People

Dan Mayleben, Adaytum

What's it like going from the finance department at a huge multinational to the finance department at a more modest-sized company? Mayleben knows.
Lisa YoonDecember 7, 2001

Dan Mayleben, CFO at privately held Adaytum, has worked his way up the finance ladder. After graduating from Creighton University with an accounting degree, Mayleben went to work in the audit practice at Deloitte & Touche. Eventually, after 10 years at D&T, Mayleben moved on to Merrill Lynch Business Financial Services, where he served as a financial manager in the company’s investment banking practice. Soon after, he jumped to the corporate sector, signing on with the finance department at Honeywell International. He worked at Honeywell for six years, eventually winding up as CFO of the company’s security and fire solutions business, a $1.8 billion operation. In that capacity, he oversaw the financial due diligence — and subsequent integration — of a major acquisition.

In September 2000, Mayleben was hired as CFO at Adaytum, a Minneapolis-based maker of business planning software. Adaytum, which was founded in 1990 by a former New Zealand army officer, has proved to be a fast grower, particularly in recent years. Revenues at the privately held company jumped from $3.5 million in 1996 to nearly $38 million in 2000. Mayleben oversees investor relations, strategic planning, and acquisitions. He recently spoke with CFO.com’s Lisa Yoon about making the jump from a large company to a small one, managing exponential growth, and relearning the value of cash.

Before Adaytum, you worked at Honeywell, a publicly traded, global conglomerate. Did you learn any lessons there that actually proved useful when you switched to a small, privately held technology company?

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Yes. Little companies become big companies because they develop meaningful business processes.

But because they move so fast, little companies have a tendency not to focus on business processes. Big companies instill in you the notion that, for things to get done correctly on a regular basis, you have to have a certain discipline. So you pick up best practices and benchmarking. When I first got here I laid out for our management, “Here’s how we’re performing, and here’s how best-in-class is performing.”

Another lesson was to focus on a few things and do them well, instead of trying to do a whole bunch of things. Small companies tend to chase a whole bunch of initiatives all at the same time.

So what changes did you make when you started at Adaytum?

When I first got here, we were on a two-week close cycle. That’s too long. At Honeywell, we had a two-day close. Of course, I think it’s pretty normal for smaller companies to take longer closing the books. You have a smaller staff, and there’s less of a sense of urgency in getting it done. You tend to meander your way through the month, and about halfway through the month you get your numbers done. So the finance organization at Adaytum said, we have to change that.

We also said that our business is really nothing more than a collection of smaller businesses. So we took the P&Ls and distributed them to the people who were running the businesses so that they understood how their piece of the business was performing within the total business. And we made them accountable for their part of the overall P&L.

That’s something that a lot of large companies do — they break the company into manageable, bite-size pieces. And it’s still relevant at a small company, it’s just that there are fewer zeroes at the end of the figures.

So who are your benchmarks?

We looked at people like Siebel, Business Objects, Mercury Interactive, and other companies that have performed well from a capital-appreciation standpoint. We not only looked at those companies today, but we also looked at them when they were $40 [million] or $50 million in revenue [comparable with Adaytum]. We just look to well-run companies.

What about benchmarking on a more personal basis? For example, do you network much with CFOs from other companies?

There’s a group of CFOs here in Minneapolis, and we get together once a month for breakfast for about three hours. Most of them are CFOs of technology companies who are similar to Adaytum from a size and gross standpoint. It’s an excellent way to bounce ideas off people and learn. We also bring in a speaker every other month. There are about 14 of us.

Is there any competitive dynamic there?

Oh, no. It’s actually probably the most entertaining three hours of my month. It’s interesting how the situations at each of our companies are similar. We all have the same issues; we’re all working at companies that are trying to grow. Half of us are at public companies and half are private, so you get a good mix of public versus private dynamics.

But we’re all dealing with raising money, capital markets, the sales organizations, how you grow the business at a sustainable rate and not overextend the organization, all kinds of fun stuff. We also talk about things we’ve done at our companies that we would have done differently. It’s all discussed with the understanding that everything stays in the room, so people have a sense of openness about what they talk about. So it’s a very supportive situation, and you learn a lot.

What are some ideas you’ve bounced around in terms of dealing with the recession?

We’ve talked about how different organizations were dealing with the softness in the overall economy. We’re doing layoffs, we’re doing salary freezes, we’re doing decreases in compensation. And just to go around the room and hear how each company is handling it is an interesting conversation. So when you go back to your own company, you have some sense of, “Here’s how we’re doing it compared to other people here in town.”

It must be an interesting situation to be the CFO of a company that makes products that CFOs use. Do you feel any pressure since your customers are also your peers?

It is interesting, and it’s what makes the job fun. I understand our solution, I understand the business issue we’re solving in the market place. It also gives me an opportunity to work very closely with the people in the sales operation and the marketing team, to make sure that the things we say in marketing the products are relevant. Having been the CFO of a $2 billion business at Honeywell, I am the target audience of our product. So when we had our sales meeting, I taught one of the sessions, and it was on what keeps a CFO up at night and things to think about when positioning the product to a CFO of a Fortune 500 company.

Having worked at opposite ends of the spectrum in terms of market cap, what would be your advice to other finance executives, or to budding finance professionals?

I think at some point in most people’s career as a finance professional, everyone should work for a smaller company. At a smaller company you’re going to get a broader exposure to a variety of topics. At a large company, you can spend years at a time training in different aspects of the business — it could take you six or seven years to get exposed to the whole financial statement. But at a smaller company, you’re responsible for everything. So what you see in a year or two at a smaller company is much broader than what you’d see in the same time at a large company.

Working at a small company is also valuable in that you don’t get cash from corporate. So you understand the value of cash. I’ve seen a lot of people at big companies who say, “Well, if we need more cash, we’ll just call corporate.” Your ability to manage cash flow suffers because the concept of cash flow never really becomes real. You have to work for a smaller company where cash flow is everything. It makes you drive the business towards what’s really important.

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