April 10, 2024 • 34 mins
Join Dallas Clement, President and Chief Financial Officer of legendary Cox Enterprises, as he shares invaluable insights into his career journey, financial leadership, and how Cox's foundational values have been a beacon of success for 125+ years.
With over three decades of experience, Dallas emphasizes the importance of balancing culture, learning, and growth in any financial professional’s career trajectory. He also delves into Cox's ethos of embracing risk and innovation, even if it means competing with themselves, to stay ahead of technology and trends.
We were thrilled to have host Andrew Seski on-site at the wonderful Cox campus in Atlanta to record this episode, and we are grateful for Dallas’ contribution to the CFO conversation.
Tune in for a thought-provoking discussion on leadership, strategic vision, and the enduring legacy of Cox Enterprises.
Show Links
- Connect with Dallas Clement on LinkedIn
- Connect with Andrew Seski on LinkedIn
- Learn more about Cox Enterprises
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:08):
Hello, and welcome back to another episode of the
Modern CFO podcast. As always,I'm your host, Andrew Suske.
Today, I'm thrilled to be joinedby Dallas Clement, president and
CFO of Cox Enterprises. Dallas,thank you so much for hosting
here in Atlanta. I'm reallyexcited for the conversation
today.
Speaker 2 (00:23):
Andrew, thanks for coming down. Appreciate it. It's
a rainy day here in Atlanta. Weappreciate you traveling and,
going to visit with us.
Speaker 1 (00:30):
Well, it's an incredible campus, and just the
energy of the environment, it'sbeen really fun to be here.
Speaker 2 (00:35):
Today's employee appreciation day. So we have, on
a Friday, we have a number offolks here, and our employees
are so important to us. So youcame on a good day.
Speaker 1 (00:43):
I wanna kick off this episode by talking about some of
your early career decisions andwhat you were most passionate
about in media and what led youto Cox initially.
Speaker 2 (00:51):
Sure. Happy to do that. So I was born in Florida.
My dad was a doctor. I had nonotion as to what business was.
I majored in math, so, again, nonotion of business. And I went
to Harvard, and lots of folks atthat time left and went into
consulting or investmentbanking. I went to investment
banking. That's where I reallylearned aspects of finance, but
(01:12):
I didn't like the environment.And so I went to graduate
school, went went out toStanford, and got a degree in
engineering economic systems,which is like industrial
engineering.
And afterwards I said, don'twant to go to consulting, don't
want to go to investmentbanking, want to work for a
company. And the kinds ofcompanies I liked had some
technology, some sort ofinteresting business model. I
(01:33):
was particularly focused onmedia and communications and
sent back then, there wasn't theInternet, so I sent resumes out.
And I, also happened to send aresume to a search firm. And
through that search firm, I gotconnected to Cox and landed here
just shy
Speaker 1 (01:47):
of 34 years ago. So when you were first, introduced
to Cox, did you know how largeof an enterprise it would be?
Some of the CFOs I talked to,they go into the big four
consultants to get a lot ofdifferent types of exposure.
But, as a company that's thisbig, there are so many moving
pieces. Did you know that goingin?
Speaker 2 (02:07):
I did not I wasn't aware of Cox at all when I
started, and Cox is was a lotsmaller then in 1990. I think it
was about 1,800,000,000 inrevenue. Today, we're about
23,000,000,000 in revenue. Atthat time, the biggest
businesses were radio stations,television stations, newspapers.
And in the local markets whereCox operated, they were all
(02:28):
branded the call letters of theradio stations and then and then
the television stations or thename of the newspaper.
So the Cox brand wasn't out, soI had no knowledge as to Cox at
all. The only business that wasbranded Cox was Cox Cable back
then, but I wasn't in any CoxCable markets, so I had no
exposure.
Speaker 1 (02:45):
Who are some of the influences you had early on at
the company that influenced thelongevity of your tenure here?
Speaker 2 (02:51):
I because you navigate a career, you're always
trying to balance the peopleyou're working with, the
culture, the opportunity forlearning and for growth. Are you
having fun? And I, like like Ithink many people, tried to
evaluate as best I could all ofthose early on. I think it was
the overarching culture of Coxthat was established back from
(03:13):
the founding a 125 years agothat was a contributor. I also
really enjoyed the people in thecable group.
I started in the cable groupaccording to Jimmy Hayes, the
CFO at the time, and reallyenjoyed working with him. And I
worked very closely with thehead of the cable group, Jim
Robbins. At every turn, theygave me opportunities. They
trusted me. And so I was exposedto a number of things early on
(03:37):
and had fun and was learning.
And at every chance where theremight have been a decision to
leave, I made the decision tostay.
Speaker 1 (03:45):
Wanna talk about how the business continues to
evolve. Recently, there is somemajor news around, multibillion
dollar acquisition, and it'sinteresting to see the continued
passion and diversification ofdifferent, areas of the
business. What were thedifferent focuses over the last
few decades that you've seenhave been successful in terms of
(04:07):
diversifying the focuses of thebusiness?
Speaker 2 (04:09):
So as I said, last year, we had our 100 and 25th
anniversary. And what'sinteresting is I went back and
looked at what the businesslooked like in 1985. And in
1985, the traditional mediabusiness was television, radio,
and newspapers, and that wasabout a $1,000,000,000 in
revenue. Cable was about a100,000,000 in revenue, and
(04:32):
Manheim was about a 100,000,000,200,000,000 in in revenue. And
newspapers was the largestportion of the media business in
1985, represented over half ofthat $1,000,000,000.
The business has, transitionedand transformed many times over
the last 100 and 25 years. Andpart of our paradigm is we're
(04:54):
willing to take risks on newtechnologies, new business
models, even if it competes withourselves. We don't develop new
technologies. We'll embracetechnologies. We also will not
take undue risk on leverage infinancial engineering.
And so early on, the company iswilling to go from newspapers
into radio, one of the firstplayers in radio, one of the
first players in the broadcasttelevision, one of the first
(05:15):
players into cable, and then gotinto automotive because in our
media businesses, the largestlocal advertisers typically were
automotive. So we were familiarwith automotive, and we had an
interest in Black Book and sogot into Manheim Auctions in the
19 sixties. Fast forward to thestart of the Internet, and the
newspaper group realizedclassifieds were gonna go away.
And so who better to start anonline automotive classifieds
(05:39):
than Cox? Because we hadManheim.
We knew classifieds, so westarted Auto Trader just after
the formation of the Internet.Within the cable group, when I
started in 1990, all we offeredwas analog video. And as
technology evolved and westarted introducing fiber into
the network and startedactivating the return path so
that signals could go from thehouse up into the network, We
(06:02):
started offering telephoneservice, digital video service,
and then, broadband Internetservice, and those businesses
exploded. And what I like to sayis they started birthing their
own children. So on the videoside, you had high definition.
You had DVR. You had video ondemand at interactive program
guide. On the data side, you haddifferent speed tiers. You had
(06:22):
your home page. You had homenetwork, like, home networking.
On the voice side, you startedwith circuit switch, then it
moved to voice over IP. And forall of these, we can serve not
only residential, but alsocommercial. And so that business
saw so many differentopportunities for organic. Cox
is willing to embrace thateffect. Early on, we were the
(06:43):
first to embrace offeringresidential telephone to our
customers and and a lot of ourpeers, all of us.
So it's been a huge transitionand transformation. And what we
typically have done is we takethe cash from the business to
generate. We invest in our corebusinesses to keep them relevant
and competitive in the marketsthey serve. We invest in
adjacencies to those, and thoseadjacent investments can be
(07:06):
organic or inorganic. But welike adjacencies because we can
leverage the machine of the corebusiness, the network, the
employees, the customers, themachine, and that will derisk
and hopefully enhance thelikelihood of success of an
adjacency.
So as an example, an adjacencyin cable might be getting into
wireless, getting intocommercial services, and so
(07:28):
we're doing all of those. ForCox Automotive, an adjacency
might be trying to addresswhat's happening in the EV
market and being a large playerin the EV market, helping
maintain large fleets and thingslike that. So we're we're
looking at that. But over time,we've also said we need to plant
seeds in diversification, andyou asked about open gov. And so
(07:49):
we try to be as smart as we can,and and we recognize what we're
good at, what we're not good at.
We don't develop newtechnologies. We embrace
technologies. And so ourstrategy team looks at a variety
of areas and says, hey. Whichsegments of the overall economy
are embracing technology? Isthere likely the dislocation
(08:11):
happening?
Opportunities for us to getinvolved, opportunities for the
long term because we alwaysthink long term. And we develop
a thesis. We test that thesis.We go talk to folks. We
participate in conferences.
We talk to players, managementteams, venture capital, private
equity. We try to figure out whothe best players are within that
(08:32):
strategic segment that we'vethat we have targeted, and then
we go see if we can get involvedand if we can invest or acquire,
etcetera. And OpenDev is anexample of public sector
software, which was the thesis,and we talked to a bunch of
folks. And we liked what OpenGovwas doing. Lots of cities and
municipalities, as they startedto embrace technology 10, 20
(08:53):
years ago, a lot of theirtechnology is on premise, and
they've been very slow to moveto digital and supporting mobile
apps or moving to the cloud orembracing AI.
And Opendove started 12 yearsago as a cloud based SaaS
company, and that makes it a loteasier for cities and
municipalities to provide totheir constituents the latest
(09:17):
and greatest. So 3 years ago, wegot involved by making a small
investment in a company. Andthen 2 years later or a year
later, the infrastructure billhappened, and OpenGov realized
they didn't have an assetmanagement module that was
robust enough to meet the needsfor cities and municipalities,
(09:37):
but they were aware of a companycalled Particle that had a
wonderful cloud based SaaS assetmanagement module, and the
existing investors weren't readyto underwrite that investment.
We said, we love it. We'llpartner with you open gov to go
acquire that business, and thatincreased our ownership stake in
open gov and allowed us to workand see even more what Opendhub
(09:59):
does.
And and when we do thesediversification investments, we
really we look for the thetailwinds, but we also wanna
make sure we trust theleadership. Leadership is so
important in those businessesand in all of our businesses,
and we really appreciate andrespect Zach Bookman and what
he's done and his vision for thefuture. And so we were excited
when, quite frankly, heintimated, hey. It might make
(10:22):
sense for us to work moreclosely together going forward,
and we were able to come toterms on something that worked
well for us, worked well forhim, and worked well for the
prior shareholders.
Speaker 1 (10:32):
How do you think others can take the model that
you're explaining around patientlong term focus when their
public company CFOs have toanswer to shareholders and these
adjacencies are less obvious?What would you tell, other CFOs
who are trying to communicate,all of the new potential
adjacencies that either AI isunlocking or that are newly
(10:52):
available to them?
Speaker 2 (10:53):
Over the course of the last 34 years, I've
recognized that there's 2different flavors of CFO.
There's a CFO that is morecontroller type, CPA oriented,
and then there's a CFO that'smore strategic. As I said
earlier, I was a MAP major. Idon't have a CPA. That's not my
focus.
I have folks on my team who haveCPA and make sure we get our
numbers straight. I'm morestrategic and more critical
(11:17):
thinking, and I think what theCFO can do is help the team,
help the CEO understand what areoptions available for growth in
organic, inorganic. Given thosepossibilities, how do you
prioritize given the balancesheet of priorities? And make
sure the story is consistent andyou're setting yourself up well
(11:38):
for success. Whether you'republic or private, you wanna
make sure you have a good story.
And then depending on how farthe adjacency is, it may make
sense, like we do, even ifyou're public, not to take a
huge bite and introduce morerisk, but maybe take a small
bite along the way. And youalways, as CFO or capital
allocator, wanna appreciate andunderstand the upside, but also
(12:01):
make sure you're balancing therisk and the downside as best
you can.
Speaker 1 (12:05):
How does the family business world impact your
relationship with the company?Does it provide a unique
culture? What kind of dynamicdoes it add to the business?
Speaker 2 (12:14):
As you said, Cox is private. It was started by James
Cox a 125 years ago. It'sremained in the family for those
entire 125 years. It's still a100% owned by by the family.
What I would say is the valueshave been consistent from day 1.
And in the governor's will, hesaid, do right by the employees,
your customers, do right by thecommunities that serve in the
(12:36):
family, the shareholders will befine. And and that that that
value set is pervasive acrossand creates a really strong
foundation. Every business,depending on where it is in the
life cycle, its competitiveneeds, etcetera, has a different
culture, but all based on thatfoundation. And so when you can
(12:56):
go back and look at instanceshistorically and my boss, Alex
Taylor, who's 4th generation, isa student of the history of the
company and the family. When youreach a fork in the road now,
you can go back and look at,analogous cases as to, how the
family decision makers back thennavigated those choices, and
(13:17):
everything turned out alright.
And so you can get morecomfortable on decisions you're
thinking for the long term andand trying to do what's right
and having confidence that it'sgonna turn out alright.
Speaker 1 (13:27):
Talking about patient long term focus, what's most
exciting to you in the businesslooking out 3 to 5 years?
Speaker 2 (13:34):
When Alex Taylor came in, he wanted to be very long
term oriented. And focused onfuture focused 2030, which is
want to grow, to show up wellfor all of our stakeholders by
2,034. What I get excited aboutand he he would love to have 3,
4 huge businesses in 2034 thatare generating a lot of revenue
(13:56):
and growing dynamic andoperating businesses, and I
completely respect that. I'mtrying to figure out how to
navigate from where we are tothere. And the way I think about
it to manage risks and tooptimize opportunities is
managing a portfolio of options.
And so I would like to thinkthat my job over the next couple
(14:18):
of years is continue to investin our core businesses. I find
adjacencies to help thosebusinesses transform and be
competitive and relevant andgrowing, but also plant seeds in
a variety of companies. And forthose companies, we'll have a
100% ownership and some willhave less than a 100% ownership.
And and so we'll have more andmore of those over the next 3 to
(14:39):
4 years pursuant to thestrategy. And as we move out of
10 years, I hope to have aportfolio and be making
decisions on capital allocationon where we wanna put more
capital and where we might makehard decisions to pull back.
And we do make hard decisions.And in 2019, we made the hard
decision to sell our radio andtelevision business. And
(15:00):
sometimes in any good garden tomanage for the long term, you
have to print. And so we'll makethose decisions. We don't take
we don't take them lightlybecause it impacts people.
And lots of these businesses arehave been part of our history
for a long time.
Speaker 1 (15:14):
I think it's a unique advantage as you mentioned
earlier to be able to look backin time as to how decisions were
made either culturally or justfinancially. Do you have any
advice for folks who arenavigating global instability
and, macroeconomic situationthat feels more volatile for the
first time.
Speaker 2 (15:30):
What's interesting, I was just looking at CNBC and the
Fed president from Richmond, TomBarkin, was on talking about how
productivity is pitching up. Hemade the comment that he looked
back to just the 1st year beforeCOVID, and he compared to now.
It's clicked up a little bit,but it it it's not the same
trajectory as you look at lastyear, this year, 22 to this
year. I think the point beingthat we have all managed through
(15:56):
a lot of crazy change andvolatility since we went home
for COVID in March of 20. Andand I think the lesson learned
is always trying to do the rightthing, managing the risk, making
sure you understand what are theexistential risks, and what do
you do to minimize those.
Be very smart about the risksyou're intentionally taking, and
(16:19):
let them play out and be patientand be balanced. And I think if
you have a long term mindset,you understand the downside
risk, you make calculatedinvestments for the future.
They're not all gonna be right,but we certainly had some that
haven't turned out right. But ifyou do the best, yeah, then you
just trust the process, trustthe team.
Speaker 1 (16:38):
Speaking of the pandemic and all of that change,
did you learn anything uniqueabout either your relationship
with work or culture of thecompany?
Speaker 2 (16:46):
Well, cultural company, I didn't learn anything
new because I knew we would dothe right thing for our
employees to keep them safe. Ihad never done a Zoom call or a
Teams call prior to COVID, so Ithink all of us learned that. I
think well, I'm very proud thatwe showed up for our customers,
for our employees. I'm veryproud how the team showed up to
(17:09):
manage our expenses at that timebecause we did have some revenue
impact because especially,automotive things were closed
down, etcetera. I I I think wehave learned that we are
resilient and a little bit not asurprise.
We've been around a 125 years,but the last 4 years have been a
lot of change. And I think we'revery confident and happy with
(17:33):
how resilient we are and how weshowed up for our customers. So
in the case of Cox Automotive,when things shut down,
dealerships shut down and whileour customers were earning no
revenue. And so we went to themand said, okay. So as not to
have you churn off our softwareservices, We will cut the the
(17:53):
rate in half for the time beinguntil you open up and get your
feet going.
And the market reallyappreciated what we did to try
to find that middle ground withour customers, and I'm really
proud that we showed up. And itreally has underscored our
relationship with our customersand our employees.
Speaker 1 (18:09):
Josh, I'd love to learn more about the role of
sustainability at CoxEnterprises and how it's evolved
over history
Speaker 2 (18:15):
Sure. Sure. So as I've shared before in the
governor's will, he said doright by the communities that
you serve. And Jim Kennedy, whowas CEO for a number of years,
3rd generation family, AlexTaylor, who's CEO now, 4th
generation. Both are bigoutdoorsmen and so very focused
on the environment.
And Jim Kennedy started CoxConservers about 15 years ago,
(18:37):
and Cox Conservers' mandate washow can we make our businesses
more sustainable. Early on, itwas focused on carbon. Over
time, it's evolved to water andwaste, and we've had big goals.
In in fact, we are celebrating 0waste to landfill coming up here
next in the next couple ofmonths. And so we've been
working diligently, across allour businesses to reduce the
(19:01):
carbon footprint, look for greensources of energy, take
advantage of solar, where andhow it makes sense, etcetera.
We have a team that's about 30to 40 people that report up into
me that have been very focusedon that. About 5 years ago, Alex
Taylor said, gosh. Can we punchabove our weight? Can we do more
(19:22):
in that fine businesses where wecan really drive a larger impact
versus just our operatingbusinesses. Can we own
businesses that do the same?
So we started about 5 years ago.Similar to our whole
diversification, developing athesis around different segments
within clean tech andsustainability, and then having
(19:43):
conversations, deciding whereare interesting areas. And so
today, we have a big focus oncontrolled environment
agriculture bought a companycalled Mooji that does fine
crops in greenhouses, nextgeneration greenhouses, and a
company called BrightFarms thatis doing next generation
greenhouses for leafy greens. Infact, this year, we'll be
(20:04):
opening up 3 next generationleafy green greenhouses to
support the United States. Andwhat's so nice about that is
right now, leafy greens that weeat in Atlanta probably come
from California, and Californiais either in drought or too much
water.
So a lot of it is ruined. Andthen once it's picked, it's
gotta be transported all the wayto to Atlanta. One of the
(20:26):
greenhouses we're gonna beopening up is down in Macon,
South Georgia. And so it'll gethere, more quickly. It'll take
less time.
It'll be fresher. It stays onthe shelves longer. It's a win
win for the environment, forgrocery stores, retailers, and
for retailers' customers. Sowe're excited about that
opportunity in controlledenvironment agriculture. We also
(20:48):
happened on a plastics recyclingbusiness using pyrolysis and
called Nexus Circular, and wehave been supporting that
business for a number of years.
We're in the process now ofvalidating a generation 3
reactor and process to take hardto recycle plastics, so not the
Dasani bottles, the Coke Dasanibottles, which are easier to
(21:11):
recycle, but film, grocery bags,things like that are harder to
recycle and using paralysis tointensely no oxygen to melt down
to the base oil that can go backin a circular economy into the
crackers to create new plastics,and we're excited about that. We
also made an investment in asolar company that helps
(21:34):
businesses and helps,communities build solar and
finance solar, something calledBSD, and so we're a minority
investor in that business. Sowe're very excited about it.
It's an important part. It'svery much aligned with our
values.
Speaker 1 (21:47):
One of my favorite parts of every podcast that I do
is I ask, what's one thing thatyou feel is just underestimated
in the world today? And itdoesn't have to be business
related, and I just think it's afun opportunity to highlight the
unique vantage point of CFOsthat I speak with.
Speaker 2 (22:01):
It's interesting. I guess what I would say to that
answer, I think people continueto underappreciate that everyone
comes to a conversation indifferent context, and people
don't take enough time to levelset on the context they have,
their history, their perspectiveversus what you may come to the
table with. And if you spend thetime time listening, asking
(22:22):
probing questions, openingquestions, communicating, I just
know people tend to be veryreasonable. So what I would say
is it's just good old fashionedcommunication.
Speaker 1 (22:33):
Yeah. I really like that. I often say people should
hit that back button whenthey're listening to Mhmm.
Listen to something again. Iwould definitely recommend it.
That's a great answer. Thanksfor sharing that. One thing I
was really excited to talk toyou about today is some of the
frameworks and playbooks. Youmentioned the hypothesis testing
strategy of diversifyinginvestments, whether total
acquisitions or smallerinvestments. Are there other
(22:54):
playbooks or frameworks thatyou've seen other CFOs adopt
that work really well?
Speaker 2 (22:58):
A comment I always make is that I'm happy to copy
paste. If someone else is doingsomething really well and it's
working well for them, there'sno reason not to bring it in to
what's a Cox and copy paste. SoI'm always looking for good
ideas and good thinking. I can'tthink off the top of my head of
someone that I have done thatwith, but it's just an ongoing
perspective. What I can tell youis that you have to evolve and
(23:22):
you have to be open minded.
And in every conversation, Itake something something away,
and I'll give you an example.I've been in a company 34 years,
and I've been involved in avariety of investments. And when
I was cable division, I realizedthat if you make a $2,000,000
investment or a $5,000,000investment into a business,
there's a certain amount of workto be done. And and let's say it
(23:42):
gets the 10 x return on thatinvestment. For a venture firm,
that's a huge home run.
For a company our size, a 10 xreturn on a 5,000,000
investment, that's $50,000,000.It doesn't move the needle for
us. And so I was very negativeon doing those early stage
investments. Fast forward totoday, I do think technology is
(24:04):
evolving more quickly now. Andyou can get McKinsey or another
consulting firm to give you aprimer on artificial
intelligence as an example,which you really won't know or
appreciate how it's going todisrupt your business, other
businesses, unless you see howthe early stage companies are
actually using it and actuallydisrupting.
And so we started a fund here toinvest in those early stage
(24:28):
businesses. It's called SocionVentures. And we started key is
to get exposure to have earlystage companies are actually
using the latest and greatesttechnology to disrupt. What I've
noticed in the market is a lotof venture firms and early stage
firms start with a venture firm,and then they realize, gosh.
I've got 10 businesses in thefirm.
2 of them are doing really well.I don't wanna let them go out of
(24:52):
here, and so they start anopportunity fund. So when they
start the opportunity fund, theyfocus on those top 2 out of
their venture fund. And so ifyou're not in the cap structure
early on, you may never have achance to to to talk to the
company or or be invested. So byby having the associate and
fund, we're in the conversation,might even be in the cap
structure, increases thelikelihood that we'll be invited
(25:14):
to the table and help with ourstrategy.
And then the last thing I wouldsay is we try to look for
opportunities for our teammatesto get involved with these to
either be either mentor or be onthe board, etcetera. And it just
allows people in a varietyaspects, Cox, to be exposed to
this, disruption, thisinnovation, and hopefully bring
(25:35):
new ideas to what they do everyday.
Speaker 1 (25:37):
Outside of the formal process of hiring at McKinsey,
where do you go for yourcontinuous learning? Either
reading or talking to these newinvestment teams or these
younger portfolio companies.What's an example of somewhere
you go for new information?
Speaker 2 (25:51):
I wouldn't say that there's a particular place. As
you might guess, a companythat's as large as we are, as
diverse as we are, we have avariety of relationships. And so
I'm always meeting with externalfolks. And and in each of those
conversations, it's what arethey doing to help us, and how
(26:11):
can I help that relationship bemore effective? But in those
conversations, I always askthem, hey.
What are other folks doing, andwhat are you what are you doing?
What are you seeing? And thatincreases my intelligence and
and and my awareness. That'spart of my learning process.
I'll also when I talk to leadershere let's take the tax
department as an example.
(26:32):
It used to be the best leaderswere were the operating p and l
leaders, and and I'm I'm tryingto move away from I think
leadership can come anywhere.And I think even a tax leader
can be, quote, a p and l leaderbecause, number 1, they they
have to execute on their team,find good talent, and plan for
(26:53):
succession. To they have tooptimize the structure so that
we can optimize our taxes, andthey should always understand
what's happening in the externalmarket about how efficient are
they as a tax department for a$23,000,000,000 revenue company,
but, also, what are bestpractices? What are others doing
in terms of embracingtechnology, etcetera? As an
(27:16):
example, again, within taxdepartment was the first
department, about 7, 8 yearsago, really leaning in on RPA
within our organization.
And so I believe innovation canhappen anywhere, and I really
hold our leaders accountable forbeing the expert in their
domain. And expertise isn't justexecuting internally. It's also
being aware of what's happeningexternally. And so every time I
(27:37):
talk to our leaders, I learnsomething new about what's
happening in innovation, what'shappening externally in their
particular area, and that helpsmy learning. And then I, like
lots of leaders, read papers,read journals.
There's lots of digitalnewsletters, including Axios,
which we which we own, and and Iget smarter every time I read
(27:58):
those stories. And so it's atapestry of a variety of places
where I I get more shoes oflearning.
Speaker 1 (28:06):
Do you have any advice for aspiring CFOs?
Speaker 2 (28:08):
If you look at the CFOs or automotive CFOs of of
our cable business and and thenmyself, the way to, at least in
our organization, become a CFOis over the course of your
career, not think about thecareer ladder. Think about the
career jungle gym. And so don'tbe afraid to take laterals.
Don't be afraid to move into adifferent business. Don't be
(28:30):
afraid to move into a differentdiscipline.
Because every time you do that,you are exposed and experiment
different leadership, adifferent dynamic, a different
different challenges, differentopportunities, and that all
becomes part of your skill set,part of your portfolio such that
you're better prepared in thesehigher tier leadership positions
to think critically, to thinklong term, to think about the
(28:52):
risks. Yeah. These are theaspects I talked about before.
And if you've seen them in avariety of places, you better
appreciate all of thepossibilities in these key,
decisions, in the leadershiproles.
Speaker 1 (29:05):
What's an example of a time that you went through
adversity through your career oran example of a major win, and
did they have any overlaps?
Speaker 2 (29:13):
What's interesting, that question is a little bit
different than the question Itypically get from folks in
internally, which is what keepsyou up at night? And my answer
is always I have 4 daughters.And the reason I say that is I
try my best to have really goodteammates, good leaders, and I
trust them. And we engage. Andit doesn't mean they're gonna
make every decision correctly.
(29:35):
It doesn't mean every decisionwill be a success. But over the
long term, if you trust yourleaders and you have good
leaders, everything's gonna beall alright. So I I don't spend,
relative to work, lots ofsleepless nights. Your question
was a little bit different. Andas I think, I I spent 20 years
in our cable group, the first 10finance oriented positions, the
next 10 product and strategyoriented positions, and then 5
(29:59):
in automotive and now 9 in CoxEnterprises.
And if you say, okay. What's therole that I learned a lot and
grew a lot? I I would say whenCox Communications went public
in 95, we had a decision tomake. Do we hire someone
externally who knows investorrelations that doesn't know the
management team, the culture, orthe strategy, or you have
someone internally who knowsthose and teach them investor
(30:22):
relations. And and so I was theMikey of Cox.
Let's get Dallas to do it. It'lldo anything. And so I was thrust
into investor relations land andand picked up coverage on 26
with 26 different sell sideanalysts, helped our CEO and CFO
pull together presentations,manage conferences, etcetera. I
learned so much. In that role,you can be a traffic cop and
(30:44):
hand off questions to theresident expert, or you can,
over time, start to take thosequestions on your own because
you've been you've been in it.
And if you exercise yourcritical thinking, your
communication skills, you askquestions of the resident
expert, and you understand it.Once you understand it, you're
gonna understand it better thanthe sell side analyst calling
you, and you can start to dothat. And so I became a valued
(31:07):
partner to our shareholders andthe analysts, and I learned a
lot. Back to what I said before,learn how to communicate, learn
how to influence without givingthe exact answer. Because in the
world of financial disclosure,you can't give the exact answer,
but you can talk about the riskthat someone has who's
overthinking where you're gonnaend up or the opportunities
(31:29):
someone may have missed ifthey're underappreciating where
you think you're gonna end up.
So that was a really valuablerole for me in in my sort of
transition. And then the rolethat was challenged for me was
also our cable group, and we'relaunching wireless today. We
tried to launch wireless severaltimes. And in the mid 2000s, I
(31:51):
was responsible for wireless.And it was hard for a lot of
reasons.
Number 1, it was a difficultrelationship with our CIO at the
time, and he and he and his teamwere developing the billing
platform for our wirelessoffering. And it wasn't on
track, And fingers were pointingin multiple different
(32:11):
directions, and and that washard. And I wasn't necessarily
an expert in it. And so tryingto figure out what questions am
I not asking, how can Icommunicate, etcetera, that was
hard? As we were looking to getinto wireless, the iPhone
launched and we didn't haveaccess to the iPhone and so all
of a sudden it caused you tosecond guess your strategy about
(32:33):
getting into wireless becauseyou sorta had a feel that this
iPhone thing is gonna becritically important for new
wireless customers, and wedidn't have access to it.
That was probably the hardestsituation in my 34 years. I've
got this really uniqueopportunity to
Speaker 1 (32:47):
be here today on employee appreciation day. For
people who are interested inmore about the culture of Cox,
where should they go to learnmore about the company, the
history? And because of all thedifferent divisions, I'm sure
you're actively hiring most ofthe time.
Speaker 2 (33:01):
We have a website, so you can always go to the
website, and that, does a reallygood job of sharing a bit of our
history, sharing a bit of whatwe're doing. Websites, no matter
how dynamic they are, they maynot fully embrace the culture. I
think in terms of the culture,someone's really interested.
They gotta come on campus, andthey gotta visit with folks. And
we're always happy to talk tofolks and visit.
(33:24):
Yes. You're right. We arehiring, and those positions are
publicly available, and peoplecan look at our website and get
and link to the the jobopportunities and look at those
and always happy to get resumesfrom great qualified folks.
Excellent.
Speaker 1 (33:38):
Well, thank you so much, Dallas. It's been a
pleasure to get to know you.Think you did a great job
explaining the the culture, theroute to becoming CFO, and all
the success that you've broughtinto the company.
Speaker 2 (33:48):
Andrew, thank you so much for coming down, and I
appreciate our conversation thismorning.
Hello, and welcome back to another episode of the
Modern CFO podcast. As always,I'm your host, Andrew Suske.
Today, I'm thrilled to be joinedby Dallas Clement, president and
CFO of Cox Enterprises. Dallas,thank you so much for hosting
here in Atlanta. I'm reallyexcited for the conversation
today.
Speaker 2 (00:23):
Andrew, thanks for coming down. Appreciate it. It's
a rainy day here in Atlanta. Weappreciate you traveling and,
going to visit with us.
Speaker 1 (00:30):
Well, it's an incredible campus, and just the
energy of the environment, it'sbeen really fun to be here.
Speaker 2 (00:35):
Today's employee appreciation day. So we have, on
a Friday, we have a number offolks here, and our employees
are so important to us. So youcame on a good day.
Speaker 1 (00:43):
I wanna kick off this episode by talking about some of
your early career decisions andwhat you were most passionate
about in media and what led youto Cox initially.
Speaker 2 (00:51):
Sure. Happy to do that. So I was born in Florida.
My dad was a doctor. I had nonotion as to what business was.
I majored in math, so, again, nonotion of business. And I went
to Harvard, and lots of folks atthat time left and went into
consulting or investmentbanking. I went to investment
banking. That's where I reallylearned aspects of finance, but
(01:12):
I didn't like the environment.And so I went to graduate
school, went went out toStanford, and got a degree in
engineering economic systems,which is like industrial
engineering.
And afterwards I said, don'twant to go to consulting, don't
want to go to investmentbanking, want to work for a
company. And the kinds ofcompanies I liked had some
technology, some sort ofinteresting business model. I
(01:33):
was particularly focused onmedia and communications and
sent back then, there wasn't theInternet, so I sent resumes out.
And I, also happened to send aresume to a search firm. And
through that search firm, I gotconnected to Cox and landed here
just shy
Speaker 1 (01:47):
of 34 years ago. So when you were first, introduced
to Cox, did you know how largeof an enterprise it would be?
Some of the CFOs I talked to,they go into the big four
consultants to get a lot ofdifferent types of exposure.
But, as a company that's thisbig, there are so many moving
pieces. Did you know that goingin?
Speaker 2 (02:07):
I did not I wasn't aware of Cox at all when I
started, and Cox is was a lotsmaller then in 1990. I think it
was about 1,800,000,000 inrevenue. Today, we're about
23,000,000,000 in revenue. Atthat time, the biggest
businesses were radio stations,television stations, newspapers.
And in the local markets whereCox operated, they were all
(02:28):
branded the call letters of theradio stations and then and then
the television stations or thename of the newspaper.
So the Cox brand wasn't out, soI had no knowledge as to Cox at
all. The only business that wasbranded Cox was Cox Cable back
then, but I wasn't in any CoxCable markets, so I had no
exposure.
Speaker 1 (02:45):
Who are some of the influences you had early on at
the company that influenced thelongevity of your tenure here?
Speaker 2 (02:51):
I because you navigate a career, you're always
trying to balance the peopleyou're working with, the
culture, the opportunity forlearning and for growth. Are you
having fun? And I, like like Ithink many people, tried to
evaluate as best I could all ofthose early on. I think it was
the overarching culture of Coxthat was established back from
(03:13):
the founding a 125 years agothat was a contributor. I also
really enjoyed the people in thecable group.
I started in the cable groupaccording to Jimmy Hayes, the
CFO at the time, and reallyenjoyed working with him. And I
worked very closely with thehead of the cable group, Jim
Robbins. At every turn, theygave me opportunities. They
trusted me. And so I was exposedto a number of things early on
(03:37):
and had fun and was learning.
And at every chance where theremight have been a decision to
leave, I made the decision tostay.
Speaker 1 (03:45):
Wanna talk about how the business continues to
evolve. Recently, there is somemajor news around, multibillion
dollar acquisition, and it'sinteresting to see the continued
passion and diversification ofdifferent, areas of the
business. What were thedifferent focuses over the last
few decades that you've seenhave been successful in terms of
(04:07):
diversifying the focuses of thebusiness?
Speaker 2 (04:09):
So as I said, last year, we had our 100 and 25th
anniversary. And what'sinteresting is I went back and
looked at what the businesslooked like in 1985. And in
1985, the traditional mediabusiness was television, radio,
and newspapers, and that wasabout a $1,000,000,000 in
revenue. Cable was about a100,000,000 in revenue, and
(04:32):
Manheim was about a 100,000,000,200,000,000 in in revenue. And
newspapers was the largestportion of the media business in
1985, represented over half ofthat $1,000,000,000.
The business has, transitionedand transformed many times over
the last 100 and 25 years. Andpart of our paradigm is we're
(04:54):
willing to take risks on newtechnologies, new business
models, even if it competes withourselves. We don't develop new
technologies. We'll embracetechnologies. We also will not
take undue risk on leverage infinancial engineering.
And so early on, the company iswilling to go from newspapers
into radio, one of the firstplayers in radio, one of the
first players in the broadcasttelevision, one of the first
(05:15):
players into cable, and then gotinto automotive because in our
media businesses, the largestlocal advertisers typically were
automotive. So we were familiarwith automotive, and we had an
interest in Black Book and sogot into Manheim Auctions in the
19 sixties. Fast forward to thestart of the Internet, and the
newspaper group realizedclassifieds were gonna go away.
And so who better to start anonline automotive classifieds
(05:39):
than Cox? Because we hadManheim.
We knew classifieds, so westarted Auto Trader just after
the formation of the Internet.Within the cable group, when I
started in 1990, all we offeredwas analog video. And as
technology evolved and westarted introducing fiber into
the network and startedactivating the return path so
that signals could go from thehouse up into the network, We
(06:02):
started offering telephoneservice, digital video service,
and then, broadband Internetservice, and those businesses
exploded. And what I like to sayis they started birthing their
own children. So on the videoside, you had high definition.
You had DVR. You had video ondemand at interactive program
guide. On the data side, you haddifferent speed tiers. You had
(06:22):
your home page. You had homenetwork, like, home networking.
On the voice side, you startedwith circuit switch, then it
moved to voice over IP. And forall of these, we can serve not
only residential, but alsocommercial. And so that business
saw so many differentopportunities for organic. Cox
is willing to embrace thateffect. Early on, we were the
(06:43):
first to embrace offeringresidential telephone to our
customers and and a lot of ourpeers, all of us.
So it's been a huge transitionand transformation. And what we
typically have done is we takethe cash from the business to
generate. We invest in our corebusinesses to keep them relevant
and competitive in the marketsthey serve. We invest in
adjacencies to those, and thoseadjacent investments can be
(07:06):
organic or inorganic. But welike adjacencies because we can
leverage the machine of the corebusiness, the network, the
employees, the customers, themachine, and that will derisk
and hopefully enhance thelikelihood of success of an
adjacency.
So as an example, an adjacencyin cable might be getting into
wireless, getting intocommercial services, and so
(07:28):
we're doing all of those. ForCox Automotive, an adjacency
might be trying to addresswhat's happening in the EV
market and being a large playerin the EV market, helping
maintain large fleets and thingslike that. So we're we're
looking at that. But over time,we've also said we need to plant
seeds in diversification, andyou asked about open gov. And so
(07:49):
we try to be as smart as we can,and and we recognize what we're
good at, what we're not good at.
We don't develop newtechnologies. We embrace
technologies. And so ourstrategy team looks at a variety
of areas and says, hey. Whichsegments of the overall economy
are embracing technology? Isthere likely the dislocation
(08:11):
happening?
Opportunities for us to getinvolved, opportunities for the
long term because we alwaysthink long term. And we develop
a thesis. We test that thesis.We go talk to folks. We
participate in conferences.
We talk to players, managementteams, venture capital, private
equity. We try to figure out whothe best players are within that
(08:32):
strategic segment that we'vethat we have targeted, and then
we go see if we can get involvedand if we can invest or acquire,
etcetera. And OpenDev is anexample of public sector
software, which was the thesis,and we talked to a bunch of
folks. And we liked what OpenGovwas doing. Lots of cities and
municipalities, as they startedto embrace technology 10, 20
(08:53):
years ago, a lot of theirtechnology is on premise, and
they've been very slow to moveto digital and supporting mobile
apps or moving to the cloud orembracing AI.
And Opendove started 12 yearsago as a cloud based SaaS
company, and that makes it a loteasier for cities and
municipalities to provide totheir constituents the latest
(09:17):
and greatest. So 3 years ago, wegot involved by making a small
investment in a company. Andthen 2 years later or a year
later, the infrastructure billhappened, and OpenGov realized
they didn't have an assetmanagement module that was
robust enough to meet the needsfor cities and municipalities,
(09:37):
but they were aware of a companycalled Particle that had a
wonderful cloud based SaaS assetmanagement module, and the
existing investors weren't readyto underwrite that investment.
We said, we love it. We'llpartner with you open gov to go
acquire that business, and thatincreased our ownership stake in
open gov and allowed us to workand see even more what Opendhub
(09:59):
does.
And and when we do thesediversification investments, we
really we look for the thetailwinds, but we also wanna
make sure we trust theleadership. Leadership is so
important in those businessesand in all of our businesses,
and we really appreciate andrespect Zach Bookman and what
he's done and his vision for thefuture. And so we were excited
when, quite frankly, heintimated, hey. It might make
(10:22):
sense for us to work moreclosely together going forward,
and we were able to come toterms on something that worked
well for us, worked well forhim, and worked well for the
prior shareholders.
Speaker 1 (10:32):
How do you think others can take the model that
you're explaining around patientlong term focus when their
public company CFOs have toanswer to shareholders and these
adjacencies are less obvious?What would you tell, other CFOs
who are trying to communicate,all of the new potential
adjacencies that either AI isunlocking or that are newly
(10:52):
available to them?
Speaker 2 (10:53):
Over the course of the last 34 years, I've
recognized that there's 2different flavors of CFO.
There's a CFO that is morecontroller type, CPA oriented,
and then there's a CFO that'smore strategic. As I said
earlier, I was a MAP major. Idon't have a CPA. That's not my
focus.
I have folks on my team who haveCPA and make sure we get our
numbers straight. I'm morestrategic and more critical
(11:17):
thinking, and I think what theCFO can do is help the team,
help the CEO understand what areoptions available for growth in
organic, inorganic. Given thosepossibilities, how do you
prioritize given the balancesheet of priorities? And make
sure the story is consistent andyou're setting yourself up well
(11:38):
for success. Whether you'republic or private, you wanna
make sure you have a good story.
And then depending on how farthe adjacency is, it may make
sense, like we do, even ifyou're public, not to take a
huge bite and introduce morerisk, but maybe take a small
bite along the way. And youalways, as CFO or capital
allocator, wanna appreciate andunderstand the upside, but also
(12:01):
make sure you're balancing therisk and the downside as best
you can.
Speaker 1 (12:05):
How does the family business world impact your
relationship with the company?Does it provide a unique
culture? What kind of dynamicdoes it add to the business?
Speaker 2 (12:14):
As you said, Cox is private. It was started by James
Cox a 125 years ago. It'sremained in the family for those
entire 125 years. It's still a100% owned by by the family.
What I would say is the valueshave been consistent from day 1.
And in the governor's will, hesaid, do right by the employees,
your customers, do right by thecommunities that serve in the
(12:36):
family, the shareholders will befine. And and that that that
value set is pervasive acrossand creates a really strong
foundation. Every business,depending on where it is in the
life cycle, its competitiveneeds, etcetera, has a different
culture, but all based on thatfoundation. And so when you can
(12:56):
go back and look at instanceshistorically and my boss, Alex
Taylor, who's 4th generation, isa student of the history of the
company and the family. When youreach a fork in the road now,
you can go back and look at,analogous cases as to, how the
family decision makers back thennavigated those choices, and
(13:17):
everything turned out alright.
And so you can get morecomfortable on decisions you're
thinking for the long term andand trying to do what's right
and having confidence that it'sgonna turn out alright.
Speaker 1 (13:27):
Talking about patient long term focus, what's most
exciting to you in the businesslooking out 3 to 5 years?
Speaker 2 (13:34):
When Alex Taylor came in, he wanted to be very long
term oriented. And focused onfuture focused 2030, which is
want to grow, to show up wellfor all of our stakeholders by
2,034. What I get excited aboutand he he would love to have 3,
4 huge businesses in 2034 thatare generating a lot of revenue
(13:56):
and growing dynamic andoperating businesses, and I
completely respect that. I'mtrying to figure out how to
navigate from where we are tothere. And the way I think about
it to manage risks and tooptimize opportunities is
managing a portfolio of options.
And so I would like to thinkthat my job over the next couple
(14:18):
of years is continue to investin our core businesses. I find
adjacencies to help thosebusinesses transform and be
competitive and relevant andgrowing, but also plant seeds in
a variety of companies. And forthose companies, we'll have a
100% ownership and some willhave less than a 100% ownership.
And and so we'll have more andmore of those over the next 3 to
(14:39):
4 years pursuant to thestrategy. And as we move out of
10 years, I hope to have aportfolio and be making
decisions on capital allocationon where we wanna put more
capital and where we might makehard decisions to pull back.
And we do make hard decisions.And in 2019, we made the hard
decision to sell our radio andtelevision business. And
(15:00):
sometimes in any good garden tomanage for the long term, you
have to print. And so we'll makethose decisions. We don't take
we don't take them lightlybecause it impacts people.
And lots of these businesses arehave been part of our history
for a long time.
Speaker 1 (15:14):
I think it's a unique advantage as you mentioned
earlier to be able to look backin time as to how decisions were
made either culturally or justfinancially. Do you have any
advice for folks who arenavigating global instability
and, macroeconomic situationthat feels more volatile for the
first time.
Speaker 2 (15:30):
What's interesting, I was just looking at CNBC and the
Fed president from Richmond, TomBarkin, was on talking about how
productivity is pitching up. Hemade the comment that he looked
back to just the 1st year beforeCOVID, and he compared to now.
It's clicked up a little bit,but it it it's not the same
trajectory as you look at lastyear, this year, 22 to this
year. I think the point beingthat we have all managed through
(15:56):
a lot of crazy change andvolatility since we went home
for COVID in March of 20. Andand I think the lesson learned
is always trying to do the rightthing, managing the risk, making
sure you understand what are theexistential risks, and what do
you do to minimize those.
Be very smart about the risksyou're intentionally taking, and
(16:19):
let them play out and be patientand be balanced. And I think if
you have a long term mindset,you understand the downside
risk, you make calculatedinvestments for the future.
They're not all gonna be right,but we certainly had some that
haven't turned out right. But ifyou do the best, yeah, then you
just trust the process, trustthe team.
Speaker 1 (16:38):
Speaking of the pandemic and all of that change,
did you learn anything uniqueabout either your relationship
with work or culture of thecompany?
Speaker 2 (16:46):
Well, cultural company, I didn't learn anything
new because I knew we would dothe right thing for our
employees to keep them safe. Ihad never done a Zoom call or a
Teams call prior to COVID, so Ithink all of us learned that. I
think well, I'm very proud thatwe showed up for our customers,
for our employees. I'm veryproud how the team showed up to
(17:09):
manage our expenses at that timebecause we did have some revenue
impact because especially,automotive things were closed
down, etcetera. I I I think wehave learned that we are
resilient and a little bit not asurprise.
We've been around a 125 years,but the last 4 years have been a
lot of change. And I think we'revery confident and happy with
(17:33):
how resilient we are and how weshowed up for our customers. So
in the case of Cox Automotive,when things shut down,
dealerships shut down and whileour customers were earning no
revenue. And so we went to themand said, okay. So as not to
have you churn off our softwareservices, We will cut the the
(17:53):
rate in half for the time beinguntil you open up and get your
feet going.
And the market reallyappreciated what we did to try
to find that middle ground withour customers, and I'm really
proud that we showed up. And itreally has underscored our
relationship with our customersand our employees.
Speaker 1 (18:09):
Josh, I'd love to learn more about the role of
sustainability at CoxEnterprises and how it's evolved
over history
Speaker 2 (18:15):
Sure. Sure. So as I've shared before in the
governor's will, he said doright by the communities that
you serve. And Jim Kennedy, whowas CEO for a number of years,
3rd generation family, AlexTaylor, who's CEO now, 4th
generation. Both are bigoutdoorsmen and so very focused
on the environment.
And Jim Kennedy started CoxConservers about 15 years ago,
(18:37):
and Cox Conservers' mandate washow can we make our businesses
more sustainable. Early on, itwas focused on carbon. Over
time, it's evolved to water andwaste, and we've had big goals.
In in fact, we are celebrating 0waste to landfill coming up here
next in the next couple ofmonths. And so we've been
working diligently, across allour businesses to reduce the
(19:01):
carbon footprint, look for greensources of energy, take
advantage of solar, where andhow it makes sense, etcetera.
We have a team that's about 30to 40 people that report up into
me that have been very focusedon that. About 5 years ago, Alex
Taylor said, gosh. Can we punchabove our weight? Can we do more
(19:22):
in that fine businesses where wecan really drive a larger impact
versus just our operatingbusinesses. Can we own
businesses that do the same?
So we started about 5 years ago.Similar to our whole
diversification, developing athesis around different segments
within clean tech andsustainability, and then having
(19:43):
conversations, deciding whereare interesting areas. And so
today, we have a big focus oncontrolled environment
agriculture bought a companycalled Mooji that does fine
crops in greenhouses, nextgeneration greenhouses, and a
company called BrightFarms thatis doing next generation
greenhouses for leafy greens. Infact, this year, we'll be
(20:04):
opening up 3 next generationleafy green greenhouses to
support the United States. Andwhat's so nice about that is
right now, leafy greens that weeat in Atlanta probably come
from California, and Californiais either in drought or too much
water.
So a lot of it is ruined. Andthen once it's picked, it's
gotta be transported all the wayto to Atlanta. One of the
(20:26):
greenhouses we're gonna beopening up is down in Macon,
South Georgia. And so it'll gethere, more quickly. It'll take
less time.
It'll be fresher. It stays onthe shelves longer. It's a win
win for the environment, forgrocery stores, retailers, and
for retailers' customers. Sowe're excited about that
opportunity in controlledenvironment agriculture. We also
(20:48):
happened on a plastics recyclingbusiness using pyrolysis and
called Nexus Circular, and wehave been supporting that
business for a number of years.
We're in the process now ofvalidating a generation 3
reactor and process to take hardto recycle plastics, so not the
Dasani bottles, the Coke Dasanibottles, which are easier to
(21:11):
recycle, but film, grocery bags,things like that are harder to
recycle and using paralysis tointensely no oxygen to melt down
to the base oil that can go backin a circular economy into the
crackers to create new plastics,and we're excited about that. We
also made an investment in asolar company that helps
(21:34):
businesses and helps,communities build solar and
finance solar, something calledBSD, and so we're a minority
investor in that business. Sowe're very excited about it.
It's an important part. It'svery much aligned with our
values.
Speaker 1 (21:47):
One of my favorite parts of every podcast that I do
is I ask, what's one thing thatyou feel is just underestimated
in the world today? And itdoesn't have to be business
related, and I just think it's afun opportunity to highlight the
unique vantage point of CFOsthat I speak with.
Speaker 2 (22:01):
It's interesting. I guess what I would say to that
answer, I think people continueto underappreciate that everyone
comes to a conversation indifferent context, and people
don't take enough time to levelset on the context they have,
their history, their perspectiveversus what you may come to the
table with. And if you spend thetime time listening, asking
(22:22):
probing questions, openingquestions, communicating, I just
know people tend to be veryreasonable. So what I would say
is it's just good old fashionedcommunication.
Speaker 1 (22:33):
Yeah. I really like that. I often say people should
hit that back button whenthey're listening to Mhmm.
Listen to something again. Iwould definitely recommend it.
That's a great answer. Thanksfor sharing that. One thing I
was really excited to talk toyou about today is some of the
frameworks and playbooks. Youmentioned the hypothesis testing
strategy of diversifyinginvestments, whether total
acquisitions or smallerinvestments. Are there other
(22:54):
playbooks or frameworks thatyou've seen other CFOs adopt
that work really well?
Speaker 2 (22:58):
A comment I always make is that I'm happy to copy
paste. If someone else is doingsomething really well and it's
working well for them, there'sno reason not to bring it in to
what's a Cox and copy paste. SoI'm always looking for good
ideas and good thinking. I can'tthink off the top of my head of
someone that I have done thatwith, but it's just an ongoing
perspective. What I can tell youis that you have to evolve and
(23:22):
you have to be open minded.
And in every conversation, Itake something something away,
and I'll give you an example.I've been in a company 34 years,
and I've been involved in avariety of investments. And when
I was cable division, I realizedthat if you make a $2,000,000
investment or a $5,000,000investment into a business,
there's a certain amount of workto be done. And and let's say it
(23:42):
gets the 10 x return on thatinvestment. For a venture firm,
that's a huge home run.
For a company our size, a 10 xreturn on a 5,000,000
investment, that's $50,000,000.It doesn't move the needle for
us. And so I was very negativeon doing those early stage
investments. Fast forward totoday, I do think technology is
(24:04):
evolving more quickly now. Andyou can get McKinsey or another
consulting firm to give you aprimer on artificial
intelligence as an example,which you really won't know or
appreciate how it's going todisrupt your business, other
businesses, unless you see howthe early stage companies are
actually using it and actuallydisrupting.
And so we started a fund here toinvest in those early stage
(24:28):
businesses. It's called SocionVentures. And we started key is
to get exposure to have earlystage companies are actually
using the latest and greatesttechnology to disrupt. What I've
noticed in the market is a lotof venture firms and early stage
firms start with a venture firm,and then they realize, gosh.
I've got 10 businesses in thefirm.
2 of them are doing really well.I don't wanna let them go out of
(24:52):
here, and so they start anopportunity fund. So when they
start the opportunity fund, theyfocus on those top 2 out of
their venture fund. And so ifyou're not in the cap structure
early on, you may never have achance to to to talk to the
company or or be invested. So byby having the associate and
fund, we're in the conversation,might even be in the cap
structure, increases thelikelihood that we'll be invited
(25:14):
to the table and help with ourstrategy.
And then the last thing I wouldsay is we try to look for
opportunities for our teammatesto get involved with these to
either be either mentor or be onthe board, etcetera. And it just
allows people in a varietyaspects, Cox, to be exposed to
this, disruption, thisinnovation, and hopefully bring
(25:35):
new ideas to what they do everyday.
Speaker 1 (25:37):
Outside of the formal process of hiring at McKinsey,
where do you go for yourcontinuous learning? Either
reading or talking to these newinvestment teams or these
younger portfolio companies.What's an example of somewhere
you go for new information?
Speaker 2 (25:51):
I wouldn't say that there's a particular place. As
you might guess, a companythat's as large as we are, as
diverse as we are, we have avariety of relationships. And so
I'm always meeting with externalfolks. And and in each of those
conversations, it's what arethey doing to help us, and how
(26:11):
can I help that relationship bemore effective? But in those
conversations, I always askthem, hey.
What are other folks doing, andwhat are you what are you doing?
What are you seeing? And thatincreases my intelligence and
and and my awareness. That'spart of my learning process.
I'll also when I talk to leadershere let's take the tax
department as an example.
(26:32):
It used to be the best leaderswere were the operating p and l
leaders, and and I'm I'm tryingto move away from I think
leadership can come anywhere.And I think even a tax leader
can be, quote, a p and l leaderbecause, number 1, they they
have to execute on their team,find good talent, and plan for
(26:53):
succession. To they have tooptimize the structure so that
we can optimize our taxes, andthey should always understand
what's happening in the externalmarket about how efficient are
they as a tax department for a$23,000,000,000 revenue company,
but, also, what are bestpractices? What are others doing
in terms of embracingtechnology, etcetera? As an
(27:16):
example, again, within taxdepartment was the first
department, about 7, 8 yearsago, really leaning in on RPA
within our organization.
And so I believe innovation canhappen anywhere, and I really
hold our leaders accountable forbeing the expert in their
domain. And expertise isn't justexecuting internally. It's also
being aware of what's happeningexternally. And so every time I
(27:37):
talk to our leaders, I learnsomething new about what's
happening in innovation, what'shappening externally in their
particular area, and that helpsmy learning. And then I, like
lots of leaders, read papers,read journals.
There's lots of digitalnewsletters, including Axios,
which we which we own, and and Iget smarter every time I read
(27:58):
those stories. And so it's atapestry of a variety of places
where I I get more shoes oflearning.
Speaker 1 (28:06):
Do you have any advice for aspiring CFOs?
Speaker 2 (28:08):
If you look at the CFOs or automotive CFOs of of
our cable business and and thenmyself, the way to, at least in
our organization, become a CFOis over the course of your
career, not think about thecareer ladder. Think about the
career jungle gym. And so don'tbe afraid to take laterals.
Don't be afraid to move into adifferent business. Don't be
(28:30):
afraid to move into a differentdiscipline.
Because every time you do that,you are exposed and experiment
different leadership, adifferent dynamic, a different
different challenges, differentopportunities, and that all
becomes part of your skill set,part of your portfolio such that
you're better prepared in thesehigher tier leadership positions
to think critically, to thinklong term, to think about the
(28:52):
risks. Yeah. These are theaspects I talked about before.
And if you've seen them in avariety of places, you better
appreciate all of thepossibilities in these key,
decisions, in the leadershiproles.
Speaker 1 (29:05):
What's an example of a time that you went through
adversity through your career oran example of a major win, and
did they have any overlaps?
Speaker 2 (29:13):
What's interesting, that question is a little bit
different than the question Itypically get from folks in
internally, which is what keepsyou up at night? And my answer
is always I have 4 daughters.And the reason I say that is I
try my best to have really goodteammates, good leaders, and I
trust them. And we engage. Andit doesn't mean they're gonna
make every decision correctly.
(29:35):
It doesn't mean every decisionwill be a success. But over the
long term, if you trust yourleaders and you have good
leaders, everything's gonna beall alright. So I I don't spend,
relative to work, lots ofsleepless nights. Your question
was a little bit different. Andas I think, I I spent 20 years
in our cable group, the first 10finance oriented positions, the
next 10 product and strategyoriented positions, and then 5
(29:59):
in automotive and now 9 in CoxEnterprises.
And if you say, okay. What's therole that I learned a lot and
grew a lot? I I would say whenCox Communications went public
in 95, we had a decision tomake. Do we hire someone
externally who knows investorrelations that doesn't know the
management team, the culture, orthe strategy, or you have
someone internally who knowsthose and teach them investor
(30:22):
relations. And and so I was theMikey of Cox.
Let's get Dallas to do it. It'lldo anything. And so I was thrust
into investor relations land andand picked up coverage on 26
with 26 different sell sideanalysts, helped our CEO and CFO
pull together presentations,manage conferences, etcetera. I
learned so much. In that role,you can be a traffic cop and
(30:44):
hand off questions to theresident expert, or you can,
over time, start to take thosequestions on your own because
you've been you've been in it.
And if you exercise yourcritical thinking, your
communication skills, you askquestions of the resident
expert, and you understand it.Once you understand it, you're
gonna understand it better thanthe sell side analyst calling
you, and you can start to dothat. And so I became a valued
(31:07):
partner to our shareholders andthe analysts, and I learned a
lot. Back to what I said before,learn how to communicate, learn
how to influence without givingthe exact answer. Because in the
world of financial disclosure,you can't give the exact answer,
but you can talk about the riskthat someone has who's
overthinking where you're gonnaend up or the opportunities
(31:29):
someone may have missed ifthey're underappreciating where
you think you're gonna end up.
So that was a really valuablerole for me in in my sort of
transition. And then the rolethat was challenged for me was
also our cable group, and we'relaunching wireless today. We
tried to launch wireless severaltimes. And in the mid 2000s, I
(31:51):
was responsible for wireless.And it was hard for a lot of
reasons.
Number 1, it was a difficultrelationship with our CIO at the
time, and he and he and his teamwere developing the billing
platform for our wirelessoffering. And it wasn't on
track, And fingers were pointingin multiple different
(32:11):
directions, and and that washard. And I wasn't necessarily
an expert in it. And so tryingto figure out what questions am
I not asking, how can Icommunicate, etcetera, that was
hard? As we were looking to getinto wireless, the iPhone
launched and we didn't haveaccess to the iPhone and so all
of a sudden it caused you tosecond guess your strategy about
(32:33):
getting into wireless becauseyou sorta had a feel that this
iPhone thing is gonna becritically important for new
wireless customers, and wedidn't have access to it.
That was probably the hardestsituation in my 34 years. I've
got this really uniqueopportunity to
Speaker 1 (32:47):
be here today on employee appreciation day. For
people who are interested inmore about the culture of Cox,
where should they go to learnmore about the company, the
history? And because of all thedifferent divisions, I'm sure
you're actively hiring most ofthe time.
Speaker 2 (33:01):
We have a website, so you can always go to the
website, and that, does a reallygood job of sharing a bit of our
history, sharing a bit of whatwe're doing. Websites, no matter
how dynamic they are, they maynot fully embrace the culture. I
think in terms of the culture,someone's really interested.
They gotta come on campus, andthey gotta visit with folks. And
we're always happy to talk tofolks and visit.
(33:24):
Yes. You're right. We arehiring, and those positions are
publicly available, and peoplecan look at our website and get
and link to the the jobopportunities and look at those
and always happy to get resumesfrom great qualified folks.
Excellent.
Speaker 1 (33:38):
Well, thank you so much, Dallas. It's been a
pleasure to get to know you.Think you did a great job
explaining the the culture, theroute to becoming CFO, and all
the success that you've broughtinto the company.
Speaker 2 (33:48):
Andrew, thank you so much for coming down, and I
appreciate our conversation thismorning.
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