The CFO of any business, especially at a publicly traded company striving for growth, must wear many hats. For Jim Head, CFO of MultiPlan, his role not only involves "walking the tightrope," as he says, but has recently involved technology integrations, acquisitions, a new chief executive officer and chief operating officer, and efforts to maintain a highly rated company culture.
Jim Head
Executive vice president and CFO, MultiPlan
- First CFO position: 2021
- Notable previous companies:
- Morgan Stanley
This interview has been edited for brevity and clarity.
ADAM ZAKI: Your company just hired a new CEO and COO. What’s the goal and how does this impact your role?
HEAD: I have spent a lot of time recently helping with this process we are going through to transform our business. It’s something we talk a lot about to investors. For Travis Dalton, our new CEO, I think we got the right person at the right time with the right background. My role in all of this is to be a strategic partner for Travis and help him from a financial perspective to accelerate the transformation and grow the business. We spent a lot of time together before he took on the role of discussing this topic.
We brought on Jerry Hogge as COO, and he will be super helpful in this business transformation as well. We all look at this as a partnership, where we are working together to accelerate growth.
I consistently tell investors, my job is about walking the tightrope between enhancing our margins and reinvesting back into the business. I have such an enjoyable role, and I am excited to work with Travis and Jerry to continue our pathway for growth.
You have over two decades of experience working in M&A. What are some of your thoughts on the short-term M&A market in your industry and beyond?
HEAD: I started working in M&A in 1988. That’s a lot of years. It’s funny, more often lately, I’ve had people tell me it’s going to be a banner year for M&A. When we look at our space, the healthcare services industry, it’s kind of slowed down for us in large part because of a disconnect in valuations in 2022 and 2023. So, for us, there is a bit of pent-up demand here going into 2024. We’ve seen companies like Cotiviti announce a transaction and R1 RCM’s deal play out in the public right now, and I think this is a good example of the increased activity our industry has right now.
To be a successful CFO, you have to have a really strong accounting team.
Jim Head
CFO of MultiPlan
I also think rising rates caused a bit of a freeze in activity across the board. I think valuations are now just starting to normalize, and both buyers and sellers are getting comfortable with the clearing price.
Even last year and back into 2022, there were a number of significant differences in the bid and ask, and buyers and sellers just couldn’t agree. This year, I’ve seen buyers inch up a little bit and sellers coming down in deals much more often.
Before taking this job, you had no formal accounting training. How did you get up to speed?
HEAD: I came at this job from a path that is different from the average CFO. I didn’t have any accounting training, my experience was in M&A. However my observations before my current role were that M&A was all about problem-solving, which I had done for twenty-plus years. I looked at a ton of different kinds of business models, and all sorts of issues that came up in that process involved accounting. I wasn’t a CPA, but I began to understand accounting pretty deeply through my work experience.
I’m also so lucky to have such a great team at MultiPlan. Our accounting and internal audit teams are first-tier. One thing I knew coming into this role was advice I got from everyone I knew, including CFOs I advised along the way in my career, that to be a successful CFO, you have to have a really strong accounting team.
The added good news for me is that our business is relatively straightforward when it comes to accounting and our cash flow generation.
You were at Morgan Stanley for over 20 years. What kept you there, and what positive culture or work environment indicators did you see in MultiPlan that encouraged you to take a CFO job?
HEAD: I was at Morgan Stanley for a long time. It had an amazing, high-performance, collegial culture. It was about a pursuit of excellence and getting stuff done. People cared about each other and the work they were doing. That was always very important to me. I found the same thing here at MultiPlan.
AI and machine learning have the potential to help us clear out a lot of the mundane components in decision-making processes that take up time.
Jim Head
CFO of MultiPlan
We surveyed our employees and did very well when we asked them if this was a great place to work. And I agree with them. We have lots of people who have been here for a long time and [have] a family culture. But we are also very nimble, we are confident enough to pivot and make decisions.
People here can speak their minds and enjoy each other’s company while at work. The culture here is very similar to what made me stay at Morgan Stanley for so long, and it’s been a pleasant surprise for me how many of our people are happy and excited to come along for the ride through our business transformation.
You acquired a data and advanced analytics company recently. While it’s evident that you see value in AI’s impact on the business, where do you see the value specifically in the finance function?
HEAD: It’s in the new products we are designing. We bought the company for its enhanced decision-making tools and capabilities. In our business, AI is a potential tool for decision science. And that is true in finance as well, as we are going through an ERP transition where AI may be a part of it. That will take maybe a year or so to get up and running.
From our perspective, it’s interesting when you talk about the buzz of AI, because we are not focused on the hype. We’ve got over 30 data scientists, which is pretty big for any company, including many larger ones. But what they're trying to do is enhance our products to produce actionable decision-making for our clients. AI and machine learning have the potential to help us clear out a lot of the mundane components in decision-making processes that take up time.