When Rebecca Mahadeva was working on the New York Mets auditing account for Coopers & Lybrand in 1999, she traveled to St. Catharines with the Mets’ controller to make sure the Major League Baseball team wasn’t over-paying for the Canadian town’s minor league team.
The Mets wanted to buy the team, called the Stompers, and move it to Brooklyn as part of its farm system. The deal closed and the Stompers became the Cyclones. Less than a year later, Mahadeva joined the Mets as its assistant controller, launching a 12-year career with the team.
“I didn’t realize it at the time, but that trip was my job interview,” said Mahadeva, now CFO of digital healthcare advertising firm Greater Than One. “That was the way the controller got to know me, not just as an auditor but as a potential future employee.”
At the Mets, Mahadeva found ways to save the company time and money through increased efficiencies, starting with the way it calculated player state tax liabilities.
“We had a very manual exercise,” she said last week in a CFO Thought Leader podcast. “It blew my mind, it was so inefficient.”
The process involved accounting staff entering into an Excel spreadsheet the player’s salary at the time of travel, the city they played in, and how many games they played there.
“I would literally say, ‘Okay, player salary for the first week of [the games] is x, divide by the number of days, and multiply by the three days they went to Philly, or the three days they went to Chicago,’” she said. “It took days and was often wrong because of the manual process.”
To make improvements, Mahadeva brought in a Long Island payroll company that specialized in biometric timekeeping.
“We had them build in automation so that we can just plug in dates where a player moved up or down through the minor league, major league system, and also from city to city,” she said. “We pre-loaded the schedule, automated the system, and we reduced the amount of time it took us to get a player calculated from three days to about four hours.”
Different kind of business
As a business enterprise, professional baseball is unlike most other companies, she said. “It really doesn’t have much risk associated with it. It doesn't change. You have broadcasting agreements, ticket sales, concessions — that’s the core business.’’
Nor does the auditing resemble the process used in other businesses, she said. “You’re auditing the future obligation of player contracts. You’re looking at revenue sharing calculations. So, it’s extremely nuanced.”
Mahadeva said she would have stayed with the team indefinitely, like so many team employees do, but the slow turnover meant few growth opportunities.
“I have a lot of love for the organization and for the people who are there,” she said. “Baseball is a hard industry to leave.”
In the healthcare advertising business, Mahadeva made her mark at one of the companies she worked for by incentivizing employees to work extra hours in the fourth quarter to help offset a weak earlier quarter.
“They had started off the year very slow,” she said. “They missed their Q1 projections by about $3 million. In the full year there was a $62 million forecast.”
It’s hard in the professional services industry to catch up after an underperforming quarter, she said, because the company only has billable hours to sell. Since employees can only work so many hours a week, once the company underperforms in a quarter, that time can’t be made up unless the company brings in new, unbudgeted business and employees can work overtime without cutting into their performance.
“You don’t have enough capacity in-house with your existing staff to earn out what these revenue targets need to be for the remainder of the year,” she said.
After second and third quarters proceeded as budgeted, Mahadeva helped company leadership devise a payment plan to incentivize employees to work extra hours, even as the holiday season approached, to take advantage of new work that came in.
“I pulled together some data and went to senior management, the president of the company, and said, ‘Okay, if we incentivize people to work more than their target utilization, we get these extra three points of utilization from our staff,’” she said. “‘We’ll pay people $70 an hour for every hour they work over their normal regular week.’”
As a result, the company increased its revenue by $600,000 during the fourth quarter at a $220,000 cost in extra salaries.
“We knew going in it would affect our bottom line,” she said. “But it allowed us to achieve that incremental growth.”
Mahadeva took a circuitous path to finance. As an undergraduate in a small liberal arts college in New England, she planned to go into law, but shifted to accounting and finance in graduate school in a program that was designed for people with analytical skills but no math background. “It was tailored to liberal arts majors,” she said.
At Greater Than One, she focuses on finding the balance between the billable hours the company’s employees work and the rate they charge.
“We don’t have inventory,” she said. “We sell hours of time. So. I’m always trying to balance how we operationalize the output of our employees and that hour of time that gets billed to our clients — what levels that hour needs to be for us to make our profit margin without overtaxing employees.”
Finding that optimal balance between hours worked and the billable rate drives the company’s revenue projections and triggers when it needs to make staffing moves or bring on new talent.
“It’s always a game how far ahead of an opportunity you need to hire and onboard and assume that investment cost so we can have a seamless transition to new business,” she said. “So, for me, all of the metrics that drive our business growth are dependent on hours of time.”
Beyond calculating and presenting numbers to the leadership team, advising the team in the decision-making is crucial to her role as strategic partner.
“My job is to partner with people so they can understand what these levers are and work together to get to a better outcome,” she said. “It starts with informing. You need the financial data, insights, trend analyses, KPIs to prove your point. But the conversations that happen after that have to be solution-oriented.”