Interview with Barry Rowan
Interviewer: Andrew Zezas, SIOR
Following is the transcript of a CFO Studio interview between Andrew Zezas, CEO of New Jersey based Real Estate Strategies Corporation and finance executive, Barry Rowan, CFO of Vonage Corporation.
Visit www.CFOstudio.com to read about this interview and to watch the entire video interview.
A Search for Meaning in Our Work
Zezas: Hi, this is Andrew Zezas, your host at CFO Studio. I have the pleasure of being joined today by Barry Rowan. Mr. Rowan is Executive Vice President & Chief Financial Officer & Chief Administrative Officer of Vonage Corporation. Mr. Rowan has more than thirty years experience in building communications and technology companies. He’s presently at Vonage, a $900 million revenue company that recently experienced dramatic financial and operational turnaround. Barry, it’s nice to have you here on CFO Studio.
Rowan: Thanks Andy, it’s great to be here with you.
Zezas: Barry, today we’re talking about a very exciting topic and one that is rather unusual to finance executives: A Search for Meaning in Our Work. I’m going to jump right in because I’ve got a lot of questions for you. Given with what is going on in the world today, many finance executives are struggling. They’re struggling with constant transition, they’re struggling with the pressure to achieve results. How do CFOs, specifically, bring meaning to their careers, to their companies, and to society in the face of these challenges.
Rowan: Well, Andy, there’s no questions that the challenges and demands are real. Altogether, too real. As a public company, they come around every quarter, if not daily. So, the pressures are real. What I’ve come to understand is that meaning is not found apart from our work, but a part of our work. I had a friend for example who played football for a coach who described his job as being an architect of young men.
Zezas: An architect of young men?
Rowan: An architect of young men and a high school football coach. You might say, “Well, what does winning have to do with that and how do you make those connections?” Well, if hadn’t set out to win, there would’ve been really no opportunity to shape the character of those young men because it was the desire to win and the need to win that caused them to get off the field faster, to work harder, to train harder. In the same way in business, it’s the pressure that enables us to do what we need to do and we are transformed personally as we go about the business of doing our jobs and go about the pressures of performing our work, particularly as a public company. So, it’s a little bit like a diamond. I have a chemistry background, so you may know that diamonds are actually carbon that become diamonds under the pressures of the Earth. Only through that pressure that we really come into the fullness that we’re designed to live into.
Zezas: Well, here’s an example of diamonds. You mentioned shaping character. Once that diamond is created, then it requires that character shaping and that cutting and that slicing to really turn it into something magnificent.
Rowan: I guess that’s right and sometimes the cutting hurts.
Zezas: You’re absolutely correct. Stereotypical CFO, very serious, debits and credits, strategy focused, but you talk about bringing meaning to your work. Explain that to me in the context of a CFO.
Rowan: Well, Andy, it really grew out of a struggle for meaning in my work early in my career. My first out of business school was as a CFO: a start-up company, an eight person company. I couldn’t even spell “CFO” at the time. I really did wrestle with this question of meaning in my work and the challenge for me was how to make the connection between what I’m doing in this moment and my purpose in life. Frankly, I could not just make that connection. That was over a period of years that I wrestled with the question and immersed myself with it. I realized I was just looking at work all wrong and I had to go through what I describe as a succession of paradigm shifts and the central paradigm shift for me was that I was trying to drive meaning from my work instead of bringing meaning to the work. As I came to understand that, I began to realize that the role of business and society is to contribute to a better society and business has a lot to do with that. So, the central purpose of business is to serve and we can talk about how business does that in so many ways. Let me just offer four ways that business serves society. First is responsible value creation. I don’t know if you’ve ever thought of this, but business is the only institution that creates value. Every other institution distributes it. We’re involved personally, for example, in helping the poor in Central America. You only have to get off the airplane in Honduras to say there is something different about this place. One of the difference is clearly GDP per capita. Business is the only thing that creates that GDP and I’m not saying that money is the solution to the world’s problems, but clearly economic value is a hallmark of a well functioning society. So, business plays a role in doing that. So that’s one, responsible value creation. The second is in serving our customers, which is an obvious one, but by delivering on our promises to customers every day, that’s an important way that business serves. In the case of Vonage, it’s enabling people to save money on their phone bills. A third way would be creating jobs, but not just jobs, jobs that enable people to grow into the full expression of themselves. Being a math-oriented guy, I’ve actually done the math. We’ll work about 100,000 hours in our lifetime.
Zezas: 100,000. Well, that makes sense.
Rowan: 100,000 over 40 years. That’s a lot of hours to go home and kick your dog every night if you don’t like your job. So, we have a lot to do with creating jobs that enable people to express their giftedness. And, fourthly would be a valued corporate citizen. In the case of Vonage, when the earthquake struck Haiti, we offered free calling to Haiti. Similarly, when the tsunami hit Japan, we offered free calling to Japan because as a communications company, it was something that we could do. So, in that context, I see the fundamental purpose of business is to serve so my role is to serve the organization’s so that they can serve society that benefits the common good.
Zezas: So, as a CFO, one of your primary objectives would be to serve the organization so that they can, in turn, serve. You’re talking about having them serve employees, customers, shareholders, whomever the stakeholders may be.
Zezas: It sounds like while you’re certainly focused on results, I’m hearing a lot about experience as well as results and the experience that you create for all people involved in the full spectrum.
Rowan: Yea, and it really has to do with the way that I look at the experience. So then, each moment becomes an opportunity to grow more deeply and to serve in that capacity whether it’s doing a performance review for somebody that is almost a sacred opportunity to talk about what they’re good at and where there are areas of development are because you can imagine that the things impeding them at work are also impeding them in other aspects of their lives. So, it is just one small example of what appears to be the mundane can really be an important life giving part of what we do.
Zezas: Excellent. Barry, you’ve said that, I’m going to quote you here, “There are no stable points anymore. Everything is moving quickly.” How has that view affected your leadership as a senior executive in all of the companies that you’ve worked for.
Rowan: Well, certainly particularly being involved in communications technology companies. The pace of change is accelerating and externally, there isn’t much that is staying the same. Blackberries are always on as we well know.
Zezas: The world is moving faster.
Rowan: What I’ve come to realize is that it’s operating from a foundation of unchanging principles that enables us to deal with this rapid change in the external world and so if we can be more grounded internally, it enables us to face this unstable, exterior world with a sense of stability and confidence and even a sense of satisfaction in the midst of the storm.
Zezas: Wow, that’s heavy, but’s it’s meaningful. And, that’s what we’re talking about today, is meaning and bringing meaning to your work. I’m going to quote you once more if I may. There is something in particular that I know you said. You have been quoted as saying, “The true purpose of meaning is to serve.” I know that a few moments ago you talked about serving. But, is the idea of business and serving really that new? I mean, go back to history. JFK said, “Ask not what your country can do for you, but what you can do for your country.” Is really that new, Barry?
Rowan: You know, it’s not new at all, Andy. Just because it’s not new does not mean it’s not right. I mean, you can go back thousands of years. Jesus, for example, talked about what’s described today in terms of leadership. Ghandi led by being a model of service as he focused on trying to free up India from the rule of the British for example. So, it’s not at all a new concept. I think the opportunity and the responsibility that we have is to reinterpret that for our times. The science of management is really only about 100 years old. So, what does it mean in this context to serve, particularly in the face of the rapid change that we’re talking about.
Zezas: Alright, so service is not new, but just because it’s not new does not mean it’s not relevant and it doesn’t mean it’s not relevant. I understand. I’m going to quote you once more if I may.
Rowan: There might be better people to quote than me, but go ahead.
Zezas: I like your quotes Barry. You said, “Business should create an environment that encourages people to grow into the full expression of themselves and to work with each other rather than against each other. Now, I thought I was talking to a CFO. You sound an awful lot like an HR executive. As a finance executive though, as a true CFO, a CEO, and Chief Administrative Officer, how can you quantify the operational and financial impact of this perspective?
Rowan: Well, as a guy who spent most of his life trying to measure things and measure results, it may sound odd, but I think that the most important things are difficult to measure, in fact, impossible to measure. If I were to ask you about the quality of the relationship with your wife or your kids, you could probably tell me how it’s going.
Zezas: I could tell you how great it feels. I could tell you four hugs yesterday and three hugs the day before, but I’m not really quantifying the relationship.
Rowan: But, you don’t need a score card to know that right. So, really the objective here is to do the right thing and I feel so deeply about his on focusing on work this way and releasing the potential of people. If people are living up to their potential, then the organization is going to live to their potential and that’s the connection point. By the way, what I’ve also come to realize is that which is visible is often temporary. But, the invisible things are the things that last like the quality of our character, the nature of the relationships that we have. My wife and I happened to be married for 30 years, for example. Those things are the things that really have the enduring qualities.
Zezas: I couldn’t agree with you more. Barry, we’re in a sound bite world. Decisions are made in seconds. Shareholders are demanding positive returns, quarter after quarter. How is your approach of bringing meaning to your work positively affected your stakeholders? I am asking that in the context of employees, shareholders, customers, and anyone else.
Rowan: Don’t get me wrong, Andy. Results matter a lot, a great deal. I wouldn’t be in this job, I wouldn’t be able to keep this job if we hadn’t achieved significant results. Let me give you an example. When I came to my current employer, Vonage, we had about $240 million of debt that carried interest rates ranging from 16 – 20%
Zezas: 16 – 20% interest rates? Wow.
Rowan: As a real estate guy, you appreciate the impact of that. So, my wife described one of the aspects of my job, in her words, is to break the bondage of the bond holders. And, that clearly was the case. So, we did in fact do that. We did two comprehensive refinancing that reduced the amount of interest we paid from $49 million in 2010 to $6 million on a go forward basis after the second refinancing. Clearly, an over $40 million change in annual expense is a big deal. So, the results really do matter, but by me playing my job, fulfilling my role as a CFO, that enable Vonage to do better so that it can serve its purpose, which is to contribute to a better society. If I can answer the questions more on a personal level, I wouldn’t be doing what I’m doing today without having this transformed perspective of work, frankly. Again, early in my career, I just couldn’t make these connections that we talked about. I think I would have thrown in the towel. I think I would have tried to go do something different, but I kept being drawn back to business. The way I describe it is that I changed jobs without changing business cards and it has brought a level of meaning and joy to what I do that I honestly never thought possible. I guess my hope for people who might be looking at this video is to say that we really can bring meaning to our work and there’s no ‘so that’ to what I do. I don’t work so that I could make a pile of money and give it away. I don’t work so that I could retire some day and do something that’s really meaningful. It’s the things that we do every single moment of the day when I’m in the right frame of mind at least, that we offer the opportunity to bring this meaning to the work and therefore, the 100,000 hours can really count in this lifetime.
Zezas: So, for you Barry, this is not an academic exercise. This is real and this has had a profound change on you.
Rowan: It has. Honestly, I would not be doing this if I hadn’t come into this perspective. In fact, my wife and I, prior to coming to this job, took a purposeful pause for three years after our last company was sold. It was really this perspective of work that caused me to come back to work because I feel so deeply about that connection between the role business has to play in contributing to a better society.
Zezas: I feel the energy. I see the sparkles in your eyes. It sounds like not only are you accomplishing great things for the company, but that you’re enjoying yourself and you’re having fun.
Rowan: It’s been a lot of work. I haven’t worked this hard since my twenties, but truly it has been great. I’m like one of those orange road signs though, that say ‘end of construction, thank you for your patience.’ When I get to die, that’s what it’ll say. At the moment, I’m still under construction.
Zezas: Barry, this has been a lot of fun. I truly appreciate you visiting with us on CFO Studio and I hope you’ll come back and see us again.
Rowan: Great. Thank you very much, Andy.
Zezas: It’s been a pleasure. This is Andrew Zezas, your host at CFO Studio, with Barry Rowan of Vonage Corporation, saying thank you very much for watching.
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