Ralph Thornton Feelance CFO from Dallas – Texas
Could you please, briefly introduce yourself and tell about your background?
My name is Ralph Thornton. I was born and raised in Dallas, Texas, US. I started studying chemistry in college. Flunked out of school for several reasons – was not really focused – joined the US Navy. This was the time of the war with Vietnam and you didn’t have a choice whether you’re going to serve or not. The Navy was kind enough to send me to Chinese language school, then they sent me to Taiwan, where I could use my Chinese. During the war, it was much better to be in Taiwan than in Vietnam, as you can imagine. So anyway I came back and completed my undergraduate studies in Chemistry. Then went to Stanford Graduate School of Business in Palo Alto, California, and got my Masters in Business.
So did you graduate right away after Chemistry course?
Yes. They want you to have some kind of real experience between undergraduate and graduate school. And I had mine between my 3rd and 4th year in undergraduate school, in the Navy. So I went to graduate school immediately out of undergraduate. And after that, because of the relationship I had with one of the partners at KPMG, the international accounting firm, I joined them. I was in Dallas for a year and then they sent me to Taiwan to work, to help open their new office in Taiwan, because of my language skills. So I worked for them for 3 years in Taiwan. And I decided that I want to look to the future, not to the past. Because at that point certainly a lot of the work accountants did was auditing the past, and I wanted to work on what was really happening now and in the future. So I joined Texas Instruments as a Controller in their large 3,000-employee plant in Taiwan. It’s an integrated circuits plant. And that was my start in technology companies. That’s where I learned a lot. There is a joke that TI stands for the “Training Institute”, as well as Texas Instruments. A lot of people – accountants, a lot of marketing people, engineers – they went there and got trained on how to do their job. There are many companies with Texas Instruments graduates. So that’s where I started in my corporate career. In 1978 I left Texas Instruments to join a startup company as their Chief Financial Officer, and went from there.
And by the moment you were leaving Texas Instruments – were you having enough skills in accounting and finance?
Yes, I had. During the 3 years with Texas Instruments in Taiwan I got a full course on real accounting, on how real accountants keep books. I mean, I already knew how to keep books as I have been doing that since I was 16. But how you really do accounting and control within a large company, in corporate accounting. No one could ever know all the details of corporate accounting, unless you were in a corporation for dozens of years. But I learned a lot there and even more about it when I was back in Texas as a Europe Group Controller. I learned about how the upper levels of management accounting work. So I was ready to go.
When you do a startup, typically, the first people who go in are doing work that they used to do 10 to 15 years before. You work on everything that you need to work on, because there are so few people and there are so few resources, that you don’t have people under you. There is only you to do it. Obviously, what I’m telling you is ancient history – this is pre-Internet, this is 1979. You didn’t have QuickBooks and Xero and MYOB and these other online accounting suites to help you at that point. It’s much easier today. But still in any startup you have limited resources. And everyone has to do a bigger job.
And what was your primary driver, why you left the big company where you had, I believe, a comfortable position, and joined that very uncertain endeavor?
Actually, it’s a matter of a person’s nature or character. There are people who don’t like working in small companies. There are other people who won’t work in big companies. There are some people that like risk, that enjoy it. And others that don’t like risk at all, and won’t do anything risky. They join large corporations and other organizations where there is not much risk. And I’m the kind that likes risk.
How was your experience in that startup?
That was wonderful. When we started out, I was the fifth employee. We grew steadily. We got our financing from an arm of Exxon Mobil Corporation. And for a while we were in fact a subsidiary. Anyway we continued to grow and outgrew that. And ultimately came to moment when we did an Initial Public Offering (IPO) in 1984. We were listed on NASDAQ.
By that moment, how big the company was?
There were maybe 900 employees. I’m not sure about revenue at that point, might have been US$70-80 million range. We ended up in 1987 when we sold out at over US$120 million and over 1,300 employees. Once again, this is back in the days when you didn’t have the computer aids that one does today. So employees were not as efficient as they are now. But it was still a big company and I certainly learned a lot. We all learned a lot.
So what was your next career move?
After that I wasn’t interested working for any other company than a startup. And I worked for several startups, none of which “caught fire”, if you will. And at one we had a very good idea, and then Microsoft also thought it was good idea and they announced they will come out with this new feature in their software, and they just killed the company by that. There were others, there were turnarounds, all kinds of different companies that I worked for. A recent one was a group put together by a former Vice President of Texas Instruments. Today it’s doing quite well. I’m no longer associated with it. They had a change in direction and they have stopped investing in outside companies, and started working to build the company internally.
What’s interesting now is that there has been a huge change in the accounting world. It’s almost unfathomable. Back when I graduated from graduate school, I could easily tell people “go to this or that school, they have great accounting program, and you’ll always have a job, because companies always need accountants.” Today – and this has been truth for quite a number of years – so many accounting functions have been outsourced, from every direction imaginable. Outsourcing jobs from the US to India, some from India to Philippines – it’s all scattered now. There are whole companies in the Philippines that do functions such as accounts receivable and collections for major companies in Europe and US. Auditing is done by scanning documents and sending them to lower cost areas – India, Pakistan, Philippines, wherever – the lower level work can be done there. So it had a huge impact on what is done in US and Europe, in terms of what kind of work accountants do. It is for good or for ill – I don’t know.
Myself for example – I had some medical issues, I had to stop working for a while – and there was no place for me in a regular day to day office. That’s why you found me on oDesk,com. oDesk.com and Elance.com are two websites where I have been getting my work. I’m currently a freelance CFO or virtual CFO for a US subsidiary of a Swiss IT company, CFO of a B2C marketing site in Florida, and CFO of a B2B online access site in California.
I did financial planning for a movie director in Hollywood, who decided that directing was not a good job for a man with a young child and wanted to do something different. So he decided to do, what is called co-working. I’m not sure that you have it in Ukraine, where people have these large offices and you could come in and rent them by the hour or by the day, and they have computer facilities and telephone facilities and everything is there – so it’s called co-working. And that’s what he decided he wanted to do. And I essentially taught him accounting and how that business works by doing the financial model for him. And he is just now raising financial funding of several million dollars to do this. And I will be CFO of that enterprise when we get the funding and start construction.
So it’s actually a lot of fun, working from my office. I interviewed and worked for people in England and New York, and interviewed with a fellow from Mozambique for the modeling job that he had. It’s just amazing to me how the internet and these websites have broken down the barriers, so that people do the jobs around the world.
That’s interesting. But do you think that local presence, for example, in US is still relevant for some positions or some types of work?
Absolutely. There is a basis, even in accounting – you may be able to outsource some of your middle-level functions, but there is basic accounting and higher level financial functions that you really can’t outsource. Marketing, the direct face to face meetings with customer are still essential.
If you would make recommendation for people who are only starting their career, would you recommend accounting as a profession or should they focus on some higher-level job types?
OK, let’s talk about what accounting used to be. It used to take a bunch of courses in accounting with all these strange aspects of accounting, different kinds of combinations and consolidations, auditing, a little about economics and other things. Today, accounting is still good place to be, it’s not like it was but it’s still good place to be. And a person needs much more to be well rounded, knowing finance, economics and math. Math is very important because of the modeling that is being done, to try to project through relational modeling what is going to happen in the future.
How important do you think education is for good career? Can you just jump straight into real life work?
I have no idea how it is in other parts of the world, but I will tell you that in US it is absolutely essential to have a degree. There is movement here in the United States to online courses. But the rigor of having to go to class and studying the core requirements for your degree – I think that higher level positions and better jobs are going to go to people who have a degree from bricks and mortar university, for quite some time. Which doesn’t mean that you can’t take online course – because more and more schools are offering some of the courses online. But it’s not just the degree. Employers are looking for people who have the smarts and the self-drive. They are self-starting – you will give the instruction, they will understand it and go and do what you want them to do. And the more they do that, and the more complex instructions become, the more value they have and the higher they rank inside the organization. Unfortunately, there are many more people trying to get jobs than there are jobs. So employers use such – what I call surrogates – such as a degree from a good school and work experience, if they have it.
Do you think it is a matter of hard work studying during someone’s university years or is it more a matter of chance to get a good job and start a career? What is a role of chance?
Chance is always there in life. When you step off the curb to cross the street – you’re taking a chance that a car might hit you. So the chance is always there. And, frankly, there are some issues like how much money do you have, how can you afford to go to school. Going to school and getting a degree is important. What I see is people taking the road where they want a degree no matter what it costs, because they can get a loan here. And they would end up with a degree that is not worth a lot in the market. I see a number of people taking online degrees and they are spending way too much money. But for accountants – if you did a pure online degree – I’m not sure what kind of job it would give you. I don’t think it would give you the same job that a four-year degree from a university would give you. I just don’t think that they value it as much. But with accounting even more than with some other degrees – working during study, or taking time off the school trying to get the best job you could find in the field – really adds to the diploma, making you total life experience, both education and on the job, much more valuable to an employer.
Who is the better match for career in accounting and finance – introvert person with very diligent attitude or extravert and easy going personality?
Let me not do it introvert-extravert. In almost every job you get today you have to be a team player, because people do things as teams. Back when you had all the little accounting jobs cut up in a little pieces and everybody did their own job. Today much of that is handled by the computer. And so it’s more of a team work, working on problem, working on a new project, working on a new division of the company or a new branch of the company that is opening up. This is the sort of thing where you have to have a team together on the worksites. So it’s teamwork. And knowing how to work on the team, obviously, it takes interpersonal skills. If I’m out there looking for a school, I’m going to ask in the accounting department, in a second or third year – what work will you do as teams, toward a teamwork in accounting. Because that the kind of work they are going to get outside.
You mentioned that a lot of work is outsourced, a lot of software doing the routine tasks. What do you think – how accounting could evolve in next 10 to 20 years?
Oh my goodness. That’s way too far out. We are on this logarithmic curve of change. I don’t think anybody can predict, really, what’s going to happen. The automation of functions is accelerating. Even analysis is being computerized. But there are still interpersonal skills… Let me just give you an aside here. I ran into a company where they had 31 subsidiaries that they bought, all IT subsidiaries, all overseas. And they were running all of them with the staff of a 3, and they also had 1,000 contractors on oDesk working for them. So there was not a lot of interpersonal interaction with that one. But for most companies, still, you are going to have working together as a team, between accounting, marketing, production, research and development and all of these. And so it’s going to be interpersonal relations that you cannot automate. And at least for the time being, ideas, or the spark behind the company – what does the company do, why does that company do, why would you buy what they made – that sort of ideas can’t be automated. That has to be human. There is going to be a lot of automation that is going to help with the implementation, but the basic implementation has to be left to the humans. And they are going to work as teams. And this is further point to have interpersonal abilities, ability to relate to your fellow workers. And after 35 years I have found that people are very different. You talked about chance – people are the most random things that are in business. And being able to deal with that, with differences between yourself and other people, and still, being able to work in a team is critical. So, in relation to other profession, accounting is the “tail”, not the “dog”. The critical issue is to create a product that people will buy. Accounting is in back, supporting all of this. So if you are in accounting, you especially have to be a good team member, simply because you are replaceable. They can find another accountant. They may not be able to find the best marketing guy, or the best research guy, but they can always find another accountant.
Can you mention some mistakes or career traps that you have seen thru ought your career? What should be avoided or what should be in focus to have a good career?
In today’s world, if we talk about career – let’s talk about your life. You need to be sure, that in addition to your career you have a life. Because that’s why you work. Work is a rewarding part of your life. But for most people that not their whole life – they have families, they have brothers and sisters and parents, they may be married and have children, they have friends, and they belong to different organizations. And these are the other parts of life that can’t be ignored. If you’re working for a company that does not recognize that, that does not value employees, than you probably need to find another job. Because in the end you won’t be happy with what you are doing and you won’t be happy with your life. And a company that does not value its employees is ultimately not going to be successful, not like others in their field. There is any number of studies here that show that you can’t have a successful company if you overwork employees. And as accountants – you are probably going to be an employee. So that’s the big trap.