Colleagues and friends told Jeff Richard he was crazy to give up his career as a finance executive at big public companies to take a job with a small private firm. But Richard, though mindful of the potential scar that such a move could leave on his résumé, could not resist the appeal of a meaty turnaround situation and a likely future ascension to CEO.
That was three years ago, and things are going according to plan. Richard is both CFO and chief operating officer at Pavestone Company, a Dallas-based provider of stones for patios, retaining walls, lawn edges, and other uses, both residential and commercial. While the recession has driven revenue down about 20% from a high of $360 million in 2007, profits have continued to flourish, he says, though he declines to quantify the bottom line.
That result was achieved in large part by squeezing waste out of Pavestone, a company that previously had no strategic plan or even a formal budget, according to Richard. He credits his ability to direct the transformation to his 20 years of experience at large companies. That’s one reason why finance executives shouldn’t too-hastily dismiss similar opportunities to move down in size but up in authority. “Big-public-company experience works well in smaller companies,” Richard tells CFO.com.
Much of that experience, after he started out as an internal auditor for Pennzoil and Cooper Industries, came at Tyco International, where Richard landed a role as finance vice president for an Asia/Pacific division. He stayed at Tyco for 13 years in various jobs, including divisional and segment CFO, where he says he was far removed from the schemes that resulted in long prison sentences for one-time Tyco CEO Dennis Kozlowski and CFO Mark Schwartz. Following briefer stays with Jacuzzi Brands and Electronic Data Systems, he encountered the opportunity at Pavestone.
Pavestone’s Jeff Richard: Spreading the Wisdom.
Richard was told that he would be in line to be Pavestone’s CEO when the company’s owner, who’s now nearing 60, became ready to step back. Just as attractive was the idea of spending most of his time running the company and making a difference — formulating and executing a strategic plan, visiting plants and customers, and working on product development and acquisitions.
By contrast, at the public companies, Richard says, three-quarters of his time was spent on “being Sarbanes-Oxley compliant, answering analysts’ questions, and fighting with auditors — things that didn’t necessarily bring a lot of value to the company. What I really wanted to do was see the fruits of my labor.”
Indeed, in his due diligence before accepting the job, Richard got the clear idea that drawing from his experiences would make Pavestone more valuable. Large public companies like the ones he worked for have more and often better talent from which to learn, he notes. They also have money to spend on implementing efficiency-enhancement programs such as Six Sigma and Lean Manufacturing. And they tend to have more robust business analytics and stronger internal controls.