The newest member of our Women in Finance Series is Helen Riley, the Chief Financial Officer of Google ‘X’ one of the ‘emerging business’ divisions at Alphabet, the name for Google’s parent company. Alphabet’s other Emerging Business areas include Life Sciences and Robotics.
‘X’ is where many of the company’s famous (and sometimes infamous) “Moonshot” ideas are hatched- Google Glass, self-driving cars, delivery drones, giant cargo blimps, energy generating kites and even a balloon powered internet (known ironically as Project Loon).
While ‘X’ is a playground for engineers and creatives, it needs someone to account for actual shareholder money being spent on the initiatives.
Remember, Alphabet’s revenues are still dominated by advertising revenues coming from their famous search engine. This is where Ms. Riley comes in.
Helen Riley Background
To start, Ms. Riley’s academic credentials are as solid as they come. Growing up in London, she received a Master’s in Economics, Philosophy and Politics degree from the University of Oxford, one of the most prestigious universities in Britain. Ms. Riley then decided to cross the pond to broaden her education with an MBA from Harvard Business School, HBS.
In between her time at Oxford and Harvard, Ms. Riley worked as a financial analyst in the investment banking division of Morgan Stanley’s London office for approximately three years.1 After HBS, several management consulting firms began courting her talents. The top names in this field are McKinsey, PwC, Deloitte and Boston Consulting Group, simply known as BCG.
Ms. Riley chose BCG in their San Francisco Bay location, despite the company’s headquarters being so close to Harvard. She clearly had an idea that she wanted to be closer to the action in Silicon Valley. Ms. Riley served two years as a strategy consultant there before moving onto Google.
According to her LinkedIn profile page, Ms. Riley began at Google as a senior financial analyst in their Europe, Middle East, Asia Sales Finance group.2 She then moved up the ladder (and income statement) overseeing the financial duties in the General and Administrative division and then Google’s marketing division. After progressing through the ranks at Google for a total of thirteen years, she got the call to become the CFO for Google ‘X’.3
The responsibilities for being the CFO of ‘X’ include coordinating with Alphabet’s CFO, Ruth Porat, in managing risk across departments. ‘Ruthless Ruth’ as she is sometimes referred to, is a bit of a controversial figure at the company. There exists an inherent personality conflict between the free-wheeling engineers and the expense-conscious corporate finance hawks.
Also born in England, Ms. Porat is in charge of taking away the punchbowl when spending gets out of hand. Considering how well Alphabet’s stock price has performed recently (recent price of over $970 per share) I think most shareholders are supportive of her style and strategies. Employees in the emerging business segments must remember that search advertising comprises nearly 90% of Alphabet’s revenues for fiscal 2016.4
The most important responsibility Ms. Riley faces is reigning in spending in the Emerging Business areas. These so-called “Other Bets” lost roughly $3.8 billion in fiscal 2016, according to a recent Bloomberg article.5 They also note that this loss is nearly double from 2014.
Some blame overly ambitious marketing teams for some of the bad public relations. This is presumably why Google tapped Ms. Riley since she had previously worked in the Marketing department.
Optimal Resource Allocation
This is one of Miss Riley’s main job responsibilities at ‘X’ and it’s no easy task. She will need to draw upon her impeccable academic background and extensive career experience as a financial analyst and strategy consultant to determine where to put cash to work and where to reign in.
The ‘emerging projects’ could become the future growth engine so they must be smartly cultivated. Perhaps Alphabet’s Artificial Intelligence division might be an area to invest in. Recently, Dallas Mavericks owner and tech entrepreneur Marc Cuban hypothesized that the world’s first trillionaire would probably come from the AI sector. With the amount of success Mr. Cuban has had in his career, we would not bet against him or his ideas.
Alphabet’s Operation Calico has the tantalizing, yet daunting task of trying to prevent death. But it’s not just Google X that is exploring such wild ideas.
Elon Musk, the founder of three publicly-traded companies- Space X, Tesla Motors and Solar City) has led the way with wacky ideas ranging from the magnetically powered hyper loop, space travel to Mars and, in recent comments, a ‘neuralink’, essentially the connection of human brain waves and computers.6
Like story lines out of bad science fiction movies, we wonder if projects like these signal another technology or venture capital bubble? Some of the valuations are starting to cool off for some of the so-called unicorns of the venture capital space. It remains to be seen.
In addition to her roles at Google, Ms. Riley has a ‘lifelong passion for wildlife’ and has traveled around the world (over 45 countries by her count) observing them in their habitats and supporting conservation efforts. She is active in Wild Aid, a wildlife conservation non-profit based with offices in San Francisco, the U.K., China, Canada and Ecuador.7
One of the group’s main objectives is to stop the illegal wildlife trade including elephants and rhinos. Wild Aid gets plenty of coverage with its roster of high profile ‘Ambassadors’ including Sir Richard Branson, actor Leonardo DiCaprio and former NBA All-Star Selection, Yao Ming. Ming has been instrumental in helping close ivory shops and other illegal enterprises in China.
Ms. Riley serves on the Board of Directors of Wild Aid along with internet entrepreneur Xochi Birch and philanthropist (and fellow Harvard alumni) Pamela Stedman Farkas.8
We applaud Ms. Riley’s efforts in such charitable causes and can expect to see here be involved in further activities in the future. We wish Ms. Riley the best of luck at Alphabet and look forward to following her career.