10 Questions for Palo Alto Networks CFO Michael Lehman
Name: Michael Lehman
Time with company: 1 year, 9 months
Education: Bachelor's degree in business administration from the University of Wisconsin
Company headquarters: Santa Clara, California, with several sales and support offices in Europe and Asia
Revenue: The company announced in August 2011 that it is well ahead of US$200 million in bookings run-rate
Number of countries: Customers in more than 50 countries
Number of employees total: 500
Number of employees the CFO oversees: 70
About the company: Palo Alto Networks is a network security company that offers next-generation firewalls that allow granular policy control of applications and content.
1. Where did you start in finance and what experiences led you to the job you have today?
I started with public accounting right after college when I went to PriceWaterhouse. I was there 13 years. They told me I wasn't going to be a partner and I was devastated because I wanted to be a partner, so I had to leave. Then I went to Sun Microsystems. I was there for six years before I became CFO and I had six different jobs while I was there. The most notable one is that I lived and worked in Hong Kong as finance director of Asia. That gave me a great window into how to do business in Asia and how to live outside of the United States. That role set me apart from everyone else when it came time to be CFO.
2. Who was an influential boss for you and what lessons did they teach you about management and leadership?
I would say the most influential boss for me was a gentleman named Kevin Melia. He was the CFO at Sun right before me, so he was my predecessor. He really taught me my fundamental philosophy, which is to hire great people who are as good or better than you and allow them to do their job. Give them the support they need and the resources they need and let them do their job, which frees me up to go do many other things.
In my career, what happened was the CEO gave me more and more responsibility. I went from being just CFO to managing HR, facilities, information technology, corporate planning and development, even our public planning efforts, [and] legal. I essentially broadened my role dramatically, so we actually wound up creating a role called vice president of corporate resources.
3. What are the biggest challenges facing CFOs today?
It's a combination of two things. Right now there is so much economic uncertainty that makes it difficult for CFOs and companies to plan long term. The volatility in the market, the volatility of customer demand -- it makes it more challenging than in any other three- to five-year period. That's one. I'd also say there is continued regulation and oversight that makes it difficult as well -- managing the demands for inspection and oversight from outside and adapting to the volatility in the market.
4. What is a good day at work like for you?
A good day involves, I would say, a combination of things. There's external contact and quality internal interaction. A good day for me would be one that includes customer visits in which I speak to the customer about who we are, what we're dong and why they should feel good about doing business with us, and I get to answer their questions. Those are the most fun days for me, when I get to participate as both a participant and a speaker. Then there are quality internal meetings, where we get to meet, talk and make a decision.
That's the combination that would make a good day for me. And no surprises. There can be good surprises, but that's not typically the kind that I think about.
5. How would you characterize your management style?
I'd say the simplest way to put it is hands off. As I mentioned before, I try to hire really high-quality people, give them the resources to do their role, give them some sort of vision and context, and then get out of their way and let them go deliver.
6. What strengths and qualities do you look for in job candidates?
I look for someone who is a self-starter, who is highly motivated, who has a vision of where they want to go and how this particular role would be good for them. I want them to be independent and also a very good communicator.
7. What are some of your favorite interview questions or techniques to elicit information to determine whether a candidate will be successful at your company? What sort of answers send up red flags for you and make you think a job candidate wouldn't be a good fit?
My favorite that I try to use on people that I'm hiring directly is that I ask them to describe the best person that they've ever hired and why that person was ultimately successful, or I ask the opposite, which is what's the biggest hiring mistake they ever made and what they learned from it. I'm looking for how they work, how they manage people, how they motivate their employees. It gives me pretty good insight into how they work day in and day out, and that gives me a good idea of whether they would work for our company.
If they tell me that they hired someone who is too independent and that that didn't work for them, that's a big red flag.
8. What is it about your current job, at this particular company, that sets it apart from other chief finance positions?
It's a combination of things. We are certainly in a market that has great growth opportunities. Network security is on everyone's minds, so we're in a good market. We have an extremely differentiated product. We're at the point where when we demonstrate our products to customers, their eyes really light up.
It's a company with highly experienced, highly motivated people, great products, great market opportunities, and the chance for us to go build something with great long-term market opportunities. And that's fun and interesting.
9. What do you do to unwind from a hectic day?
I go directly to my fitness center, which is on the way home, and take advantage of the wide range of opportunities there. I'm a big biker, lots of cardio activity. I go to the fitness center four or five days a week and play on the weekend. I can do that because my kids are all grown up and I have more flexibility at the end of the day than many do.
10. If you weren't doing this job, what would you be doing?
I had a four-year period when I was retired and I kept active by being on a number of boards of directors, both public and private. I was associated with my university -- the University of Wisconsin-Madison -- and I traveled extensively, exercised and played golf, so I imagine I will be doing that again.