When Andreas Schulmeyer was tapped by Walmart to help it compete online with Amazon in 2008, the veteran CFO brought skills on the strategic side of finance that was key to helping the retail giant play catchup as an e-commerce powerhouse.

“Walmart is obviously, like, a super-tanker, in that it doesn’t respond to immediate changes,” Schulmeyer said in a CFO Thought Leader podcast earlier this week. “It takes a while to plan these changes of direction.” 

Schulmeyer, an MIT-trained engineer who quickly moved into business, first as an associate with Boston Consulting Group and then in corporate finance roles, said Walmart took a forward-looking approach by letting him and other executives structure the retailer’s e-commerce operation as a Silicon Valley-styled company. 

That meant basing the company in California rather than Bentonville, Arkansas, the company’s headquarters, hiring most of the talent from Silicon Valley, and managing them the way they were used to being managed in the startup world.

“Most of the team that worked for us in California didn’t want to be part of the core team of Walmart,” he said. “I think leaving the e-commerce business out in California actually provided the right environment for Walmart.”

This freedom from Bentonville, he said, was instrumental in enabling him to get the best out of the software engineers without alienating them by making them cross every t and dot every i, both in the way they did their work and in the financials.

“Walmart is very used to counting nuts and bolts,” he said. “But what’s the life of that software? How much did it cost to build? If you know engineers in Silicon Valley, they will never give you how many hours they worked on which project. So, it was impossible to build that level of detail on how much the software was actually on the books for, piece by piece, but what I could give them was the overall picture.”

Schulmeyer said he was able to get Walmart’s controller to agree to an accounting method in which the e-commerce affiliate would list in aggregate the software under development based on the expected life span of each application, whether that was less than a year, up to three years, and so on.

“We said, ‘Let us build the software we need to and we just report it that way, which gives you, according to the accounting rules, a good representation of our assets as they are on the books at this point,’” he said. “‘But if you ask us to track each piece individually, I'm going to lose a bunch of engineers who are going to walk out the door. So you’ve got to make a choice as the controller team. How tight do you want those controls? What are you willing to live with so that we can build the software that we need to, and you get the accounting that we agree meets the requirements of GAAP on measuring the assets we have?’”

Crucially, Walmart had deep enough resources to let them chart their own course, both in the financing and how they approached their work. That enabled the company to step into e-commerce as a competitor to Amazon rather than start from behind and only incrementally try to catch up.

“The luxury of working in a company like Walmart is you can fail,” he said. “Walmart is just so large that you can really experiment with things and figure out how to make them work. So, that was one of the enticements for me to come over. We were effectively starting up a new e-commerce business here with one of the biggest funds behind us.”

Broader focus on CFO skills

Schulmeyer said he has taken only one accounting class in his life, so it wasn’t his skill in accounting that companies were interested in when he got into the field.

One of his first corporate jobs, after his early years as a consultant, was as head of finance for PepsiCo’s operations in China. That was in the early 2000s and even at that point PepsiCo had a reputation for being an innovator by elevating people in finance who didn’t come up through traditional accounting channels.

“The financial planning and the strategic piece is really what drives the PepsiCo finance team,” he said. “Almost all of the CFOs — divisional, country, and so forth — come from the planning or strategy and business development side rather than the accounting teams. So, I think that’s a resource that’s become more and more in demand rather than the formal accounting training that enables you to put together the financial statements.”

In China, Schulmeyer helped PepsiCo introduce the Frito Lay brand in what he said was the first potato-chip based snack food introduction into that market, which he said went well.

“Based on the success of that initial launch, my role was to figure out how to build that business as quickly as possible,” he said. “I effectively ended my role in China when we decided to invest in the first Frito Lay factory out there to really build a large line."

Schulmeyer said from there he moved back to the United States as CFO of PepsiCo’s new ecommerce business, an entirely new field for him at the time but that he felt comfortable moving into because of his consulting experience.

“As a consultant you’re used to being thrown into a business that you don’t understand when you start because it’s in a different company, different category, maybe even a different segment,” he said.

The broader movement in finance, with more CFOs being brought in or expected to evolve into a strategic partner with the CEO, really began in the 1980s but has accelerated in recent years, Schulmeyer suggested.

After PepsiCo and then Walmart, Schulmeyer joined L Brands, owner of Victoria’s Secret, Bath and Body Works, and other retail brands, as head of ecommerce, a pure strategic management position, and in July returned to the CFO role, for Better Choice Company, a public holding company for health-oriented pet foods.

What ties all the roles together is the focus on strategic planning.

“The accounting side is still very important,” he said. “We still need to close the books like every other company but figuring out how to reinterpret what a lot of people now say of the GAAP numbers — that they don’t always work for management P&Ls — so we can drive company behavior that gets us to the right answer, that’s the discrepancy that started to open up in terms of how you look at management performance vs. the financial accounting performance.”