How To Get A Meeting With The CFO

John:               00:12 What's up, guys here? Welcome to the Heads Up Adviser podcast! Today on the show, I've got my buddy, client, and good friend Gary Bender. Gary is a CFO for many years, probably more than he wants to admit to, but he's been around the block and back. He understands the world the CFOs live in. He's actually an owner of a company as well, so he knows the ownership side. He's handled some lovely HR duties in his past when they've made him do it. He also runs a group called CFO Solutions that meets on a monthly basis to talk about best practices. I've had the honor to speak a couple of times at his event and Gary, welcome to the show.

Gary:               00:53 Thanks John. Great to be here.

John:               00:55 So you gave me the stat a long time ago. It is my favorite stat and I use it in a lot of my talks now because it kind of puts the CFOs on notice, because they don't know what they don't know. What's that? What's my favorite stat that you always give me?

Gary:               01:10 15 years ago, the average price that the average tenure of a private company CFO was 84 months. People are startled when I tell them the average is now 28 months. And people always turn and say, "Well that's because the mergers," and I will tell you you've got a decline of almost 55 months, 56 months. The fact that company A bought company B and company B CFO lost his job accounts for less than one month of the 56-month decline.

John:               01:39 And why is it that, why is it that is so short now as compared to then?

Gary:               01:44 CEOs have gone through some tough times in the last five years and they realize they need a CFO adviser. They need a trusted adviser as CFO, not a backward-looking accountant or controller. They need someone who can assess risk, drive process improvement, be honest with them, and challenge the status quo. And if you can't do that, either the CEO or the board is going to look for somebody better. And I'm astonished even in my group of CFOs that we talk to every month, I'm astonished they don't know why they got replaced.

John:               02:18 Yeah. You, you've seen the turnover cause you're usually helping these guys get jobs. Can you back up for a second just to define the different types of CFOs because you know I'm in a market where you might have the CFO title, but I think they're the farthest thing from a CFO. Cause my, my thought and understanding was that it's more of a strategic position. And I see very different from size companies or different CFOs. Now me and you, we got along because I walked in the meeting and, well I should say the second meeting I gave you the numbers. I think it was in and out 15 minutes because you got it. So talk to me about the actual role of a CFO, the different types, maybe what some of the people that are actually a CFO and those that are kind of pretending to be one.

Gary:               03:01 About half of the top financial execs in, in private companies. And I'm talking companies from 10 million to 250 million. So you know that's, that's American. That's probably 70% of the employment. America's in those kinds of those size companies, regardless of sector they're in. Most of those folks are controllers. They might have the title of CFO, vice president of finance, director of finance, but most of them are controllers. They spend their time ticking and tying, looking in the rearview mirror, closing the books and providing some, some traditional accounting report to ownership. They shouldn't be the top financial executive in a company. Most companies need a strong controller and they need a super-strong CFO and I actually use the term CFO plus somebody who can take the tasks that the CEO or COO don't want to do. Put them under the CFO's responsibility. We'll figure out how to optimize processes, drive productivity, usually absorb those processes and reduce costs, reduce risk, drive cash, and probably even reduce payroll. People say it can't be done. We do it every day. If you know what you're doing,

John:               04:13 So are you calling him maybe a CFO plus now because it's like everybody's a CFO or are they just,

Gary:               04:19 No, I'm saying the goal is to become a CFO plus a, as I look across the CFOs that we mentor and coach, less than 10% have the aptitude and risk profile and intelligence to be a CFO plus the [inaudible] to come back. And your point 50% are barely good controllers and that's the dangerous part.

John:               04:39 Yeah. When you gave that stat of, you know, revenue, we, we live in a world a lot of times where it's number of employees. Is that playing to it or is it strictly typically a revenue-based?

Gary:               04:49 No, no, I, I see bad CFOs at $500 million companies,

John:               04:54 But would the CFO exists on a 25 life group? 100 life group?

Gary:               04:58 Sure. Yeah, sure. My company has 70 employees. The owner and I both have a lot.

John:               05:05 You understand the reason to have one? I feel like when I meet with these groups and if they're under a hundred lives, it's usually not a CFO. It's a controller.

Gary:               05:14 Absolutely.

John:               05:15 So do you see that you know the market where they're in the hundred-plus marker? There are certain size companies only and they just don't have them in smaller companies they don't think they need them.

Gary:               05:27 Well usually they can't afford it. Yeah. We need to have a CFO. CFO is going to earn at least twice as much as the controller and the controller will satisfy the bank, satisfy the auditors, provide some basic level of information and if you don't know better, you're satisfied with that.

John:               05:43 Is this controller kind of like a an in house CPA? Is that their role to an extent in house accountant? Yeah.

Gary:               05:50 Rearview mirror, tick and tie. Keep the bank happy, keep the board happy.

John:               05:54 We like to call them historians. Is that maybe a pretty good term form versus the CFO.

Gary:               05:59 CFO. Therefore from a CFO.

John:               06:01 Give me the different, the key differences. You know as we approach a client that has a controller versus a CFO, we're going to get into discussions on language and what they each do, but what way am I communicating? I have to understand the communication difference between the two.

Gary:               06:20 Well, if you're talking to the controller, you've got a challenge because they're, they're looking, they're looking at history, they've got a certain sense about what's going on in the current marketplace and they've got a certain sense, very limited of what is, what are the next couple of years look like for the business. So in a lot of these small companies, they don't know what's in the owner's head. They don't know what's in the board of directors head is the economy growing? Is our sector growing? Is technology going to replace us or or or support our growth because they're not in board meetings.

Gary:               06:50 And frankly they probably shouldn't be in the board meetings. You'd hope that you've got a director who's got the financial and visionary acumen that complements the CEO. Most controllers don't. So back on point, you're dealing with a historian. Do you use your term? So you start to ask the question. What I would suggest to guys like you if you're talking to controller is understand the trend in history either in their business or in the small, small hundred life, you know, sector to use your example. And then have them compare their history to the market history and then throw them a curveball and say, here's what best in class is doing in that sector, so take your a hundred lives in manufacturing or a nonprofit or academia, whatever information you have and show that the best in class people aren't going up 8% per year and raising deductibles and raising copays and squeezing the cost to the employees and actually showing that best in class processes and practices by really good brokers who are aligned with the client, not aligned with their compensation model, their historical model that they can develop a win, win solution, win for the company, win for the employees and the broker can win because the broker earns that on a performance basis.

Gary:               08:07 I think you want to take, you know, again, upper core tile, why are they holding their costs flat and your stress to even a historian account and understand 8% per year. In five or 10 years, you've doubled a pretty significant line item in your budget has now doubled. Are they even responsible though for the budget? When you're in a controller position compared to CFO, CFO is, you know, bottom line, that's their responsibility. That's what they get fired over. Is a controller even responsible, are they there to just check their boxes, do the work and go home two thirds or check the box, go home, keep the auditors happy. So you're not found to be doing sloppy accounting, you're not found by the bank to be doing fraudulent accounting and fraud may be a degree of making a mistake and not understanding the loan agreements or the weather reporting agreements. That's the most the two-thirds of your controllers can do in small companies. It's a tough job.

John:               09:04 Am I right in saying a controller would be more like a, if you're going to an accounting firm that does taxes and does auditing and strategy, right? Advisory. Would it, would a controller be more of like the accounting and auditing and the CFO be more that strategic?

Gary:               09:22 Absolutely. Even the tax piece because to do, to do tax planning, you have to know what's going on in the future and the risks to use your example, and it's a good example of ti accounting and audit are all in the rearview mirror. Okay? So it's hard to drive your car if you're looking in the rearview mirror and you're talking to somebody about driving their car for the next year or two, making plan changes that are strategic, that benefit employees retention, recruitment, they're not in that world. So you have to find a way to bring them into that world. And the best one I can think of is let's go look at history for people your size. This in New Jersey, in our example, the historian, is there a history to the historian, but break it out to there. There are people that are not following the norm.

Gary:               10:06 Here's your average. Let me show you upper core tile and lower core tile and just say bring three or four years a year history. We have it in the plan documents. We have your history and let's go look at the total spend because you've been squeezing costs most likely to your employees. So let's look at your total span and where would that put you on a ranking by quarto. You're going to find statistically, if they're even taking the call from a new broker, if he gets your foot in the door that that at least half are in the lower core tile. You just have to hit them on the side of the head with information they can relate to.

John:               10:42 What is the hot button for controller? What are, what is their number one objective or goal that if I'm in a meeting and I'm trying to convey a message to the control and we'll go to the CFO because it's very different, what is the message maybe I want to convey to the controller and hit the hot buttons.

Gary:               10:57 You're in an area that you've never been trained in. The market data is incomplete and biased. There is fake news in the healthcare marketplace about what expectations are, so give them the facts. If you give a historian the facts, they can relate to it and that's a good on a projection. But if you give them the facts,

John:               11:17 The typical Geico, I'll save you 20 40% thank you.

Gary:               11:21 Or five-year. Don't give him the, don't give him the fear message that it's gone up 10% so my 8% increases is great. I'm doing my good job. You don't need to talk to anybody else. Just look at history. And the reality is let's say it's your current account and you either want to educate them to do a better job and to introduce some, some things that can help them go back and even take a current account and look at the history and say you've been doing five or 6% per year and you felt pretty good about it. What if I show you using your data for the three years? Had we done this, this and this. You could be at zero zero zero without squeezing the balloon to your employees.

John:               12:00 Oh, I like that. So it's, so instead of showing what could be, we're going to show him what could have been but could have been in the past.

Gary:               12:07 Their data. Yeah. Okay. That's their day. Who's use their own information? Again, use their bullets. Shoot them with their own bullets.

John:               12:15 Yeah. I've, I've typically, you know, I've done it before, but I've, I've strayed away from it. We're so far looking in the future, but I guess you make them, you know, feel bad for what could have been done now versus,

Gary:               12:27 Oh, they're not going to have feelings now. Give them the facts. Give him the facts. Don't play on their emotional park is, it's not their money. And the employees don't complain to the controller. They complain to HR or they walk out the door. So don't go the field part. Show them the data.

John:               12:42 Okay, so, so let's switch over the CFO, CFO, when we're, when we're talking to a CFO and we're talking about savings, right? So we talked to a CEO, which you are, you know, you're an owner of a company as well.

John:               12:54 So, you know, Hey, I'm going to, let's look out five years. Let's look out 10 years, right? We're longterm planning. What does a CFO mind look like? Because you just gave me, the stat was a 30 months, 28 28 falling. There'll be 27 months. Then we talk a little over two years. I don't know if I'm going to be there for five years. That's right. I don't do I care about the five-year projection at 10-year projection? What do I care about today? Two years. What am I looking at as a CFO as far as.

Gary:               13:20 The answer is next quarter and next year, like five quarters is a lifetime. Rarely do you look to enters is an eternity. We're looking quarterly. As a CFO, we're looking at it on a quarterly basis. A lot of CFOs came out of the public corporation, world war. It is quarter to quarter.

Gary:               13:36 In a small business you're looking at a year or two max for a variety of reasons,

John:               13:42 So I want to, I want to look at my numbers and focus more on the short term so that leads to the problem. Ish. Short term gains means change, right? And no changes.

Gary:               13:54 Opportunity to change as a positive word and the CFO's going to understand that. Here's the app and I'd even suggest you use the word opportunity. Here's an opportunity to improve. If you're having trouble with retaining employees, if you're having trouble recruiting employees benefits or decision item, we've got a 1% unemployment market. You have to steal an employee from another company. Healthcare can be the tipping point and you've done it for our company. You know that, and that's not a compliment. You're once in this. We, we eliminated the, as you know, we saved enough money that in year two, the two owners of our company, we decided to eliminate deductibles for our employees and they were stunned and I had two industry-leading experts that I was trying to recruit for the last three years. My salary offers, my incentive offers were outstanding. What? Both of them came to me a month after. We eliminated deductibles and the marketplace knew it. They accepted the salary offer. I made them two years ago. I would have raised the salary offer. I would have raised the Ottawa islands. They both dealt with 12 to $15,000 family healthcare expenses in 2017 we made our change in 2018 and they joined us within a month.

John:               15:15 Yeah, it's a huge benefit. And we hit, I can't tell you in this tight labor market how many calls I get where employers are now asking me to talk to the recruits and sell them on the health land. And I said, it's interesting because health benefits, health insurance now is becoming what it was originated originally for was a benefit and employee benefit versus just an expense in something to deal with. So it's interesting. So let's go back to the CFO for a second. So we're thinking strategy. If I'm in a meeting, I'm going to talk to him about a short term gain. Nick, he can capture for himself. How do I convey that message in his terms or in his language? Like what is your thoughts as a CFO? Just give me some CFO talk.

Gary:               16:01 Okay. So we're talking about healthcare expense. It's fairly easy. I mean, all of the CFOs know their numbers inside and out. They know that healthcare benefits are probably their third largest expense on their cost stack and they can't change pricing in the marketplace. Their job is to manage the cost stack. So you know, that's one term in your cost deck for this year, for this year's budget, what's your total spend in healthcare? But more importantly, how significant is to the company. Okay, it's number three. Let's say it's $5 million a year. Use some easy numbers. And how much is it going up, John? And it's going up. Eight and a half percent. Your revenue going up? Eight and a half percent. Hell no. Is your labor costs going up? Eight and a half percent? No, it's about three revenue's gone up. Three or four. You know we're lucky to give salary increases in wage increases of 3% so why do you tolerate benefits going up eight and a half percent? So we just talked about revenues kept, you know probably your, your raw material, your technology costs going up, like three technology might be going down and yet you're seem to be satisfied other than the fact that I'm talking to you today about benefits going up eight and a half percent. What do you know? You want to talk about how to, how to change that curve. Do you want to talk about an inflection point? Because that's what we do for people.

John:               17:19 And you just talk, you were talking about managing I and I got ask to the million-dollar question, which we struggle to understand is why aren't more CFOs, controllers, owners, presidents, CEOs involved in not the just the decision, right? Not that one-hour meeting and saying, Hey, we're going to pick that plan. Why are they not involved in managing the healthcare budget like they in managing the safety programs regarding P and C property and casualty insurance.

Gary:               17:55 Because you guys have done a great job of not providing information during the year. We get an invoice. Let's take that $5 million example. We get an invoice for about $400,000 a month. We budget $5 million cause you told us to, you get a bill every month for $400,000 and by the way, you give us no information on claims and frequency of claims. And is it, are they accidental claims, annual physicals and mammographies the good maintenance best practices once a year. And I'll, I'll pick on your industry once a year, the brokers come, I will once a year the brokers come in and give us the gross numbers, no supporting detail and then treat us like mushrooms for 12 months. I you've heard this story before, let me define what I said 10 years ago. And my broker adviser, who I trusted and respected almost passed out when we had a lunch and we had a hundred employees there and it was the annual, your costs are going up, your copays are going up, your deductibles going up.

Gary:               19:00 So nobody in the room was happy. And I opened the meeting by saying, let me just set the stage for today's meeting. We do not have healthcare insurance. All of a sudden the pizza slices were set down and the chatter stopped and everybody said, what do you mean? Is it very simply, we pay these guys to pay claims on your, on our behalf and we pay them a profit margin and we give them all the cash upfront and if they need more, they raise our price next year. So basically they're our check payers. They don't care who you use, how much you eat and drink and don't exercise. In fact, they like when you eat and drink too much and exercise too little because then they can raise our prices next year. And the state allows them to earn a reserve. The state allows them to put an overhead factor on. The state, allows them to get a profit. So they're just really happy.

John:               19:48 Financing it for us. You know, you paying to finance it.

Gary:               19:51 And we're giving you a markup and a margin bookmaker, but we don't have insurance. We're just paying you to administrate our bad health habits. And everybody got it.

John:               20:01 So CFO's, CEO's, they're just not managing it because as Craig Craig would say, we trained them like elephants were elephant trainers. We've trained them to expect there's nothing. There was a poll. 81% of CFOs think there's absolutely nothing they can do to lower healthcare costs. So we've done a good job. It's a good answer. Brokers have done a good job of training them in that mindset.

Gary:               20:24 And not providing any information to allow them to, to challenge half

John:               20:29 Crucial depending on the market. Yeah. Yeah. But some of it's, the insurance companies don't allow it. Right? So listen, they've set up the game. They built a game and the games were on him. Well, okay. My next question.

Gary:               20:43 It's a trillion dollar industry.

John:               20:44 The next million dollar question is, you're not involved right now. You let a non P and L manager who has no, you know, that doesn't care about the budget. They get to manage this number two number three line item at your company. How does that make sense?

Gary:               21:06 They put you in a spot because.

John:               21:08 You guys do it. Well, I don't even in your groups.

Gary:               21:11 I don't.

John:               21:11 You know, you know we have these conversations. You don't, I never met with HR where you guys, but it happens over and over.

Gary:               21:19 Okay, so let me give you the statistics out of my groups in Pennsylvania, in New Jersey, and they're both about 45 financial execs titled CFOs and controllers. One third have the defined responsibility for HR. They have it. Okay, another third, approximately one third feel that if something goes wrong, they'll be held accountable but they don't have any responsibility to manage it. It's no man's land. It is the worst situation you can be in is to be held responsible but not be involved in the reviews, decisions, etc. That's those are the people that drive the 28-month curve because they're going to be held accountable by the CEO and board and they should be a $5 million expenditure. You need to inject yourself whether it's on your job description or not. A lot of people do not have my passive personality in it. That's sarcastic as hell because what's not on my job description and if it blows up, I'm in trouble and I'll make an excuse and I'll be walked out the door and they should be walked out the door.

Gary:               22:23 But that's part of the, I would weigh that issue with the CEO and the board of directors of MNO hold you responsible to managing our HR budget and being involved. And that's either from compliance and controls to healthcare costs to workers' comp and safety. You don't hold an executive or a manager responsible if they're really not responsible. But again, vinyl third H, excuse me, the final third HR reports to the CEO and finance controller. CFO knows nothing about us. So I just giving you the situation where the good CFO is going to be responsible, accountable and a large portion of them active in it and that's where you get to the 10 or 15% that are really engaged. You've got half of that one-third population that don't understand it, but their head in the sand. You guys take advantage of that. See them once a year, give them a few things, give them some media bogus trends, beat that look like a hero and you disappear for 10 or 11 months and you come back with good news or probably bad news, but it's going to be better than the trend. So you still a good guy, a good broker. They can use that excuse to the board until the board realizes, let's go do a third-party study. Let's do a comparison. I'm going to force you to bring two more brokers in and go through the process.

John:               23:39 So it's just, it's just again, elephant training. What will you train the HR to thing kept training the CFO to train the owner. Does the CFO sit and say, well, they report to the board or the CEO and say, well, you know, this is HR. Would they came back with as best we can do and want to keep themselves out of it because they know, Hey, this is a budget item that's just uncontrollable. I don't want to take the fall for it. Let HR manage it.

Gary:               24:03 Oh no. Fortunately, they actually invite HR, they invite HR to the board and HR is going to give the little apology, deliver the message, and they're going to lean back to them. You know, we looked at our brokers and here's the market trend, here's all the exogenous factors. They make all these excuses. Then they deliver, deliver a per cent in the trends going up nine, we ought to be happy. We got eight and we don't have to disrupt the employees and we'll squeeze a little more to the employees, but it's not as bad as it could have gotten screwed someplace else, so we're the lesser of both evils. Then they do a good job and then try it out of the room.

John:               24:36 Check the box and units. It's interesting as, I never thought of it that way until this conversation is like maybe they just don't want to be involved with it because they know it's an item they can't control and it's, I don't want to get fired.

Gary:               24:46 There's one more point to it. Most people in controllership or finance are not people people. They do not want people lined up at their desk, at their office door at eight o'clock why didn't the carrier cover this? Why is my deductible going up? Why isn't this test covered? They don't want to deal with people. They deal with numbers. Numbers don't push back. Even crappy numbers don't push back and cry in your office. We're not good at that stuff. HR is compassionate and they'll listen. They can't change. What if that test was covered, but they'll listen and be compassionate. Cfos are not. We had the compassion part removed.

John:               25:26 We always want to get the message. It's like make the decision and then let the operations team implement it. You know, I had a situation recently where it's like the CFO president, they're there. They love it, they want to move forward with it. They go back to corporate and HR just kills the deal. We can't implement it. I'm sorry. We get, we have to continue to lose millions of dollars because I don't have enough time to implement this. It's just, it's mind-boggling to me and yet they don't push back on the HR department. Why is that HR? Why is that they have so much power or control over this roles that or the CFO, even the owners bow to it.

Gary:               26:07 I'm as befuddled by that. That's why every place I've gone in the last 15 years, within weeks of me starting another role at another company, HR has reported to me, and you've heard me say it before, I never asked permission. When I had HR report to me, to CFO in some cases I didn't tell the CEO. All I told him is I'm making changes because it's broken and I'll tell you what the changes are that I've made

John:               26:33 Out of the norm. So I'm lucky. Let's you, let's switch gears here. Talk to me. I know you know when I got through to you is how do we prospect the CFO's, right? So harshly.

John:               26:44 I cold-called got happened to get you on the phone and got in, but what is the best way for us to convey a message from a marketing standpoint to a CFO, right? They don't want to talk to nobody. They sure as hell don't want to talk to an insurance broker. We don't. You're exactly right. I'm an odd duck. I answer my own phone and I also return calls. So I, that's the way I was raised. You're old school. I'm old school. That's the way I was raised. When people call you, they call for a message and I take the call in today's world and if you leave an intelligent message, I'll call you back or email you back. And today's world, they're hiding behind. People hide behind emails and pewter so they can avoid you. But more so how do I get, how do I get in front of these guys? How do I talk to them?

Gary:               27:24 Well, I think you know you, you've helped the CFOs in my group because I knew you were smarter than average. I knew you understood and can communicate to us. So you know, I'd say to any broker, find somebody that understands the CFO world and get in front of their groups. We do have CFO groups, they're rare. Cfos are generally introverted. Did rather be in the office and be out with 10 or 20 peers. Learning best practices. But there are opportunities. Podcasts, make it great. Webinars make it great sometimes that big egos, CFOs cause brokers do, cause I can get brokers you just ask them to for certain things they got ego. So you get them to CFOs. Do they want to be in the spotlight? No, they don't want to be in the spotlight, but they have egos. They have power and control, but they don't have egos.

Gary:               28:10 Okay. They do not want to be in. It's hard to get a testimonial from a CFO. You can save them $1 million, put them at the top of the upper court tile and you're lucky to get a testimonial. Sure. I know we we had some success. We had a real lot of success when we were in the happy hour. I said, Hey Gary, let's get these guys together. Cause they don't know each. It's funny, as you guys meet every month and I'll ask, Hey, do you know so-and-so in a group? They don't know him. And it's like, like you said, they're super introverts, but soon as we did that happier boy CFOs like to drink as well. Sure. And it was a good time. We got a lot of people together in a room. Had a good time. We'll do it again in about six weeks. We don't have meetings in December.

Gary:               28:53 In July we make sure we have happy hours in those months. The interesting part is I'm always stunned. 45 people that had been together 10 or more times a year. Don't realize they've got a customer or a supplier in the room. They don't. Yeah. It's like, well, I'm in a man. I'm in mastermind groups. We all know each other. We would do business if we weren't in the same industry. Well, actually my newer mastermind is marketing and we do, I've already done business with the guys. It's like, why wouldn't you do business there first? And especially in that local market, I'll get it, but I think we need to do, you got to do more happy hour for sure. Yeah, and we, we've changed our process or our, our agendas to drive more conversation. I bring in subject matter experts on the topic every month. And for the folks watching this, I let the participants pick the topics, what's keeping you up at night? What are you struggling with? And we go find the experts to address those challenges. And sometimes it's tough to find the experts cause we do have some problems. What I've found is that by by tailoring the vignettes and forcing success stories and failure stories by this CFO's, we find out that collectively we probably have as many best practices as our speaker has. And it's just hard to get CFOs to share success stories and really hard to success. You know, we're learning experiences, call them failures.

John:               30:16 How do, how do you get these guys in a room, right? So we have these events, you know, we do a marketing event, Hey, let's, you know we're going to talk about healthcare. It's hard to get CFOs to show up. You've had a lot of success. I have to believe it's because you're a peer, you're not a threat to them. They know, like, and trust you. If a broker's going to look to start something like this up, obviously I have to assume they need to get a strong CFO Kleiner there is to get it going. They help facilitate it, market it and host these events and do all the work. That makes sense.

Gary:               30:45 Don't make it a selling event. You're there to make people aware. The reason we've been successful is that our job is to share best practices and make CFOs aware. There's a handful of best practices your peers are doing. We generally have five or six or seven best practices on any topic, whether it's real estate or facilities or leasing or a fleet, whatever. Maybe two of those are are possible solutions for your situation. Seven will never be. Most of our CFOs are doing one or two or three of those best practices already or they wouldn't be there more than 28 months to be honest with you. But if you can find one or two pearls, you know in the bucket of rocks that makes all the difference in the world.

John:               31:30 Okay. Brokers, let's talk about brokers. What are brokers doing wrong? You've been in the meetings. What are we doing wrong in those meetings? Or we're talking to the CFO, the CEO.

Gary:               31:42 I'll go back to the first thing I said is use their facts. Use history. Because your forecast, like any like my forecast, your forecast stink. You're not gonna know if we're going to have the catastrophic claim, you're not going to know if all of a sudden we have 10 people that need Harvoni and our prescription costs go through the roof. Those are all exceptions and we can always explain the exceptions. Why don't you just stick to the facts of history? Let's look at the last three years. You have your data. By the way, I have access to your data up to 55 hundreds I come in here reasonably well educated. I have your data. It is your data, okay? If you want to share it and validate it, but it's pretty good data. Okay? And I can show you Dino's sector information companies your size in your locale, so I'm not going to use hocus pocus national averages that nobody can relate to.

Gary:               32:31 I'll use data for your sector in New Jersey because New Jersey has its own unique insurance situations and regulations. Then they kind of hamper small companies deal with history. Cause as soon as you go forward you're going to be accused of twisting facts. So use the facts, not the forecast. Got it. What? When we relate really well to it, everybody knows their last three years of earnings or last three years of revenue growth there. Last they'd given two and a half or 3% salary increases. You have it. Healthcare went up eight, nine and 8% and by the way the sector went up five.

John:               33:04 If I shine the light on the bad stuff, the history of, you know, what did it go up a couple of years? What did you do? Did you shave costs? You do this? Am I highlighting and kind of insulting them in a way?

Gary:               33:16 No, you're making them aware. Don't inside to let, let me, let's, I'll, I'll do exactly what you did for our group is it's the only line item that you don't understand. Every nickel of every dollar spent. I understand waiver and overtime and promotions and job eliminations. I understand labor perfectly. I understand my raw material and my scrap rate in my utilization, I don't even know what makes up my $5 million. It was a year that was $4 million two years ago. So let's go look at what we can glean from the reports you have in front of you. And let me give you some guidance as to what are the four or five categories that make it up. And when you start to tell me prescription costs are going up 25% per year, this is going up 15% per year. And by the way, your annual cost of physicals is going up two or three don't beat up the local GP doc. Don't be, you know, you can beat up the emergency room if your emergency room utilization has gone up. You can get some of that information or you can have them get some of that information. But we don't understand that, that the components of the cost stack and you've done us a great favor by showing us the four or five categories and the two or three we have to watch.

John:               34:29 Yeah, that was eye-opening to people. Yeah. It's just managing it and putting into their terms. What's your as we wrap up here, what's your final tips? Any final tips for brokers?

Gary:               34:39 I would, I'll use this term that I just use with my CFOs. In fact, I'll give you two closing points. We call this fall, we call it autumn. I call it the season of insanity. We're about to go through renewals and you're going to expect a different outcome by doing exactly the same which you've done for the last five years with the same broker. I think you have to understand your information, you have to define your goals and you have to find a broker who wants to help you achieve your goals, which means the goals of the broker, the adviser have to be aligned with the client. And generally, brokers who worked for large firms that are getting compensated six ways from Sunday are not going to be aligned with lowering your cost and lowering your premiums. Their job is to have you up six or 7% versus a phony market trend of eight.

Gary:               35:32 Okay? Remember a couple of minutes ago we talked about, let's look at history. We've always heard is going up seven or 8% you know, trend hasn't gone up seven or 8% there was a forecast and it was forgotten. Nobody measured against it. We had your minds sitting at six or 7% is better than the trend. What if trend really went up five or 6% and you were at 6% or 7% it's like, well, he never told me that. That actually there are people out in the marketplace below trend. Of course, there is no drift. They're moving trend. There's inflection points in trend. The lines changed. Brokers never going to tell you that he's already got you convinced 8% you're lucky to get a percent you ought to thank me.

John:               36:12 Where can they find you if they want to reach out to you? See what you're doing.

Gary:               36:15 www.ThecfoSolution.org. My phone number's on there. Like I said, I return emails and phone calls.

John:               36:22 Gary Bender, ladies and gentlemen, thanks so much for joining us, man. We look forward to having you on again.