’s what made it so interesting. When you find areas of strength that you never even knew that you had it’s interesting. When I found out my personality was actually an asset it was shocking.
What are the responsibilities of a CFO?
Cash-in, cash out – short answer. It’s the management of the cash flow more than anything else. We were very fortunate that cash in almost always exceeded cash out. So it is management of a process to make sure that your billing covers what you do, covers your expenses, allows profitability and then can bring in business on a consistent basis to handle the cash out.
So you would oversee all the cash coming in and the cash going out?
Absolutely. That’s a short answer because that covers everything from process, cost efficiency of process, pricing of process, purchasing… If there’s no money, you can’t do anything. If you aren’t charging the right amount for a process, you’re not going to have a profit. You have to be able to sell the cost to the client, bring in enough to have a profit, be able to collect it to have a cash flow, and be able to manage the dispersal so that despite what you may want, it has to be in line with what you can spend.
Explain what you mean by process.
Functionality. JK Group provides a service. A service isn’t a widget. You don’t have a concrete manufacturing process that is a little bit easier to ascertain direct cost to. When you provide a service, how do you provide that service when it’s not the same for every customer? Service to one customer and service to another may look the same on paper, but it may not require the same activity. So it was always making sure that what you were charging for the service – the process of providing the service the client wanted – was priced in a way that was sellable to the client and profitable to the company.
Because you have to take into account how quickly the staff can perform a specific function at a quality that warrants the price you’re asking?
Right. And one of the advantages of starting at a company so young is that I knew the minutiae of the company, which can be critical to understanding what you’re costing, why a process takes longer or less time than you may think at first pass, then selling that to the client. The client isn’t just going to roll over and say okay, I’ll buy your service. The client has to understand what they’re getting and feel confident that it’s a fair price for the service; at the same time, they have to understand the limitations of the service.
What are the responsibilities of a COO?
That’s more internal and is the management of the internal operations. The COO works on the structure of the company. The COO has to make sure that each department has its own controls and each department has the ability to delegate and be self sufficient, and to ensure that all the departments then work well together. So it is really geared internally to the corporation. You have to have structure so the company can grow.
Did it ever get to be too much acting as both a CFO and COO?
I’m going quote your father: “Nope.” If you really like what you’re doing, it is never too much.
You never felt spread too thin?
No. One of the things I found out about myself is that I truly enjoyed being in control. I probably wouldn’t have enjoyed it as well as if I were filling just one of those roles instead of both. The roles aren’t black and white. Finance can control what you can and cannot buy. Operations wants to say we can’t do it for this amount of money. Finance will say that you have to. So if I had to share the roles, it would have been a lot less enjoyable. I like getting my hands dirty. I like completing a process. I don’t like to go in and give an opinion and walk away from it. When something didn’t go right, it was my responsibility to work on it. Having all of that on my plate actually fit my personality better than it would have to have a more limited role.
Since JK Group has been sold and taken over by new owners did they keep CFO and COO as one person?
They are moving to have it be two people, which it really should be. As the company grows, both roles can’t be handled all by one individual. I knew doing both roles was a finite idea; it had to be split in order for the company to continue its growth.
What were some of the challenges you experienced as a CFO/COO?
Some people are idiots… Also, when you have a small company, the ability to absorb individuality and different skill sets is easier than it is as you become larger; when you become larger you need to have rules and conformity. My style is to allow individuality and to allow individual goals. It becomes less and less viable to do so as the company gets larger. The challenge that was the hardest was dealing with the conflict between wanting to have a more free-form environment and needing to set guidelines and quantifiable standards. It was exhausting to deal with that. Individuals usually want to be individuals and a corporation needs structure. It’s a tough balance.
Did you ever find any solutions to that challenge?
Not at all.
I just kept testing it. I’d go from creating rules to suspending the rules. Why have rules when 90 percent of the people abide by it? Then it became more of an attitude that if someone became an outlier and couldn’t conform to being part of a team they’d have to get cut. But at the same time, with the legality of our system, when it comes to employment and human resource policies, you have to have rules. You have to have things well defined. No, I have no solution for it whatsoever.
What did you love about your job?
Every single day was different. We were creating an industry. There really wasn’t this industry before; we were creating a product. Every day I felt tested. Every day I felt I did pretty well with the tests. I loved it. I loved the challenges of working with individuals and customers; I loved working in a niche industry.
As the CFO and COO, what were you hours like? Did you have a regular nine to five schedule?
There was one day I think I worked from nine to five. I probably didn’t feel well. The hours are eight to eight, seven days a week or pretty close. One of things you always hear about starting your own business is that you can make your own hours. You can. You can make them as long as you want to make them. Your father and I were fortunate that we were both on the same hamster wheel so there wasn’t stress on either one of us to put in fewer hours.
It didn’t create the home pressure that I know it created greatly on Jack (Jack is a pseudonym, and was the other co-founder of JK Group). His wife worked a “normal” job, so she expected to see her husband once in a while. I’m not going to lie, there were days when I thought I would have to shoot myself to make myself go to work. There are those days and times when you get tired. And there are times when you have to apologize to your family because you can’t make a get-together. There are a lot of downsides. But I don’t see how you can give your all to something like this without it being your life. It is your life.
Describe a typical day from beginning to end.
Early into the corporation, a typical day was, more-or-less, built around processes that we knew we were going to need. I’d sit with employees and figure out what a procedure should be and test it. In the end, the job became a little bit more reactive because the company was growing so rapidly.
It was less about planning and more about reacting. That wasn’t healthy for the company or for me. It was growing too rapidly and we didn’t have resources to be able to delegate functions like it needed to be done.
Toward the end of my career, my day began with reading emails. By the time 9 a.m. came around, my day was laid out before me. I either would be responding to client requests or to situations within the company where a process didn’t go well, and we had to now fix it. We were fixing more than we were establishing new procedures. In the beginning, we were establishing a lot of procedures, which was really, really great. Most of them stood the test of time. However, as new types of clients and services were added there were stressors on those processes. So it made my day more reactive because we had to fix problems.
What advice would you give to someone who wants to be in a leadership role in a business such as yours? You know, someone who’s going out and wants to make it to the top?
No I didn’t make it to the top.
But you were the top.
In a very small company.
Still, it was a successful company with 200 hundred employees. It’s a big role.
My advice is to understand yourself and what you can and can’t do.
Any advice for figuring out how to do that?
Make a lot of mistakes.The first time you do something, it will be wrong. The learning curve comes from asking why it was wrong. I always resented programmers. They get to call their mistakes bugs. The rest of the world has to call mistakes a screw-up. But how you find out what you can do and what you can’t do is by not running away from your mistakes.
Do you have any recommended reading?
No. Of course you need to stay abreast of your area. You can read all of these books on leadership and management. And when you put that book down and walk into work the next day, when it comes to someone that comes into your office and starts to whine to you about something, you have to figure out what to do.
I think you can improve your skills, but it comes from practice, not from reading. It’s like reading a book to learn how to play tennis. The book will help, but you can read every single book in the world on tennis and it doesn’t mean you’ll be able to play it. You have to go out and do it.
What type of person won’t be a successful CFO?
It is not as black and white as people think it is. Non-financial people seem to view it as a very black-and-white career. Its basis is. But if you want to be a CFO in a corporation, you have to understand the corporation, and then how to tie your learned skills into that corporation. That means that you have to understand what the corporation needs.
If you don’t understand that and don’t get truly familiar with the entity that you are working within, your education will not allow you to succeed. The education is the base requirement. If you are going to be a CFO, you are going to be part of a team. You have to be able to deal with the rest of the team. You have to be able to understand every component of the business besides your skill set in your one area of expertise.
Are there any core skills that a CFO/COO does need?
Absolutely. You need basic accounting and financial functions that you learn in school. You can learn them on your own, but you’re never going to get hired. You need to be able to understand all accounting processes; be able to deal with a bank; be able to read an income statement. Those are your basic skills. They won’t bring you to a CFO position alone. You need the personal involvement in the corporation itself. You need to be willing to do new things.
I’m going to tell you a story. This guy I know, let’s call him Chuck, works at a business. One day Chuck’s boss said to Chuck, “Can you do an analysis of the effectiveness of this process?” Chuck’s first reaction was, “That’ll take me a long time.” He’s never going to be a CFO. Of course it’s going to take a long time. You should be excited about the possibility of analyzing something.
What should be going through your mind when someone asks you to do something is, “How come I didn’t think of that?” and “I didn’t think of it, but I’m excited to be part of it,” and “I have no idea how it’s going to get done, but that’s my job and that’s going to be the fun part of it.” If you don’t get really excited about new opportunities, don’t go into business for yourself and don’t think you’re going to rise to the top in any group.