Good morning,
“When we look at technology investments, we don’t make them in a vacuum.”
That’s what Laurie Krebs, senior vice president and chief financial officer at Red Hat told me in a conversation about her leadership style.
Krebs said she’s collaborative when it comes to making investments in technology. The software company’s Enterprise Project Plan consists of a cross-section of leadership from finance, HR, marketing, IT and other functions that come together to discuss their needs before going forth with major purchases.
This collaborative approach has it roots early in her career when she wasn’t sure she wanted to go the accounting route. “In fact, I wanted to be a doctor or a nurse because I love people,” she said.
But after completing an internship in the geriatrics ward of a hospital, she got too attached to the aging patients, some at the final stages of their lives, which took an emotional toll Krebs said. So she decided to stick with numbers. But that path would ultimately lead her back to being a people person.
Krebs began her current role in October 2019 but joined the company in 2016 as the vice president of global tax. Red Hat was acquired by IBM in July 2019 for $34 billion. Krebs said she has a different leadership approach than her predecessor. “When I got the CFO role, we were already a wholly owned subsidiary of IBM,” she explained. “I’m not meeting with investors, like my predecessor.”
Krebs said what she learned in her career in public accounting and then the industry setting is—“yes, you have to know numbers, but it’s a lot about people.” She added, “I do have a very empathetic leadership style.”
Empathy is actually one of the three skillsets financial leaders will need to focus on in 2021 and beyond, according to Steve Gallucci, Deloitte’s U.S. national managing partner and head of its CFO program.
“I took a very unconventional path to the CFO chair,” Krebs said. Though she may not have vast experience in all of the varied areas of a C-suite financial leader, in her career, she surrounded herself with “really good people that are really technically proficient in what they do,” Krebs explained. “And then I empower them and let them go. I’m there to support them.”
At the onset of the pandemic, IBM reported a drop in sales in the first quarter of 2020; but cloud revenue increased 19% to $5.4 billion, driven by Red Hat. IBM is continuing to place its bet on hybrid cloud and artificial intelligence.
Red Hat was on “a growth trajectory,” when the pandemic hit, planning to hire thousands of associates in all divisions, Krebs said. But the company reallocated funds allotted for hiring toward employee retention and paying its current employees instead. After reviewing employee surveys in regard to support, her thoughts were, “Let me grab my finance team; and let’s figure out how to make that work,” Krebs said.
Join me back here tomorrow morning. I’ll be looking at the growing trend of tying compensation to DEI targets. See you then.
Sheryl Estrada
sheryl.estrada@fortune.com
Big deal
A recent report by Accenture highlighted an "elite group" among CFOs surveyed that have transformed their roles effectively, resulting in positive changes to their organizations' top-line growth and bottom-line profitability. "In organizations that far exceeded revenue growth expectations over the past year, CFOs have occupied new and expanded roles: economic guardian, architect of business value and catalyst of digital strategy," according to Accenture.
Going deeper
“The State of Social Media: After a Year of Transformation, Executives Are All-In on Social,” a report released by Sprout Social, took a look at the use of social media as a business strategy. More than half (59%) of executives surveyed by The Harris Poll anticipated their use of social media to increase over the next three years; and 95% of executives agreed companies will more heavily rely on social data to identify business opportunities.
Leaderboard
Baris Oran was named CFO of GXO Logistics, Inc., the intended spin-off of XPO’s logistics business. Oran will join XPO as CFO of the logistics segment, effective May 2021, and will lead GXO’s global finance organization when the planned separation is complete.
Christopher L. Tucker was named SVP and CFO at ESCO Technologies Inc., effective April 19. Tucker succeeds Gary E. Muenster who announced Dec. 7 his plans to retire after 31 years with the company, serving as CFO for the past 18 years.
Overheard
"Right now there's no talk about having the robot enter the building and navigate an elevator."
— Chipotle CFO Jack Hartung on the company's plan to launch a fleet of delivery robots, as told to Cheddar.
