Tough Choices in a Downturn

Derrek Gafford, CFO & EVP, TrueBlue

When it comes to challenges, the task of organizing the company's response to the recession probably won't be rivaled any time soon, says Derrek Gafford, CFO of TrueBlue, a $1 billion industrial staffing company.

"We had to make some very difficult decisions in short order: deciding which branches to close and consolidate, how to reduce head count," Gafford says. "At the same time, you have to keep top talent. And from a liquidity standpoint, we compacted a number of decisions in a very short time."

Gafford, 39, managed to cut TrueBlue's operating expenses by $70 million, or 20%, in 2009, allowing the Tacoma, Wash.-based company to post a profit despite a 25% drop in revenue.

He joined TrueBlue as treasurer in 2002 after serving as CFO at Metropolitan Markets and working at Albertson's and Deloitte & Touche. He has a B.B.A. from Boise State University.

Derrek Gafford You mentioned a variety of liquidity decisions. Can you talk about that?
We moved our lending facility to an asset-backed facility. It makes your level of liquidity much more stable. And if you're in unstable times, it's nice to have a stable borrowing capacity.

The other thing was that we were able to reduce the amount of collateral that we had to put up as part of our insurance agreements. Without going into too much detail, we got $50 million in collateral back by proving out efficient financial models.

When you talk about retaining talent, are you talking about finance or companywide?
Companywide. Two or three things stand out when you're going through an exercise like this. First, you can't communicate enough when making tough decisions. Second, there are respectful and disrespectful ways of letting people go; I think we went about this in a respectful manner.

What has been your most rewarding project so far?
They fall into two buckets. First, projects where the finance team has been involved in improving performance. Here's an example. A big part of our costs is sending out taxes. Our full-time staff is about 2,500, and when you talk about temporary employees, it's 300,000. So we send out a lot of W-2s.

As you know, unemployment taxes went up. We had to go to our customers and tell them that we had to increase our prices because of unemployment taxes. You can imagine how difficult those discussions were. We got off to a slow start in those discussions, but we were able to help get clarity on the mission and establish an approach.

The other bucket consists of projects that help develop people in the finance and management teams.

How did you come to be working in finance?
I started in public accounting, but I've always had a passion for the full spectrum of how business works. My belief is that finance offers the best approach toward understanding business.

What do you like best about your job?
I get involved in a wide variety of topics that span the company's operations. Those learning opportunities and challenges are at the heart of it for me.

How did you get on the career fast track?
No. 1, as I made decisions about my own career, I did not make compensation at the job the No. 1 priority. I made job opportunities and learning opportunities the key to my decision. Don't get me wrong, compensation is important. But I didn't let it be the main driver.

Did you have a mentor and how important was that?
I've had several. A mentor provides diversity and perspective on life and careers and gives you the opportunity to leverage other people's learning experiences.

What skills at the most sought after now?
The most misunderstood thing that people do is to focus solely on technical skills. Those skills are important early in your career, but as you move through your career, management, communications and value creation skills become much more important.

Your career can only go so far by being smart. You have to get results through other people, which is where management skills come in. And you can be the smartest person in the room, but if no one knows what you're talking about, what good is it? That's where communication skills, both speaking and writing, so that nonfinance people understand what you're talking about, are very important.

And finally, the value creation piece: companies want finance people who can partner with other marketing departments, sales people, operating management, who can bring thought leadership and create more value to drive more sales, cut expenses, create more efficiencies.

What advice would you give newbies starting out in treasury and finance now?
Look for companies that value attitude and aptitude over specific functional area experience, ones that are willing to look at the potential of the person.

My second advice is to take personal responsibility for your own career development. It's on your shoulders to make sure your career moves forward.

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