1218: Why Pegasystems Is Betting on Work, Not Tokens | with Ken Stillwell, CFO, Pegasystems

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0:16Ken Stillwell: Hello, this is Brittany Serwin, CFO of the Middleby Corporation, and you are listening to the CFO Thought Leader podcast. This is episode 1218.

0:30What if you actually really engage and try to understand where's the product gaps? Where's the competitive threats? Like that then kind of almost builds this really tight bond where the sales leader looks at the CFO and says, you're on my team. You know, you're not like someone that's like holding me accountable all the time. You will hold me accountable, but you're also someone that's going to help pitch in. And I just kind of like that was more natural for me because I wanted to be in those conversations. But I think if you're a CFO that it's not as natural, my suggestion is make it natural.

1:03Like get in with the business and understand where they're coming from, whether that be sales or the product teams. They'll have a lot more respect for you and you'll be more educated around not just planning, but just how to run the business. And I think that's how you get into strategy, I think, is living with the business. Hi, it's Jack. On today's show, we speak with Ken Stilwell, CFO of Pega Systems. We hear a lot about CFOs becoming more strategic. But what does that actually look like? Ken Stilwell offers a pretty good practical answer. You don't become strategic simply because someone invites you into the strategy meeting.

1:48You earn your way into those conversations by getting close to the business, customers, salespeople, products, operations, and by becoming someone other leaders actually want in the room. There's an interesting distinction there. Finance can hold people accountable from a distance or it can build enough understanding and trust to help them solve problems. Ken's career offers us a useful look at what happens when a CFO chooses the second path. Our talk with CFO Ken Stilwell begins after this. What is a forward finance organization? Finance leaders are under pressure to move faster, adopt AI, and guide decisions across the business.

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3:36and see how to turn AI ambition into real business value. Visit us at onestream.com slash forward finance. That's onestream.com slash forward finance.

4:01Hello, CFO Ken Stilwell is with us. Ken's career has taken an uncommon path, moving between finance and operating leadership before bringing those experiences together in the CFO office. Along the way, he led business units, held several CFO roles, including at Dynatrace, and joined Pegasystems as CFO in 2016. Today, as both CFO and COO, Ken brings a particularly broad lens to Pegas business as cloud AI and changing software economics to reshape the company's next chapter. Ken, welcome. Thanks, Jack. Great to be here. So, Ken, as you well know, and I'll mention the audience, Ken was with us, I don't know, eight years ago or so.

4:54But we're going to invite him to go back memory lane. Take a look back for us, Ken. How'd you become a CFO? What was your path? So I started in public accounting, and that kind of took me into mergers and acquisitions, which was really when it was just becoming a thing. We're talking about like the early 90s, mid 90s. And I ended up going to work for one of my clients and right as a CFO of one of their businesses. So really didn't have, you know, came in kind of, I think drinking from the fire hose, really not much experience, wasn't a controller, wasn't an FP &A. And so I had to make the quick transition from, you know, somewhere where I didn't worry about making payroll, for example, or in a firm like Pricewaterhouse versus getting into a business where you had to make sure that you looked at your cash and your collections and you're constantly making sure that you had the resources to keep the business moving at the pace that you needed it to.

6:00When you jump into industry, you're the head of a business unit. It's not like you're a controller, though. It seems like already you're demonstrating some level of leadership within the company. Yeah, the way that in the early part of my career, the businesses that I was involved in had an expectation that the CFOs were very operationally focused, that were walking the floors and understood the products that you built and understood the clients and understood margin on every contract. There was just this expectation. You couldn't really do that just looking at the numbers. You had to actually understand things like, you know, this was a manufacturing business early in my career, you know, things like, well, you know, like how is, you know, how much scrap is in the dumpster at the end of the week, right?

6:52And can we think about ways to purchase materials to improve margins? So you had to really be in the business. You couldn't spend your time on spreadsheets. And that was really what I think almost indoctrinated me in to the belief that like, if you want to be a good CFO, you've got to be like in the business. You've got to be right with the business. When you look back, was there a career move and maybe you changed companies or maybe it was a career move within a company that you might have misjudged at the time? And that's a broad word. You can take it any which way you can. But when do you think, looking back now, I might have misjudged that or I thought that was for me and it really wasn't.

7:38Well, I, um, so I had had some early successes in my career where I got involved in a business, we had an exit. Um, and I had a couple of those where it felt like it was a process of fixing a business and capitalizing on that opportunity was quite routine. You know, quite frankly, I was naive at that time, you know, it was, So because I had started in my, you know, when I become a CFO, I wasn't in my 30s yet for my first CFO role. So by the time I got to my mid-30s, I'd had a couple successes. So I think I probably had been almost conditioned to think, well, if you just execute and you just go through and run the plays, that things will just work out.

8:19So I went to work with a mid-market private equity firm, really working on turnarounds for them. So my role was kind of an operating partner, pseudo-operating partner, but I would drop into their portfolio companies to try to help fix the business. And what I found was that what my experience may have been in my first two opportunities was nothing like what the experience is in every business. Because some businesses don't really have the, you know, they don't have the market position. Or they may be in a market that's being massively disrupted. Or they may have poor leadership or incomplete funding, right?

8:54So there were, it's, you know, I think maybe I was just naive to think that like every business just have this automatic path to success. if you just ran the playbook. And that's just so far from the truth because every business is different. So M &A really is a common thread though, it seems as you just explained, because at Pricewaterhouse, it was at Pricewaterhouse. It wasn't like you were an auditor back then or were you? It seems like you got right into M &A there. So I spent my first two years at Pricewaterhouse in the public accounting area. And then what happened was the mergers and acquisitions team was just getting drafted.

9:33It was just coming together and they would pull people from the audit group. But the work that I did was really not audit. It was much more like diligence work that was done around quality of earnings with people or what we might call it today. And so we were really building like on a lot of those engagements I went on, we were kind of building the plane as we were flying, right? We didn't have, there wasn't this really sophisticated, here's how you identify businesses. Here's how you think about EBITDA adjustments. It was really like deal by deal. And so we worked with an investment bank and a client and we were kind of the kind of the eyes and ears making sure that the diligence was done at a time where most of the companies didn't have corporate development groups, didn't have CFOs that had models that you could go and kind of do your or a checklist of all the activities.

10:26So that really, that was a kind of a very surprisingly, to say this in Pricewaterhouse, but very entrepreneurial time because every deal we were kind of given the latitude to kind of figure out what might work and what might be the best path. And what that taught me a lot, I learned more in those few years in that then it was probably, you know, the equivalent of 10 or 15 years of experience in just a few, just because of the breadth and the variety of what I saw across industries. As you mentioned, you entered the CFO office rather early in your career, comparative to most CFOs, I would argue.

11:05But at the same time, your brand back then, you were a CFO who was able to do deals. And again, correct me. I'm just saying you were identified with M &A and you're a CFO at the same time. Yes. Today, I think you would be viewed perhaps differently. Not that, you know, that's your CFO brand M &A. No, it's a it's different. That's a great question, Jack. So I think if I reflect back in my 20s and maybe even in my 30s, where I was much more of a quantitative leader, right? I understood how to see patterns, how to understand where the numbers didn't make sense, understand where we might want to depress in, risk mitigate, where there might be risk in an acquisition or in a plan.

11:59And I think as I kind of got closer to maybe like, you know, my late 30s, I started to really get this appreciation through some of the CEOs that I had worked with and quite frankly, some of the heads of sales and other peers of mine at the time that at the end of the day, the numbers are a reflection of just what's happening in the business. So the numbers are actually passed either their history or their guess. But if you want to actually understand what's really happening, you've got to get in the business. You've got to understand, like, why does a client want to buy your product? How can you get pricing pressure or not pricing pressure with a client?

12:44Where do you have competitive threats? What are the motivations of clients? And then that led me into thinking about it from the employee side. How are employees motivated? How do we get employees really passionate about what you're trying to accomplish? So I think I shifted from what was maybe a really kind of maybe a sharper numbers driven person to being the business first and the numbers will kind of play out as they play out. So I think that's, there was somewhere in, you can't exactly pinpoint exactly where, but I think I just kind of naturally gravitated into being more of a business owner.

13:21And the CFO just happened to be a title that I also had is the way I would characterize it. And I want to understand, though, because we hear that frequently, I became more operational. I became more strategic. What does that mean? You're sitting in on meetings that the prior CFO might not have. I, you know, you are taking the sales team out to lunch. I, you know, what does it mean? How did, and as you, you know, realized I got to get out of this box, can you reflect some more on that, how you went about that? Yeah. So, um, so that I, I think some of this, um, can be trained or you can condition yourself.

14:03I may have been a little bit more fortunate because I'm a pretty outgoing person and I like to meet people. And so it was a little bit more naturally my style to get involved in meetings, to build relationships where people invited me into meetings. I was pretty open about sharing as much as I could in the finance part of the business. So you could use that a little bit as maybe an incentive for leaders because they feel like they can come talk to you. And a lot of CFOs like to shut things down. They like to say, like, I can't discuss that with you. Or like, my role is, you know, I'm a CFO. I have to kind of put a box around what I do.

14:44I never did that. I tried to share as much as I could with the business owners. And I tried to use that to give them coaching about how to think about the business. And then what that led to was them saying things like, hey, Ken, could you come to our offsite? Could you come to our QBR? Could you come into this meeting? Or, hey, we have this situation. I'd love to get your eyes on this. And it started with little things. And then if you use those relationship skills and really have some empathy around the fact that a sales lead, it's very easy, Jack, for a CFO or a CEO, for that matter, to look at somebody running sales and just say, you just need to sell more.

15:22You know, you just need to get the pricing better. You just need to work harder. You got to get out. But the reality is that's a very judgmental way of approaching it. But what if you actually went to some of those kind of customer visits? What if you actually really engage and try to understand where's the product gaps? Where's the competitive threats? Like that then kind of almost builds this really tight bond where the sales leader looks at the CFO and says, you're on my team. You know, you're not like someone that's like holding me accountable all the time. You will hold me accountable, but you're also someone that's going to help pitch in.

15:56And I just kind of like, that was more natural for me because I wanted to be in those conversations. But I think if you're a CFO that it's not as natural, my suggestion is make it natural. Like get in with the business and understand where they're coming from. Whether that be sales or the product teams, they'll have a lot more respect for you. and you'll be more educated around not just planning, but just how to run the business. And I think that's how you get into strategy, I think, is living with the business. Nice. Well, thank you for that, Ken. We probably will have a few more career-related questions for you a little later.

16:33Right now, we'd like to find out about Pega Systems. What does this company provide? Who relies on it? And where's the opportunity today? Okay. So every company has a set of processes, a set of whether they're compliance or operational or customer related, where they have to execute certain parts of their business. It could be onboarding a customer. It could be handling a renewal. It could be dealing with a service ticket or changing information for a customer. It could be kind of marketing and trying to access the client's, access visibility around what client opportunities might be. There's lots of things that businesses do where they want to operate through a set of steps and stages, a workflow, as you might call it, to be able to create consistency, predictability, and how the business is run.

17:28Pega has a workflow platform. We have the best workflow platform in the industry. And so what has happened over the decades is this large businesses in industries where there needs to be a deterministic process for how work is done. It can't just be up to a human there. You have to follow a process like a loan origination at a bank. We've had clients really engage with us very deeply on helping them leverage our platform to anchor in these enterprise processes. And what we've done over time is we've continued to add capabilities. We added AI back when AI was not really a thing, 25 years ago. We added in robotics and robotic process automation.

18:18We've worked on all the integrations to be able to access data and be able to use Pega as an orchestration engine to touch other systems. So really what Pega is doing is helping our clients execute significant scale transactions in an automated way, in a repeatable way, so that you get scale predictability and you can optimize for your employees and for your customers to reduce the amount of time it takes to run your business. So I want to point out to the listeners that you enter the CFO office at Pegas Systems in 2016. So you have already, there are multiple growth chapters here, no doubt that you've been part of, and you helped lead Pegas shift toward the cloud and as a service.

19:15And we're wondering, as you look back now, What was the most, perhaps, consequential investment behind that transition? I think there were a few, but I'll kind of touch on them briefly. The first was we had to ensure that the offering that we were proposing matched what clients needed. And so we came up with this concept called cloud choice, which meant that if a client wanted to leverage all the wonderful capabilities of Pega Cloud, we were there to support them. If they couldn't leverage that for internal compliance or data sovereignty or whatever that might be, we also allowed them to manage that cloud themselves as well.

20:07And so we kind of came up with this concept of PegaCloud and client cloud. What I think that gave us was the opportunity to meet a client where they were. We believe that every client should be on PegaCloud because we can give them a better experience and manage their risk. But not every client is ready for that journey, Jack. And so we actually, I think that was an important piece of optionality to match where the customer was. The second one was making sure that we had the right expertise in the organization. And so we went out and made investments and brought in a team of people that had run cloud businesses at major, and when I say that, I mean from engineering, architecture, operations, monitoring.

20:51We brought in people and made that investment so that we could scale a world-class cloud operation. And the third piece was we made sure that the incentives with our field, with our sellers, with our clients matched the journey that we wanted our clients and our sales teams to go on. And so I think if you match the incentives for our sellers and for our clients, you have a really good value proposition meeting the client where they are, and you become a best-in-class cloud provider at scale. That was kind of the pieces of the formula that we focused on. As helping to lead that effort, I mean, you were investing clearly ahead of the returns.

21:37Can you reflect a little bit on those? That's one of the times you really had to stick your neck out there. Yes or no? Can you reflect on that a little bit for us? Well, I'll give you a really specific example, which is all public information if you went back through our filings. When we started Pega Cloud, we wanted to get our gross margin to 80%, which is where our gross margin is now approximately. When we started, Jack, our gross margin was under 30 % for our cloud offering. And we had to accept that we were not just going to immediately go to 80%. We went from 30 % to 45 % to 50 % to 55 % as we were going up.

22:16And there was an inflection point in that journey where we had to actually take our margin back for a year. because we had to make some significant investments in how we scaled the operation. And it put us probably off our margin targets by a year or two, but it was a necessary investment for us to continue to scale. Now, after we made those investments, you saw our margin continue to expand on the trajectory that we had hoped it would. But one, we had to start with a margin that was completely substandard to what you would expect for a SaaS company in the market. But we also had certain investment step functions that we had to really amp up what we invested in our offering.

22:59Let's leap forward. Let's talk about the revenue model as it is today. Help us understand Pega's economics here. And is the unfolding story the most important story about cloud ACV? Is it customer expansion or is it something else? The way Pega generates value is we expand the relationships that we have with our existing clients, and then we selectively target new clients where we feel can start that journey to be able to have a significant expansion opportunity. So most of our growth has come from the actual expansion of our existing clients. When you first win a client, you typically don't win a client for a significant amount of spend in that early relationship.

23:49It does happen. But many times that investment is a little bit more modest. And then the clients get really, they get a lot of value and they deepen their commitment to working with Pega and using Pega. And then that allows us the opportunity to expand. As we expand, naturally, that PEGA cloud ACV is a really important expansion metric. And then we want to make sure that our margin is kind of a reasonable margin. We're not trying to make our margin as high as it possibly could because that might impact our investments that we can make. But we do think at our scale, we need to have an 80 % margin plus.

24:27And that's kind of we're right around 80 % right now. I'm curious about your visibility into the business. Before the financial results arrive, which customer behaviors perhaps give you the clearest signal about the business? I think adoption is probably one of the biggest measures. Understanding how clients are going live with new applications with Pega and how fast they're scaling the volume of transactions that they do on our system is a really important measure. So we've got to, you know, our internal approach is to really make sure that we help our clients in the early stages of getting them adopted, getting the systems really live and the way the clients want to experience them.

25:17Because if that happens, the natural volume of transactions and activity will follow. What maybe do you watch that investors might overlook? That's a great question. I think that the difference between where expansion is happening and not happening across the customer base, across the verticals, across the regions, is not something that we could possibly disclose all of that in our financials because there's so much detailed data in there. but I like to look for patterns. I'm a pretty big pattern recognition person. So I like to look at patterns like, are there activities that we're doing that help clients expand?

26:02Are there roles and functions when we more deeply engage with our clients, we get good outcomes from that? Are there clients verticals and use cases that might actually lead us to more opportunity than less? So I tend to try to look at like the patterns of what you're seeing within verticals, client size, newer clients versus, you know, longer standing clients and regional differences that happen. Because you do see a lot of, you know, when you look at things in Europe and APJ versus the Americas, trends, economies, behaviors, themes are different across those regions. And so I think watching for those, because a theme that emerges in one region, Jack, tends to emerge in another region later.

26:51So I think it's, you know, I like to kind of study what's happening in our customer base. One of the more, I think anyway, one of the more revealing parts of our discussions with CFOs has to do with decision-making. And I was trying to find a decision at Pega that we could zero in on and that perhaps you can reflect on a little bit more for us. Pega chose not to change clients per AI token. How did you reach that decision? Well, so we realized early on, and I think probably upon reflection, everybody would say that they probably all knew this instinctively, that if you were going to spend a trillion, $2 trillion maybe every year on building out the technology to support AI, that there was going to be a cost for that.

27:52And that that cost was going to have to be charged to consumers because that if they were going to leverage all of that hyperscaler capacity that was being built out, and we kind of saw that. I don't think that in hindsight, I think everyone would say that was a reasonable thing we all should have seen. But I think that that was pretty apparent to us. And so we knew that the free token or the free use or the$20 a month, we knew that would change because we knew that the model just couldn't operate any other way. We also knew that the economics and the efficient frontier of token costs, we didn't anticipate that they would drop as precipitously as everybody hoped they would.

28:36And the reason why is technology innovates and you kind of end up, now you look back, some of the frontier token costs are actually more now than what some of the earlier models were. So we also knew that you would end up with models that were misused, meaning you used too costly of a model for a transaction that didn't need one. So I think those were all things that were, quite frankly, more obvious to us early on. So what we really focused on was if we can allow clients to use AI, we'll help them use the right model at the right time. Don't use AI when it's not, when AI is not the most efficient.

29:15You might want to use a CPU versus a GPU if you're just trying to actually process a transaction. You don't need AI to actually do that. We felt like that we could control those costs for our clients by not charging them based on tokens and put the motivation of both the client and Pega to use AI for the right things at the right time and use the right model. And so we feel like the industry has kind of moved in the direction that we started, which is this concept of you don't want to have token maxing. You don't want to have token leaderboards. I mean, that's like, that would be the equivalent, Jack, of saying, let's see which household in the neighborhood can use the most electricity in the summer.

29:59Well, like, well, there's an easy way to do that. You could open up all your windows and run your air conditioning at 60 degrees. But like, would we ever do that? Of course not. So we felt like that this was a little bit of an irrational move to like, let's just use a lot of tokens. And we believe the market has kind of come to our belief, you know, probably in a big way pretty fast, too. We wonder where customers, you know, undoubtedly many of them are just experimenting, but where are customers producing measurable value today? Is that happening? I mean, it is happening. I think most clients that we talk to, and I think if you did a survey, you would probably see this with most companies.

30:48I think ROI has been elusive around AI. I think that companies would acknowledge that. And I think the reason why that is, Jack, is because there's so many use cases that people were testing and trying to use AI. This is just exactly the wrong place to use AI. Right. It's just not it's it's overkill. It's inefficient. It's actually not going to get you predictable outcomes. But so I think that that's not surprising, though. People want to try things out. They want to experiment. I think where you really see value is when you think about how you use AI in a specific activity in your business and how you can make sure that you leverage the technology platforms that you have and allow AI to do things that humans maybe couldn't do at the speed, the scale that you could with AI.

31:44A lot of the things like where you have to use judgment, where you have to analyze data and create a view of what you might think might happen next. But when you get into those are places where AI is pretty interesting and I think people are seeing value. The challenge is what does that mean to the business? For example, if you use agentic engineering, does that mean you need less engineers? Does that mean that you need or does it mean that you actually don't need less engineers, but you need a whole different skill set of engineers? You need people that focus on product management and testing more than writing code.

32:17So I don't think we really necessarily know how AI will shape our cost structures. That's to your ROI point. But I definitely think we're seeing use cases where AI is very powerful. And we're also seeing clients start to realize where AI is just not the right tool. And I think that probably over the next couple of years, that'll even get more precise in terms of those pockets of where you can really leverage it. But there's certainly value with AI. I just think that a lot of the spend right now is more trial and error. We wonder where you might see the software economics headed here. I mean, should customers ultimately pay for usage capacity?

33:04Or is it business value? Well, I think that there's not always a connection between the two of those, but often there is. And so I think when a software system is actually running and transacting, you should see a connection there between value. Either that value could be reduced cost of operations, better outcomes, value to a client, or faster processing or more accurate, for example. There's lots of different ways you could connect that value. I think at the end of the day that systems that do work, like Pega, I think clients will expect to pay based on the work that it's being done. That could be an outcome.

33:51That could be a closed loan application. It could be a faster closed ticket. It could be a certain activity. But that's where the value is. The value connection for clients is really connected to the systems automating more of the work in the business to reduce that cost of transaction and get humans out of things that they shouldn't be in and in the things they should be in, which is judgment and supervision. Ken, we are up to what we like to call the finance strategic moment. We're asking to look back in time. And again, this might have been last week, but it might have been 10 years ago. What would you like to share with us?

34:32We're looking for an insight that you've had as a finance leader or executive along the way that'll led you to, I don't know, avoid a risk, pursue an opportunity, whatever it may have been. So this happened at Pega, but it's also happened, I've also driven at it, a few other companies. And it came from really my roots in private equity before I kind of got into when I was more in operating roles in the private equity world or in operating partner roles. Rule 40 has something that is now commonly talked about and understood. Your revenue growth and your margin or your ARR growth and your margin, whatever two metrics are most applicable for your business.

35:19And rule 40 is really a measurement, I believe, of are you running a good business? Are you actually making sure that the trade-offs for growth are not diseconomic? And they're thinking about those trade-offs. So I kind of have almost a rule 40 DNA in me. And I brought Rule of 40 to Pega, we probably really leaned in on it about maybe seven years ago or so. And it was really part of this transition to the cloud and how we needed to think about running a good business and what that meant. And the uptake within Pega has been incredible. I would say that if you walked through Pega and you asked every single employee what Rule of 40 was, I would bet that 95 plus percent would be able to tell you what it was, why it was important and be able to give you some little anecdote around it.

36:15What that then did, Jack, was people started operating differently. They started thinking with a rule of 40 mindset. They started thinking about where there might be waste, where there could be improvement, whether cost drove growth or didn't drive growth. I think that is probably the most impactful thing that I've seen happen at any of the companies that I've had is the change at Pega. When I started at Pegajack, we were a little over$500 million in revenue and less than$50 million in free cash flow. And last year, we're approaching$2 billion and we were approaching$500 million in free cash flow.

36:54So we've made a pretty significant business shift. And I would say Rule 40 is a part of that.

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38:07We're going to enter what we like to refer to as the mentoring round. And this will be fun because I do think you have a point of comparison. You stepped into your first CFO role. You were rather young. So this is that question. What do you know now that you could go back and tell yourself when you, for your first CFO tour of duty, what is it that you would have told that 20 something? Yeah. So, uh, I, I've, uh, I've not used this as much recently, but I used to, uh, I, I used to say, I tell people like there are, there are three things that I think if you do them as an executive, you will be successful.

38:48Like you will be successful. CFO included. Um, the first is, um, to, to really just kind of, you know, bust your ass, like get in, get involved in the business, um, spend your time understanding the business. Don't think, you know, everything like learn from people, even people that you might think have very little to enlighten you on. You'd be surprised, right? When you actually just spend time and try to understand. And that's everything. There's a lot of parts of the business that don't get attention. And if you as a CFO went and spent some time with them, they will tell you all kinds of things about what's happening in the business because many times people don't come and ask them about what.

39:32So I would say the first is just really lean in. Like, don't be a passenger, like be a driver and get into the business. The second piece of it is this, there's a level of humility that I think is important as you progress in your career. A lot of executives, and this is an unfortunate, probably human nature thing more than anything. You become successful and you feel invincible when you think you know everything. And that's just, you know, that's, and I think there is, you could be confident and still have a level of humbleness or, you know, an appreciation that, you know, you don't know everything.

40:10And so what that will do, I think, is that'll help you in tough times where you won't feel dejected because things didn't work out your way, right? You'll be able to say like, you know, I've seen these times before I made a mistake. How do we course correct? And also in times that are really good, which if you remember one of the examples that I gave you, which was early in my career, I had a couple of successes and I thought everything looked like success, right? But the reality is everything doesn't always look like success. So having a level of like, just, you know, it will build like a level of endurance and I would say like kind of strength in how you operate.

40:49And the third piece is really like just a level of care, like care for your team, care for your clients, care for them. There's a real risk in CFOs that maybe aren't just experienced that they view themselves as a CFO, that their job is to report and judge on the efficacy of all the different parts of the business. But the reality is every one of those businesses is going through something. Every one of those people are going through something at work and quite frankly, outside of work. And I think just appreciating that whatever you can do to be helpful to your team, to your clients, to your peers, to your boss, to your board, I think will build such a level of loyalty and following with the people that you work with, especially if you're genuine, right?

41:41You don't want to, certainly you don't want to, this is not something you should be like faking. Like you should really care about what's happening with people in your business. And so those are like, that's, that's kind of my trifecta of how I try to operate. Can we always like to ask our guests to reflect a little on the personal side? We wonder, uh, you've been there a long time. So your colleagues might know everything there is to know about Ken Stillwell. At the same time, there must be something, something from your past, something way back when, a feat that you, you know, accomplished, a milestone, an interest that you pursued, anything?

42:21I think that I live. So, Jack, I'll give you maybe my view. There's three things you can spend your time on in life. You can spend your time on work. You can spend your time on your family and you can spend your time on yourself. I would admit that I do not spend much time on myself. I'm not saying that's healthy. I'm just saying like, I know, I know there's not a lot of, uh, it's not a lot of things where I say, Hey, I'm make, make room. I want to go do this for myself. I find it hard to balance all three of those. And so my entire life has quite frankly been around how I live vicariously through my wife and my children and try to participate as much as I can outside of work with what they do.

43:07So I, you know, sports coaching, driving five hours to watch my son play lacrosse, flying down to see my son in Texas for parents weekend and really immersing myself in, you know, all the things that happen at a college tailgate and call it in a football season. Like to me, it's like that. So I don't, I would say personal feats are probably that's, that's, I probably don't spend enough time on just myself, but I really enjoy being, uh, watching like the, you know, the growth of people around me and, and I have three boys. So it's, uh, I get a lot of watching that. That's a really interesting way to describe it.

43:46And I want to thank you for that because we have a lot of, uh, you know, finance leaders who tell us they want us, they spend time with their family. But to be honest, what you're saying is it takes effort to logistical feat in some way, as you described, to try to keep up with the daily lives of your loved ones. So I like the way you described that. Well, and also, Jack, the other piece of that that's really interesting is if you do that when you can, when you need to do your two-week trip to Asia, your kids don't mind because they know you were there when you could be there. Right. Right. And it gives you peace of mind, too, because, you know, that, too.

44:28And that that is a tough foreign travel, really, really can put a dent in people's lives sometimes. So what about a is there a book or a resource, something that you've depended on over time or something that you've returned to something that influenced you? Or maybe it's something you escape with, you know, on that long trip to Asia. I don't know what anything. So I, um, I, I like to, uh, one of the things that I listen, and this is a little difficult because they are big sec, they're big segments. So they're typically, but I listened to the acquired podcast, uh, which is, which they're typically between three and six hours, but they, so you have to like really pay attention cause you can, you know, you could lose the thing.

45:15But what, what I'm most interested in is they tell the story of these big brands and how they came out of nothing and how they, you know, how they like emerged. And so I, I kind of, I really enjoy that. It's something like I almost, they, they drop one every month. So I really enjoy listening to that. And the, the connection there is there's a book called profit from the core that was written almost as from a, from like Bain kind of like Bain consulting kind of that, that was a, it's, it's a spinoff from a Bain partners, but it's a very interesting book around how to be centered on what you actually are good at.

45:50And I connect that acquired podcast, which was to find a niche and to like really win in that niche. And that kind of the principles around profit from the core, like I, I really think it's important to like differentiate because if not, you know, you're, you really have a hard time winning in the market if you look like everybody else. And so those are some things I kind of lean into. Yeah. Wonderful. Yeah. Yeah. Great, Great selections for us, Ken. Thank you for those. Hey, we're up to our final question, and this is where we're going to finally ask you to look forward. We want to know about the coming 12 months and what your priorities are.

46:27Well, I mean, I think the thing with, you know, right now we live in a world of AI changing a lot of things and a lot of, you know, a lot of kind of visions of what that might look like. Some rational, some irrational. Um, but we're also going to be hitting into, uh, you know, uh, kind of a mid cycle election, you know, in the, in the Americas. And I think a lot of, you know, there's a lot of things, uh, kind of going around, going on around the world that are, you know, create some levels of instability. So my focus over the next 12 months is, is really to chart the course for, for the business to make sure that we're agile and be able to deal with some of the variability that you might see in the market.

47:12And we, and also we can help our clients where they are through a lot of this change. So I think it's, it's never been more important than the time we're in to be able to manage change well, and to be able to be calm. You know, it's important to, you know, if you're, if you're charter, if you're, if you're the captain of a boat, you're hitting kind of rough seas, the best thing you could be as calm and process focused and make everybody on the boat, you know, know the journey that we're on together and not to be, not to like let yourself get caught up in the emotion of, you know, economic cycles.

47:45So I think it's the stability and the kind of the being the strong, you know, kind of driver of getting ourselves through uncertain times. Ken Stilwell, thank you for joining us on CFO Thought Leader. Thanks, Jack.

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