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Monday, August 11, 2014, 6:29 am

2014 CFO Awards: Patrick DeLong, Crimson Wine Group, Ltd.

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    Chief financial and operating officer

    2700 Napa Valley Corporate Dr., Ste. B, Napa 94558; 800-486-0503; crimsonwinegroup.com

    Employees: About 150 full time

    Professional background: Chief financial officer and chief operating officer, Crimson Wine Group, Ltd.; senior vice president and CFO, Icon Estates/Constellation Brands; senior vice president for planning and finance, Robert Mondavi Corporation; manager for port operations, Holland America Line; supervisor, Deloitte & Touche, San Francisco.

    Patrick DeLong

    I served on the board of directors for the California Polytechnic State University, San Luis Obispo, Alumni Association and in 2011 was named 2011 Alumni of the Year for the Orfalea College of Business. Additionally, I currently serve as an advisory board member for multiple wine companies and have been a frequent speaker on various wine industry business panels, including events organized by the Wine Industry Symposium Group.

    Education: B.S., business, finance and accounting, California Polytechnic University, San Luis Obispo; master’s degree in applied economics, Seattle University; graduate studies in strategic planning, University of Michigan

    Age: 49

    What do you see as the essential role of a financial leader in the current environment?: True finance leaders are the stewards of the owner’s or shareholders’ capital and understand how to assess opportunities and risk then optimize capital allocation. The ability of financial leaders to act more like investors and less like administrators while balancing the need to “mind the till” is key.

    Grounding you in the baseline are understanding true economics, what your organization does well and how to measure what success looks like — how to use the right data — as well as taking a view towards the long term. The ability to make strategic decisions to keep the direction of the company on track over time with changes in the business environment ensures the organization stays in balance.

    What are the biggest changes you’ve seen in your industry?: From a macro perspective, wine has been around for thousands of years. Optimization of quality and value has always existed economically for producers and consumers. Globally, the category has grown significantly, which has brought more capital and more sophistication.

    From a production standpoint, there is more data and understanding of growing regions and what performs best — both qualitatively and quantitatively — as well as winemaking knowledge, data, tools and equipment to make great wine. Great wine is now a baseline. From a go-to-market perspective, there is now more consumer transparency than ever.

    The wine industry has always suffered from a significant lag in sophistication, resources and talent vs. other consumer-products categories. While there is still a significant gap, consumer transparency gets everyone closer to the true economics and forces everyone to make choices about the business model.

    In the U.S., some small players understand that direct-to-consumer (DTC) sales, done well, can be a good choice. Those that work in distribution channels need to understand how and why they fit, how the economics work, what direction this could go over time and how that fits into their long-range strategy.

    Tell us about the particular challenges and opportunities your organization has met in the recent past?: We have grown our top-line financial results by more than three times in the last seven years and turned the company from losses to profits.

    However, we are still a very small company. Navigating the 2008 economic crisis while keeping an eye toward long-term growth was challenging. Aligning the right resources at the right time as we grow is a constant challenge.

    More recently, we spun off as an independent public company. This has not changed our strategic focus, but has required new ways of working with our board of directors and shareholders. Keeping a focus on our long-term strategy and operating niche is focal.

    What advice would you give to young emerging financial leaders?: Understand your business, how value is created and the true economics. Think like a long-term investor, and behave like an owner. Understand what success looks like as a leader and effective manager. You can be great with numbers but to make the really important stuff happen you will need to get your team and everyone, at every level in the organization going the right direction.

    Understand the all-in economic equation, i.e., what motivates people. This is not just about the numbers.

    What’s the best advice for weathering today’s economic environment?: Have a thorough understanding of your current economic picture, how it is impacted with up and down economic cycles and how that fits the long-term picture. Economic cycles will continue to come and go. If you are appropriately capitalized, they can provide significant strategic opportunities.

    How do you think your business will change in the next five years?: Power will continue to accrue to those closest to their consumers. Quality will continue to win in the end. The tactics of how these manifest themselves will look different — see mobile devices.

    However, from a macroeconomic standpoint, neither of these factors are new to any industry. They will continue to evolve. Having a long view of what this looks like for your company and industry will inform direction.

    What is a decision you wish you hadn’t made? What did you learn from it?: I don’t really have regrets here, as I enjoy making decisions and everything is a learning process. If anything, having more confidence earlier in my career to make more opportunistic decisions would have created even more learning opportunities.

    I follow John Wooden’s guidance here: “It’s what you learn after you know it all that really counts.”

    What is your most memorable business experience?: It’s hard to pick just one, but from a learning standpoint it was helping create a new opportunity in South America for Holland America. The passenger cruise industry is dynamic and fascinating all on its own. I was fortunate enough to help the company set up a new itinerary in new ports of call across six different countries. It was rewarding from a business, team-building, cultural and life-experience perspective.

    What is your greatest business success?: Without question, watching some of my staff and peers grow and develop into leaders. Touching others and having any kind of impact, big or small and making someone better is highly rewarding.

    What was your toughest business decision?: In several different economic cycles over time, confronting the decision of who to let go and why is challenging. However, actually letting them go is always the most difficult.

    What would your friends be surprised to find out about you?: No secrets. My friends know just about everything there is to know about me.

     Most admired businessperson outside the company: Hard to ignore the team of Warren Buffett and Charlie Munger. I’ve found many of their thoughts and opinions helpful.

    Current reading: Deep Simplicity by John Gribben

    Most want to meet: William Shakespeare would have been interesting to spend some time with.

    Stress-relievers: Working out, hiking, gardening and playing basketball.

    Favorite activities outside work: My family, travel, the garden, food and wine, hikes, just about any sport with a ball, San Francisco Giants games.

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