The market for pet brands is enormous. Two-thirds of American households own a pet and collectively spent $136.8 billion on them in 2022. In this market, Chewy is winning the hearts of owners. The pet-food, health, and supplies company is famous for providing portraits, gifts, free food, and handwritten notes that delight pet owners. In this episode, Matthew Herbert, Chewy Director of Finance, reveals the FP&A undercoat that keeps this Fortune 500 favorite purring.
Herbert says customer service at the company is in “my opinion the strongest moat within the organization…it has its own finance arm, and it has the backing and support of technology and other resources to make it successful because we really believe that we’re here to provide a delightful experience for our customers. Pets are part of the family, and we want our customers to know that we view them that way.”
In this episode:
- How Chewy does FP&A
- What KPIs does FP&A manage at Chewy and how its set up
- Using data to help tell the story at Chewy
- How Matt overcame adversity, such as being laid off and team conflicts faced
- Leading FP&A at the fortune 500 high growth eCommerce company
- Secrets to effective business partnering
- Insights from 15 years of Investment Banking, Programming, Retail, Consumer Products, and eCommerce experience
- The impact of being a self-taught programmer on a career in finance
- Why finance remains the best role for strategic impact supporting C-Suite Executives
- His brand-new training courses (https://biztrix.us/) based on best-in-class Excel, PowerPoint, Word, SQL and VBA experience
Links
Follow Matthew Herbert on LinkedIn
Matthew’s training course at https://biztrix.us/
Paul Barnhurst:
Hello everyone. Welcome to FP&A Today, I am your host, Paul Barnhurst, aka The FP&A Guy. FP&A Today is brought to you by Datarails, the financial planning and analysis platform for Excel users. Every week we welcome a leader from the world of financial planning and analysis. Today we are delighted to be joined by Matt Herbert. Matt, welcome to the show.
Matthew Herbert:
Thanks Paul for having me.
Paul Barnhurst:
Yeah, really excited to have you here. So lemme give you a little bit of an introduction about Matt. He currently works for Chewy, the e-commerce pet retailer. He has worked for such global brands as Walmart and Lego. In addition to Chewy, he worked, internationally in Seoul, Korea for Lego. He graduated from BYU Go Cougars. That’s my alma mater, so I gotta give a shout out there. He did a business finance degree. So we’re gonna jump right in to one of our kind of favorite questions we’d like to start with. Tell me about the worst or most challenging budget experience you’ve had in your career.
Matthew Herbert:
Yeah. This one definitely would have to harken back to the days of Walmart, where as you can imagine, the size of information and data that flows through that organization is huge. We had over 4,300 stores. The division that I was in had three different departments and the P&Ll probably crossed 30 different line items. Mm-Hmm. <affirmative>, so you’re talking 90 different line items, 12 different periods. If you add in years, that’s extra for 4,300 stores. And we built this really complicated complex model. Walmart’s all about saving resources. So it was just myself and one other person. And I had actually unknowingly shifted one of my cells to the left by one. So all of the data from a seasonality perspective was moved by one period. And so, as you can imagine, all of the quarters are wrong. All of the years are wrong.
All of the roll-ups just ended up being a bit of a disaster. And what made it so bad is because there’s so much volume of data and trying to figure out what looks good, what doesn’t look good, we ended up sending it out to our business partners and it took one of the regional vice presidents to kind of scratch his head and go, something about this just does not seem right.There’s no way that can be the way that it’s, so obviously we then took it back, tried to do the root cause analysis and it was like, oh.
Paul Barnhurst:
Yep, <laugh>,
Matthew Herbert:
He is right. And he is right because we’re off by one cell. So luckily it had not made it to the point where it was uploaded into the systems or it was approved, made the change, recast all the budgets, sent it back out. But that was one of those critical learning moments where it was like, okay, what are the mechanisms really that could be put in place to avoid this type of error from happening in future?
Paul Barnhurst:
Yes. Shifting cells I think is one we’ve all dealt with at some level where something’s often a model by a row or a record. I one time loaded an entire country in the wrong currency. Fortunately it was Poland, which for this business was one of our smallest, you know, markets globally. So the revenue amount was only like $40,000 for the whole year. Yeah. So even though that market hated me, it didn’t make a difference at a corporate or a global level. Because you know, American Express multi-billion dollar company, 40,000 is a rounding error. Yeah,
Matthew Herbert:
Yeah.
Paul Barnhurst:
But it still wasn’t fun. I felt bad for the country. They weren’t very happy
Matthew Herbert:
No, exactly. That’s a tough period to go through.
Paul Barnhurst:
Exactly. So I think we’ve, we’ve all been there and I really like how you shared, you know, kind of the learning experiences, just the importance of double and triple checking work, having those checks built in for those type of things. Yeah. To try to find them before you send them out to a regional manager and they look at it and go, something’s not right. I Yeah, you need to go back and figure this out. I mean, that’s at least better than like you said, loading it and having that get rolled up into a corporate budget and then, you know, first quarter comes and you’re way off and Yeah. Kinda explain that, that that’s the worst situation when that happens.
Matthew Herbert:
Yeah. That would not be a fun bridging period at all.
Paul Barnhurst:
No. Yeah. I’ve had, I’ve, bridging periods is another story. I, when I worked for American Express, I was in business travel and we had huge contracts that would one year they’d been in place for a whole year and the next year we’d continue to operate for six months without the contract and then we’d sign it and recognize all the revenue. So we had one year where I think we were a hundred million ahead of plan, but we were still come telling themtwe were gonna come in behind, you know, and this is like six months in, they kept asking us for more revenue because we had so much movement of all the contracts and Yeah. And things like that, that we’re like, no, all that favorability is timing. Like that can’t be, you have to try to bridge it all for them. And it took forever Yeah. To walk through those bridges. So I can relate that was a challenging one to try to explain every quarter and month because of huge timing variances that had nothing to do with the underlying business.
Matthew Herbert:
Yeah.
Paul Barnhurst:
Well, why don’t we start with you telling us a little bit about yourself, you know, kinda your background and how you ended up where you’re at today.
Matthew Herbert:
Yeah, definitely. I think one of the important pieces to note and definitely something that played into the future opportunity at Lego to work internationally is after I graduated high school, I served a two year mission for the Church of Jesus Christ, the Latter-Day Saints. And that was in Korea. So having learned the language and associated with the culture and the people later on little did I know would play into the opportunity to move internationally, but as you said, went to Brigham Young University, graduated in finance, there was a bit of a journey to find the business school thought I was gonna become a dentist, a pharmacist at one point in time, a statistician, maybe <laugh>, and ended up in business and finance. I worked for Credit Suisse coming out of school as a generalist where we were in the Los Angeles office. So we covered a bunch of different products and we covered a multiple different industries.
So it’s unique in the setup of investment banking ’cause most people are tied to a specific product in a specific industry. Obviously cut my teeth there and learned an immense amount through modeling, working with C-level executives as a very young professional doing big deals on the corporate side. Dovetailed into a smaller operating company called Melaleuca, which is kind of a consumer product company that’s word of mouth marketing led for a short period of time. That ultimately led to Walmart where I was there for four years in both the health and wellness department and marketing finance. Again, both of those functions were finance related. Went to Lego, which their US office is up in Connecticut and they’ve made an announcement to move to Boston, but supported the US business for two years and that’s when the opportunity to go to Korea happened. So it was an expat over in South Korea, running finance, working hand in hand with the general manager there for three years. And then when I came back to the US, actually shifted away from Lego and came to Chewy. And I’ve been at Chewy for just shy of about 20 months now.
Paul Barnhurst:
Okay. Thank you for the background. Appreciate it. What we’re gonna do now is, this is called our get to know you section, so you get no more than 30 seconds free to each answer. So, you know, basically keep it brief. We have four questions we’re gonna run through here. The first is, what is something interesting about you that not many people would know? Something that makes you unique?
Matthew Herbert:
Yeah. I think on the surface at least from the pedigree as I shared it, it’s very finance focused and my whole career has been there, but I’m a self-taught programmer. So grew up in what one of my friends calls kindergarten playground of VBA extremely fluent there that dovetailed naturally into SQL. And so I’ve architected and built and administrative databases and then that also kind of dovetailed into c-Sharp full-fledged object-oriented language programming. So that’s something that’s unique because it’s not often in the finance world that I rubbed shoulders with people who have a blend of strong finance strategy, investment banking type background and computer programming.
Paul Barnhurst:
Sure, yeah. There’s not a lot of finance people that know C-Sharp I mean there are those out there know VBA or sql, but that full programming is unique. Alright, so next question. If you meet one person in the world, dead or alive, who would you meet and why?
Matthew Herbert:
You know, the first person that pops into my mind is the savior Jesus Christ. And part of the reason that I say that is because for me, our wellbeing is made up of a lot of different components. We have our body, we have our mind, our spirit, our work, our family, and our relationships. And I’ve had challenges along that entire spectrum and had a pretty serious health condition that I had to manage through and kind of hit some really deep low points in my life. And having that anchor in a belief in religion and God and Jesus Christ is something that helped to pull me out of those depths and build that strength and character and, and revive that hope within me. So for me, that’s really important just because it helped kind of drag me out of that difficult period in my life.
Paul Barnhurst:
Thanks. Appreciate that and makes sense. We all have to have those anchors in life and those people we look up to and our beliefs. So can totally understand that. One next one, next one here for you. What is the last thing you Googled looked up on YouTube or even used chat GP T for now that’s related to finance FP&A or Excel?
Matthew Herbert:
Ooh, this is a good one. I think most recently things have been more akin to the programming side. Like I mentioned early in my career I cut my teeth on really trying to learn the tools of the trade and spent back in the day. For those who will remember a lot of time in Google forums, those don’t exist anymore. Because mediums have shifted a lot. But more recently it’s been around how do I go and get this particular piece of information? What’s the tool that will actually help me? Oftentimes that’s not native to Excel, I’m cracking open the VBA to do that. And it may be something related to get post request or accessing an API to extract the right kind of information and get that tool because you’re kind of living in the edge case where Excel wasn’t really built to do that in natively. And you need those extra tools inside the VBA environment to get it done.
Paul Barnhurst:
Sure. Makes sense. I can tell we have a data nerd here, so that’s good. Yeah,
Matthew Herbert:
Exactly. <Laugh>
Paul Barnhurst:
<Laugh>. So what is your favorite Excel function feature? What’s your favorite thing about Excel?
Matthew Herbert:
Oh, I I would say this is twofold. One is I think Excel as an application is fantastic because it’s feature is customization and authenticity. It really is like a canvas to use an analogy of a painter where you can do whatever it’s that you wanna do. And I think that’s one of the things that makes it so powerful. So specifically to the feature set, I think it’s the product itself and what it offers to the end user. It doesn’t matter what area you’re in, the discipline, what skills you bring to the table. It’ll let you do whatever it’s that you wanna do. And then I think I would have to answer specifically on the function side. I have a really soft spot in my heart for offset.
Paul Barnhurst:
Offset. I, we don’t get that one very often. I was as, as soon as people say soft spot in their heart, it’s almost always VLOOKUP because that’s the one that they first realized, oh wow, I can do a bunch of stuff really fast versus manual. Yeah, I think, but offset’s another great one.
Matthew Herbert:
Yeah, I think for me the some learning what Sum Product could do when it was before SUM-Id came along was a real aha moment. And that’s another soft spot piece for me. But yeah, those, those would be the ones.
Paul Barnhurst:
Got it. So we got a sum product and an offset both great, great functions. So that kind of concludes our section there, getting to know you a little bit, but we’ll continue here through the interview. That was our rapid fire section. So the next question I have for you, you’ve worked for a lot of large global brands, right? Walmart, Lego, you know, Chewy’s a big brand. What is your takeaway from working for such well established brands? Kind of what maybe some things you’ve learned or a takeaway from that?
Matthew Herbert:
Yeah. If you look at Lego as an example, they’ve been around for over 90 years. Mm-Hmm. <affirmative>, Walmart, Walmart’s been around for over 60 years. Chewy’s still a relatively young company. It recently turned 11, but it’s grown very fast in the online space and it’s a Fortune 500 company now. And especially if you look at the storied histories around Lego and Walmart as an example. And what I’m about to say, I think also holds a little bit true to Chewy is culture really makes a big difference. And then the brand supplements. You know, people come and go all the time. Economies ebb and flow and change is consistent. But those companies have persisted through all of that, which really speaks to its ability to live its culture through its behaviors and for its brand to transcend through all of that. And so for me at least taking a step backward, it’s, there’s something material here about that culture and living those values that help to establish that relationship with the customer so that the brand can continue through time regardless of what happens. And so for me, I think that’s one of the biggest takeaways in stepping back is what are those core values and how do you create a dynamic and an environment where people can live those and your brand will continue to thrive as a result of that.
Paul Barnhurst:
I really like that and I think that’s well said. You know, having worked for American Express, I can talk to that strong culture and how that culture helped establish a brand that everybody knows, right? Yeah. Like everybody knows who Walmart is, pretty much everybody knows Lego. Yeah. And so totally understand what you’re saying there. And I think that culture is huge. It helps you build that brand and keep that brand consistent in making sure the core values are aligned with what your brand represents.
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You and I had the opportunity to send a number of emails in the chat a little bit.
We’ve had quite a bit of discussion before the podcast here, you know, and during our back and forth, one thing that became clear is just some of the challenges you’ve dealt with throughout your career. Right? We all deal with them, but some I think are real challenges. You’d mentioned, you know, being laid off couple weeks before Christmas a challenge with not getting promoted when you’re told, hey, you’re 99% of the way there. You know, some of the ones, we all have bad bosses, but maybe can you share one or two challenges you’ve faced during your career and how they’ve made you stronger, how they’ve helped put you in a better spot in your career?
Matthew Herbert:
Yeah. some of the ones that come to mind, obviously as you mentioned, getting laid off was difficult. I was a very young in my career a first time father and obviously being before the holiday season, it’s never fun to get a pink slip right before Christmas. It’s like, here’s your present <laugh>. And you really have to dig deep inside and try to separate the action from the situation. And what I mean by that is, the company that laid me off was because they were going through a difficult period. It was hard. They were, revenue was not gonna be generated in the near future like it was in the past. And that meant that there wasn’t gonna be a physical way for them to pay everybody. They just couldn’t keep people on the payroll that way. And to kind of look in the mirror and say, okay, it wasn’t because of me.
Like my actions are not the thing that caused this. Now that doesn’t mean that it wasn’t hard ’cause I went through an unemployed phase that was almost a full year because it was difficult to then find work again and get re-engaged into that. But at the end it was, it’s not because of who I am or what it is that I did, it’s because the circumstance that I was in. That’s one that helped me in terms of step back and look at the, the full picture and try to understand the story. Sometimes my wife says every pancake has two sides, so don’t always evaluate things from just one perspective. And then I think on the other side, as you had mentioned, yeah, you, you’re always gonna encounter difficult losses and you have a choice there. You can figure out how to adapt and learn through the situation.
Or you can try to figure out, in my opinion, how to pivot from that. And in that certain scenario was okay, I could either say something in this situation or react in a way that’s gonna cause them to think differently about me. Maybe they, maybe they’ll question my judgment because I want to respond very quickly with retort ’cause I don’t agree with what it is that they say. Or instead I can ingest that, internalize it and take a different tactic to try to rectify the situation and take control of my own destiny. And in that case, that’s the, that’s what I end up doing there. There is another piece that kind of comes to mind in, in the context of this, and it’s definitely taught me how to be a better leader as I’ve managed teams over time. And that is the, in the past I’ve had two bosses who have kind of undermined my trust.
There are situations where it’s, I need what I tell you to stay within these four walls because I need to express some emotion. I need to be confidential in what it is that I’m speaking. And those individuals ended up betraying that trust and telling someone else about it. And I found out because I found out through the other individual and that really also required me to sit back and say, okay, if I’ve learned anything out of this, it’s to not repeat that. So Matt, don’t be that person who becomes disloyal or is not trustworthy because you repeat the action of what someone else did. And so, as I think across my career and dealing with some of those major milestones in terms of challenges for me it’s been to try to take a step backwards and self-reflect and look at the situation and try to make the most out of it as opposed to potentially make it worse by reacting in the moment.
Paul Barnhurst:
Sure. Yeah. Whenever we’re reactive, we generally make a situation worse versus taking some time to step back and think about it. So I appreciate that. I also, like you said, you know, learning from bosses of how you don’t wanna be often, you know, we learn more of what we don’t wanna do than necessarily what we should do from bosses. Yeah. Sometimes we do learn the should. And the second thing, I think, you know, not having a job for a period and trying to find one. I think many of us have been there. I know I’ve been there. I had about a a year period and a six month period where I was looking for work. And I like to share that with people because people have this idea now that, you know, I, I appear on the, you know, on social media that everything’s going perfect ’cause I got a business and I got a podcast and all that.
It’s like, no, that’s not how life works. And it’s not how it’s gone for me. ’cause I have people all the time thinking I can just find ’em a job and it’s like, I’ve been there. Yeah. You gotta do the work. Yeah. Like I don’t have some magic silver bullet where I can go Yep. Here’s your job. Yeah. You know, if we did, it’d be nice, but just not how it works. So I can definitely relate to some of the things you’re saying there. So, so shifting gears here a little bit, I wanna turn to Chewy where you’re at today. So you currently work at Chewy. What attracted you to Chewy? What you know Yeah. Make you excited about working there?
Matthew Herbert:
As I’ve looked at my career over time I started to realize that I’d have a lot of strength, not only on the investment banking side, the retailer side, even the consumer product side, but I hadn’t had much exposure to the digital environment or the e-commerce environment. Sure. So when I made the decision that I need to move forward from a career perspective and leave Lego, I was deliberate about wanting to either engage in an area that was technology heavy focused heavily in technology like say a Microsoft as an example, or somebody that plays in that space, like an online retailer. And so I had really narrowed my search because I felt like that’s where I need to build my skills. Second I knew that I had a lot to bring to the table in that regard. As I mentioned before, very data heavy, very analyst analysis focused. Being able to get and extract data from sql, being able to advise on data structure and architecture and the technology components of things. And that’s something that Chewy was really interested in what as well. So I felt like it was a good fit between the two for me wanting to learn that space and build that out. ’cause I felt it was a gap in my skillset. But then also having a compelling offering to offer the company as well. Coming into the organization
Paul Barnhurst:
Always the best when it goes both ways, right? You have a compelling offering, they’re excited to have you, and it’s, there’s the industry fit, so you feel like you’re gonna learn what you want. Ideal doesn’t always work that way, but definitely ideal to have that. And sometimes really taking that job is about, okay, what broadens my experience in the way I want. Right. And so it sounds like Chewy had that with the e-commerce. So can you talk a little bit about how the FP&A is set up at Chewy? What’s, what’s it like? How’s the kind of company manage the FP&A?
Matthew Herbert:
There are a couple different pockets of finance and we have what I’ll call traditional corporate finance. You know, they’re helping to take information from the forecasts and roll that up for the C-suite and write commentary for boards of director and create those presentations. That’s one side. The side that I sit in is what we call commercial finance where we’re actually partnering with the business. Yep. So I run a team that’s responsible for the hard goods and specialty business units. And our responsibility is to partner with the VP who runs that category and make sure that they are getting the support that they need to make good decisions. They’re getting the financial support so that they understand their numbers and their targets and how they’re tracking to it, understanding the drivers and where they’re meeting or missing and any corrective actions that can take place. So at least the side of finance that I sit on that’s kind of the structure and how Chewy operates within that. And then, like I mentioned, there are other groups, like we have full finance support for transportation and full finance support for customer service. So there are other finance pockets within that. But what I would term as the fp and a, as you had said, I sit on the commercial side as I’ve described it.
Paul Barnhurst:
Got it. So you’re out supporting the business commercial and Yeah. What you do, a lot of that rolls up to corporate. So there’s the corporate that’s, and so it’s, it’s a pretty traditional company model and that there’s, that the corporate FP&A, there’s business unit support out there, whether you’re in commercial or the transportation, I think as you mentioned or whatever different group it is. And you each have probably some kind of matrix or you report into a finance person, but you also support a business leader.
Matthew Herbert:
Yeah, that’s correct.
Paul Barnhurst:
Yeah. No, that’s, that’s how it’s worked most of my career and I’ve been like you in the business unit, whether it’s the commercial or supporting, you know, different businesses versus being on the, the corporate side. So I think that’s pretty, pretty common for a, a larger company. Yeah. When you get into small companies, you kinda do a little bit of everything, right? You’re
Matthew Herbert:
Yeah, exactly. <Laugh>.
Paul Barnhurst:
And so I’ve seen that a a little bit as well as I worked with a smaller company where it was all kind of combined together.
Matthew Herbert:
Yeah. But, and I, I’ve enjoyed being on that side of finance and I’ve seen myself in that part of finance for basically my entire career because that gives you an opportunity to see the entirety of the business. Mm-Hmm. <affirmative>, you’re responsible for the P&L from the top to the bottom. And that doesn’t, that means that you have to be able to act as an advisor and a thought partner to your business leaders and talk about things like fulfillment and outbound shipping and inbound shipping and whatever else may go into that formula of how the P&L is shaped up from, from the perspective of your business partner.
Paul Barnhurst:
Fully agree with you. And yeah, I, I prefer being on that side as well. And I think, you know, it’s even more more crucial when you’re supporting the business that you really understand the business you’re in. A if you’re in a corporate role where you’re just rolling things up, especially if you have a big conglomerate business, you don’t get to know the business intimately. Yeah. It’s a different role. It’s not as important ’cause you’re not supporting a specific business leader. You’re looking at the business holistically. Mm-Hmm. <affirmative>. So I’m, I’m totally with you on that. Yeah. So, you know, kind of speaking to that, what are some of the main drivers KPIs that you look at at you? Yeah. What are some of those?
Matthew Herbert:
I think this one I’m gonna couch in the context of the kind of perspective of the situation.
Paul Barnhurst:
Sure. You
Matthew Herbert:
Can probably come up with an nth number of drivers to a business, right? Yep. You could really get granular and deep, but not all of those drivers have a material influence on the outputs themselves. So with that kind of in the, in as the scene setting if you will, we look at what really is gonna move the needle on the business. So let’s just as an easy example, take sales. Sales are gonna be a function of customers. What do customers do? They build baskets. What do they put in their baskets? They put units in their baskets. Do they, what’s the frequency of their ordering look like? So when you consider just a single line item like sales, it’s really a function of customers. How many orders they make per year, how many units they’re gonna put in that basket, and what’s the selling price of those units.
And that ultimately is the makeup of what sales is gonna be. Mm-Hmm. And then as you think about the rest of the P&L, you take a similar approach on what are the main drivers within here, those levers that really have a material push on those outputs and make sure that the focus is on the 80 20, if you will, so that you get those core drivers right. As opposed to kind of spinning your wheels on, getting super deep on, well what about this customer and that demographic cut this cross section and maybe we can consider that behavior versus this one. And sometimes you get stuck in that paralysis by analysis and oftentimes, you know, simple statistical principles, the deeper you go in granularity, the more you lose in accuracy.
Paul Barnhurst:
You kind of, you end up down that rabbit hole if you go too far. There’s times when it makes sense to, to dig in, but there’s some value in what are the key things in just focusing on those? Yeah. Like you mentioned, when it comes to revenue, you have customers, you have orders. Yeah. You have a price to those orders, you have a mix to those orders and that you roll that all up. At the end of the day, it doesn’t matter what business you have, that’s basically how revenue works, whether they’re repeat or one time or there’s all kinds of different pieces within that. But if you can break it down and think about it that way and say, okay, if I, I can increase the customers, I can increase the order size, I can increase the price per prop, per unit in the order, you know, whatever. Right. Those three or four different ways, then it’s a question of which one do we drive and how That’s right. Or combination of ones usually. Yeah.
Matthew Herbert:
And I think from there you can start to determine the second order of magnitude. Like, great, I want a customer to come back again. Now you get into these discussions around marketing, what’s the right offer to put in front of them to get them to reengage with your business and make that subsequent order. And from there, you know, kind of going down that path of, again, what’s the second order of magnitude but not trying to boil the ocean all at once, if you will. Because as you know, as you, as you shift too many dynamics at the same time, now you’ve got too many variables in the situation. You don’t know if changing one has material impact at the end of the day. So if you try to do too much at once, you in some senses, you shoot yourself in the foot because you can’t really explain if the output is a result of that input.
Paul Barnhurst:
Yeah. If you’re doing a bunch of things at once, you’re not really doing an experiment. Yeah. In the sense of, with an experiment, you have a hypothesis, you’re able to do some level of measurement and determine the impact. And if you’re doing 10 different things at once, it’s too hard to determine it unless they really are discreet, which, come on, what business can you do 10 things at once? Yeah. Especially if you’re all trying to impact revenue that are discreet. Good luck.
Matthew Herbert:
Yeah, exactly.
Paul Barnhurst:
So I agree with you, there’s real value in making sure you understand the impact of turning the different dials and you do ’em in such a way so you can analyze it Yeah. And make sure it’s having the right impact you want on the business. So, you know, your experience at Chewy, how has FP&A helped Chewy? How does it contribute to, you know, the overall mission and growth of the business?
Matthew Herbert:
Yeah, so Chewy is definitely a growth company. I think like many companies, especially through the Covid era, you had hyper growth, especially in the online space. And so understanding the numbers and the shape of the P&Ls. You know, should we open a new fulfillment center? Where should we put that? Are we close to our customers, not close to our customers? How is our inventory placed? Where is it placed? And do we have the right kind of coverage so that we can meet the shifting demands of our consumers? And those are all areas where finance comes into play, making those decisions in isolation or with you know, a narrowed perspective gets you into trouble. And so finance is there to be able to say, here’s an opportunity. Let’s analyze that opportunity in the context of the totality of the business and help leadership by empowering them with the information to make the decision.
You know, early on in my career, I always felt like when I make a recommendation, if the leadership doesn’t say yes, I failed. And I shifted that over time because I realized there are a lot of reasons why you might not make a decision. It could be timing or it could be cash reasons, or it just might not be the right decision for the organization at that point in time. And my thinking shifted to this perspective of, but did I give enough information to allow the leaders to be able to make the decision? Another way to look at that is did they come back with any critical core follow-up questions? And the answer to that is no. To me, that is massive success. That is value that the finance department is bringing to the organization because again, the leadership team’s empowered with that information to be able to make the right decision.
Paul Barnhurst:
Agree with you. I think we’ve all been through that. We’re like, wait, but they didn’t accept my recommendation. Yeah. And you feel like, well, what did I do wrong? And sometimes it is something we did, maybe we didn’t explain it well enough, we didn’t influence. But often the business for various reasons has chosen a different path. And, you know, we have to accept that to a, obviously to a certain degree. And if we disagree enough, then we can always go find another job. Right. <laugh>. Exactly. That’s the way it works, is sometimes we’ll just fundamentally disagree with leadership. Yeah. And maybe it’s not a good fit.
Matthew Herbert:
And that, just to play on the tenet within Chewy, chewy has an operating principle of debate openly and commit fully. And those are moments where you, you may have the debate and you may disagree, but you move forward. It’s like, we’re just gonna accept that we might not see eye to eye on this, but our mission is still to move the organization in the right direction and keep business running and flowing so that we can keep growing.
Paul Barnhurst:
And I, I love that of, you know, debate openly and then commit fully. Kind of along those lines, you know, something I’ve always liked is saying, I heard one time it’s really stuck with me, is that you want people that have strong opinions loosely held. Yeah. Which means they’re gonna share, they have a strong view on things and they’re willing to have that debate. But as soon as they recognize new information that changes that view, they’re willing to accept and go with the data, you know, and being data-driven. I really like that. ’cause Sometimes, we’ll hold on. I think we’ve all done it to a point of view, even though the data’s telling us we’re wrong. Yeah,
Matthew Herbert:
Exactly. <Laugh>. Just because
Paul Barnhurst:
We’re being stubborn, it’s like, well, I wanna be. Right. It’s
Matthew Herbert:
Like ego gets in front of us
Paul Barnhurst:
<Laugh>. Yeah. I mean I’ve definitely been guilty of it. I had one where, you know, my, my wife had told me something and it was her area of expertise and at first I’m like, that can’t be right. She sent me the research article, it took me a couple weeks to come along. Now I’m a big advocate of what she says and I tell other people that, and they’re always like, oh, that can’t be right. I’m like, here’s the research. Yeah. Like the data’s there.
Matthew Herbert:
And I think that that, you know, you touch on an important part, which is, at least for me, what resonates really well is database approaches. Now not everything is perfect. You’re not always gonna have the information you’d love to have to make a decision, but data always helps to tell the story and put things into perspective. And while you were explaining that, it made me think, just even in my own personal experience, is so important within your career to walk into roles and opportunities with your eyes wide open. People think differently, they behave differently. You know, these are big learnings having lived all the way halfway across the world in another country and seeing that, oh, they don’t do it the same way that I’m used to seeing them do it, or they don’t operate in that manner. And it’s having that open mind to allow for that perspective to seep into you. And for at least me, part of the learning to step back and act more as an observer and a listener to help formulate an opinion, grab the data, grab those perspectives, shape that together, and then come forward with a perspective and kind of your thought process on what it is that you want to argue. So I like that comment that you made ’cause it spurned a lot of thoughts in me and the experiences that I’ve had in the past and ones that I’m still having today. I,
Paul Barnhurst:
I appreciate you sharing that. And that’s a huge part of it. You know, beyond just the data is understanding perspectives, understanding cultures, understanding people. Right. It goes so much beyond just the data. You wanna make data-driven decisions, but a big part of it is how you present it. Yeah. How you influence and understand people. And I used to think, well, it’s a good idea and I’m sure it’s right. So people will just follow me. <Laugh>, it’s not Yeah, exactly. You’re, that’s the response I should have got. You’re laughing like only it worked that way. Yes. I was naive. What can I say?
Matthew Herbert:
And, and especially in that situation, when you’re presenting the information, knowing your audience is one of the most important steps in shaping the storyline. You know, if you can’t speak in a way that resonates with the audience, then you’re gonna have a lot of work that ends up being wasted. So oftentimes it is that you’ve gotta kind of put yourself in their shoes and say, okay, how are they, how are they thinking? How are they expecting to consume the information? What are kind of the challenges that they might put forward so that you can be prepared in that situation as opposed to, like you had said, I’m just gonna tell ’em the way that I think it is and they’re gonna accept it
Paul Barnhurst:
<Laugh>. Yeah. If only it worked that way. So, you know, one other question here about Chewy and then, you know, we’ll move past this, but Chewy is well known for its customer service, right. Has a very strong brand name. A lot of people who don’t even have pets have heard of Chewy. So one thing in particular, it’s known for its customer care. Yeah. So there’s stories out there providing customer flowers when petdies, full refunds mm-hmm. <Affirmative>, you know, those type of things. So how is that type of customer success built into the financial planning? How do you guys think about that?
Matthew Herbert:
Yeah, so this is a big part of how Chewy assesses the business. And obviously I can’t sp speak specifically about numbers, but just to say that it’s its own dedicated department. We have a customer service team. It has a leader, it has its own finance arm and it has the backing and support of technology and other resources to make it successful. Because we really believe that we’re here to provide a delightful experience for our customers. Pets are part of the family and we want our customers to know that we view them that way and we want them to feel like they are the family of Chewy. And as a result, that’s why customer service has been put forward is probably, in my opinion, the strongest moat within the organization. And doing things that really delight the customer because we know how important it is to take care of our family and pets included.
Paul Barnhurst:
And I, I like that and I appreciate that answer. And how, leads me to a follow-up question. So do you have a pet?
Matthew Herbert:
Currently no. We, no, we have been pet owners in the past, but at this very moment we, we currently don’t have one
Paul Barnhurst:
J just curious, when you mentioned, you know, pets are family? My I will say my daughter for a long time was trying to convince us she’s kind of got past that phase and I’m hoping it stays that way ’cause my wife and I really don’t want a pet right now. So.
Matthew Herbert:
Well, it’s a very pet friendly organization. So when I’m in the office, there are plenty of dogs that you can interact with and get your pet fill if that’s something that you enjoy. So consider Chewy <laugh>.
Paul Barnhurst:
Yeah, I know, I know people have worked at other, you know, like the petmarts, the pet coats or whatever you see the pets and bringing out, I know people have worked at bringing pets to work, so that’s good. Yep. You would expect that with Chewy and I’m glad to hear they have that in the culture. Yeah. So you’ve spent basically your career in finance, you know, the majority of your career. So what made you decide to work in finance and what has kept you in finance all these years?
Matthew Herbert:
I think at the core I’m somebody who likes to tinker and somebody who’s curious. So I like to do a lot of different things. I also find that if I do the same thing too frequently for too long of a period of time, I get a little bit antsy. Sure. And for me, finance is an area where you get to play in a lot of different spaces. Like I mentioned earlier, you know, being a good finance partner is somebody who’s understanding the P&L top to bottom. And each one of those expense lines or revenue lines touches a different department, completely different organization. That means you’re going out, you’re learning about processes, you’re learning about flows, whether it’s customer flows or workflows, and you’re bringing that education together into a full line perspective. And because you have that knowledge, you become an expert.
And the organization values that because there aren’t very many people within an organization that can step back and say, oh, I can tell you everything there is to know about the customer flow, I can tell you everything there is to know about transportation. You know, there are specific departments for that. You know, customer service is deep on customer service and the revenue officer is deep on revenue and so on and so forth. But at least within finance I felt like, oh, I’m in a position to be a part of all of it. Mm-Hmm. <affirmative> at the same time. And that information, that curiosity gets fulfilled on my side. So there’s a high level of engagement personally, but then also it’s fulfilling because you get looked at as a strategic advisor, you get questions like, what is that gonna do if we decide to make that decision?
Oh, I’ll tell you because these are all the areas it’s gonna influence and here’s the financial impact that it’s gonna have on the P&L. So for me, that’s been the most fulfilling and most rewarding part. And that’s honestly what keeps me in finance because I’ve always kind of been afraid. I’ve had people who’ve approached me many times and said, why don’t you come over here and work in this department? And I think, Ooh, am I gonna get siloed if I go over there? Am I just gonna do that one thing and learn that one task? Not that I won’t gain a learning out of it, but I’ve always stepped back and said, yeah, but am I gonna have the same sense of ownership in that role as I do where I’m at right now? And I’ve always felt like finance has been such a great spot to have full ownership of the totality of the company, not just a specific area.
Paul Barnhurst:
Yeah. I couldn’t agree with you more that you get to see the whole business. You know, one of the charts that I put in my training when we do our FP&A course is, you know, basically showing that fp and a is one of the only places that has a 360 view of the business. Yeah. You get to see all those different departments. The other is the CEO and CFO. Yep. That’s really it. And so you’re in a very unique position to be that advisor and influence the business. Yeah. That’s why I always like to say it’s so critical that you learn the business. Yeah. You see some people in finance that just focus on the numbers or just to spreadsheet and really, if you wanna impact the business, you need to know the business. It’s not enough to know the financials or know the spreadsheet well. So I Yeah,
Matthew Herbert:
Exactly. And I
Paul Barnhurst:
Think that’s well said.
Matthew Herbert:
And the other piece that you bring up that I just want to call out there is I feel like finance is uniquely positioned to communicate with the leadership teams. And so in my experiences I’ve looked back and been like, oh, how, who are the people that get to interact with the leaders? Again, another very curious area for me, like, oh, I think I might wanna run a business someday, or I might wanna be a leader. I need to be able to observe that and be a part of it. And finance in my experience, has always been kind of the right hand man at the table. And so even today I’m in meetings with the CFO, I’m in meetings with the C E O, I’m in meetings with high level leadership people who are multiple levels away from where I am today. Yep. Because again, you have that, like you had described that 360 view and you have enough insight and knowledge to again, be an advisor to those leaders and helping to shape and direct the company.
Paul Barnhurst:
Yeah, definitely. We get to be that right hand person for the senior leadership and it’s a great, great thing to do. So this next question I wanna ask you is, you had mentioned you’re a self-taught programmer. Yeah. You know, not, not something you see a lot of in financial, see some here and there, but how has that helped you in your career?
Matthew Herbert:
Yeah, for me it’s helped tremendously. I’ve got a fun little story <laugh> behind this. I think lots of people gain a lot of inspiration by being able to watch others. And I think I dovetailed into programming with VBA because the first internship I ever had I, I worked for a smaller company and much like you and I are viewing each other today, my boss sat directly behind me and he was able to look over my shoulder and see my monitor. And so I would have excel open and he’d hear the mouse click and he’d go, Herbert, get off the mouse. And I remember freezing in that moment and really didn’t know what to do. Like I didn’t even know that it was feasible that you could control Excel without the mouse <laugh>. And so I still remember being frozen for like 45 minutes ’cause I didn’t wanna touch my mouse.
I literally didn’t know what to do. And over time he started to mentor and teach me and kind of open this possibility of what it, what can you really do with Excel? And I’m an Excel junkie and I’m mouseless with the exception of one situation, which we can talk about later, <laugh>. Because it’s enabled so much productivity, I’d rather spend my time thinking and less time doing. And so if I can run a sequence, run those sequences together without having to click on the mouse and waste that time, then I will. And that started to open that door and I went to my second internship and I thought, okay, I wanna expand Excel. Like I know the potential that’s here, but what else is there? And I picked up this book from the library about VBA, I was reading it during lunchtime and one of my coworkers came across and said, oh, you’re reading V B A, you need to come over here and talk to this guy.
And here’s an individual who had to audit a bill that was a ream of paper is in the railroad industry. And that was his whole job for one week. He’s got a audit, this ream of paper. And he had scanned this at the time, this was back in 2004 or five, into a piece of software that would read it into a spreadsheet. And it wasn’t perfectly clean, but he had generated these macros to clean the data, run the audit, and then print out an exception report that would basically say of the a hundred thousand you build us, we’re gonna remit 97,000 and the 3000 of exceptions this year. And that all happened in the fraction of like half a morning on a Monday. And he said, well, my work for the week is done. And I, my mind was just blown. I was like, this guy literally automated the entirety of his job in one morning.
And I thought, I have got to learn this. And for me it was, and I think a lot of learning comes where you have to step back and say, how do I apply this to something that’s meaningful to me? It’s different when somebody asks you to do something versus how you try to figure out how to take that piece of knowledge and apply it to something that’s meaningful. And so over time I did that and it naturally just progressed to the point where I was programming all sorts of stuff and I you know, I could continue on and on with other stories. But this has helped improve processes immensely and doing things like extracting data off of websites through get post requests or automating processes because people don’t know how to do it differently. And it’s created tons and tons of time savings on my side and for my teams as I train them through these so that again, we’re spending less time doing and more time thinking. And I find myself using VBA a lot because I’m pulling out those edge cases to make the computer work for me instead of me working for the computer.
Paul Barnhurst:
Appreciate that answer. And I love the, you know, taking something that takes a week and boiling it down to 30 minutes. Exactly. That’s exactly, that’s a dream for all of us. There’s definitely a lot of ways we can automate and it’s exciting to see what’s going on with technology to continue to make it easier for all of us to find ways to automate our work. You know, recently you created your own website focused on training. Can you talk just a little bit about how that came about? You know, tell, tell us the story behind that.
Matthew Herbert:
Yeah. I’ve always been passionate about teaching and I feel like so many people have spent the time to mentor me and help me through that process that it’s something that I wanna do for others. And so I find naturally that I enjoy being in that environment. I’ve done a lot of training through the years, through the different organizations that I’ve been at. ’cause I’ve been looked at as a tech expert and within finance, you know, Matt, how can you help us do the Excel better? Or how can you help us build the model, you know, the features and the functions or you were able to extract that information using SQL, how do you do that? Or how’d you write the VBA to process, automate this component? And as I’ve gone through that, I’ve realized some common themes as I’ve helped to instruct others and mentor them.
And I felt like, oh, there’s an opportunity here to help the general population elevate in that regard. And really, I think there’s so much of the tools that are out there that are untapped. You know, having this propensity to learn and try to figure out how to use the tool to meet your need is one of the greatest unlocks. And so rather than just learning a function part of the way, learn it all the way. I know you went back earlier on the function one and you said V lookup, you know, I’ve worked with a lot of people who say, oh yeah, V lookup false. I was like, yes, but are you using vlookup True? And they’ll usually give me this blank stare like, wait, what ? And it’s like, no, learn, like, be curious enough to learn the totality of that.
And I feel, feel like from my position that I’ve spent the time to figure out how to connect the dots from all the way from A to Z. And that’s why I wanted to create it is to then teach it that way. Build a really solid, secure foundation so that you can continue to bolt on these components over time and really build a well-rounded toolbox that’s gonna make it so that you can pull whatever data you want in whatever format you want. You can throw a model on top of it and do an analysis. You can construct the PowerPoint and present it in front of a group. And if you need to process, automate it, you can. And so I know how to do all of those different components and bring them together as a skillset. And I think that especially within finance, people have an opportunity to round out that skillset and learn those components to truly be empowered to elevate their game and be successful in a way that the organization will reward them, where they’ll get personal reward then out of it. And it’ll be something that’s a net benefit in both situations.
Paul Barnhurst:
Got it. Well, thank you for sharing that. And we’ll put the website in the show notes. So anyone who wants to check that out can, so next question here is, can you tell me about a time in your career when you experienced what we’ll call a strategic moment, right? Some kind of insight, strategic insight you gained that helped drive change within the organization, empowered you to, you know, make some changes in the organization?
Matthew Herbert:
So I’ll share an example from one of the prior companies that I was at and when I first started, there was definitely a lack of transparency on some pockets of the business. This particular business had a number of different customers and there were different ways that we were providing funding. So as you know, lots of customers have trade terms and so there might be shipping allowances, there might be credit allowance, payment discounts, so on and so forth. Then you’ve got marketing activities, like, we’re gonna run a promotion or we’re gonna run an advertisement, or we’re gonna do specific placement in a store, whatever it may be. And so just the simple question of where are we spending our money? Like, can I look at customer A and actually be able to build up, here’s all the investment that we’re making with that customer, and B, in customer C and so on and so forth.
And the organization didn’t have it. Directionally, they knew what marketing was spending and they knew what the trade terms were because that’s how the billing’s set up. But there was no holistic approach to spend per customer. And bringing that spend together actually created a lot of debate and discussion. We were learning, oh, our spend with our customers isn’t necessarily aligned with the growth strategy that we have with those customers. Sales was learning, marketing’s actually driving activities that don’t align with the discussions we’ve been having with our customers. And that was really an aha moment of here’s an instance where I was able to bring data together, put the transparency forward to tell the story, and get the organization to rally behind that and reconsider how it invests with specific customers. And that really was a strategic moment that helped to transform how we approach the budget process. There were other things that kind of came out of those work streams that were beneficial to the organization, but ultimately it made us smarter in how we think about strategically spending the funds of the organization to grow.
Paul Barnhurst:
Great example. And I really like what you said at the end is strategically spending the funds to grow. Yeah. Because it really is about strategically spending those funds to maximize the return, whether that’s growth, whatever that may be. You know, obviously growth is typically a big part of that. So I really like that answer. So we’re pretty much out of time here. We’re at the very end. So we’re just gonna go ahead and up with two last questions. First one is, if I asked you to provide advice to someone starting a career in FP&A today, what’s the one piece of advice you’d offer them?
Matthew Herbert:
Oh, I only get one. <Laugh>.
Paul Barnhurst:
You, you could have two if you want. We’ll give you two. How’s that?
Matthew Herbert:
Okay. I think that for me, if I had to rank the two they would be to be curious and to not be afraid to invest in yourself. So I’ll start with the curiosity component. You know, having curiosity uncovers so much. That propensity to learn and to kind of gather information, observe what that information is telling you is vastly beneficial. It helps to make you smarter. It helps you to learn the business better. It helps you to partner a lot of the things we’ve discussed. And at the same time as you’re being curious, it involves asking questions. So don’t be afraid to ask questions. It also means being vulnerable to say, when you don’t have an answer to a question, if somebody expects you to and saying, I don’t have that, or, and, or I know how to get it. Or, these are the things that I’ve done and this is where I need you to help me to move things forward.
So I think being curious is, is critical. And then again, the second piece on not not being afraid to invest in yourself. Oftentimes as I work with individuals, they’ll say, oh, well where do I get the time to do this? Or How do I do this? You know, for me, if I didn’t know how to do it, yes, I need to brute force I’m tripping over my words. <Laugh>. I need to brute force it and get to the result. But then I would always go back and say, there has to be a way to do this better and figure it out. Like, don’t let that hurdle or that obstacle get in your way and take the time to invest in yourself to push through that wall. Because once you learn it, now it’s part of your toolkit. You’re ready to use it next time.
And that becomes kind of that infectious cycle where it’s this flywheel that keeps spinning. You invest, you go back, you struggle, you get through the obstacle, then you invest in yourself again and so on and so forth. And over time, through these incremental small steps, you’ll look in the rear view mirror and be like, holy, because I’ve had a ton of progress mm-hmm. <Affirmative> over my career or these, these few roles that I’ve had. So that’s why I think being curious and not being afraid to invest in yourself or would be my top two.
Paul Barnhurst:
Thank you. Appreciate that. That’s a great list. Last question, if someone wants to get ahold of you, what’s the best way for them to do that?
Matthew Herbert:
I think the two best ways are, obviously you can go through the, the website again, https://biztrix.us/ or find me on LinkedIn. Those are probably the two best ways to, to get at me.
Paul Barnhurst:
Makes sense. Those are pretty common ones. Well, you know, I really appreciate your time today, Matt. Thanks for joining us on the show. It’s been a real pleasure chatting with you and I know our audience will enjoy this conversation as much as I did. So thanks again for being on the show.
Matthew Herbert:
Awesome, Paul. Thanks for having me. Appreciate it. Really enjoyed it.
