A Chief Monetary Officer (CFO) place carries a number of duty, and all of the extra so at a fast-paced tech firm. Startup CFOs are tasked with driving a rising enterprise in direction of success and profitability as rapidly as potential, which is actually no simple feat.
Whether or not you’re a budding entrepreneur in search of insights into this profession path, or a mid-career skilled aiming to enhance your abilities, there’s no higher method to study than to seek the advice of with a seasoned skilled. To that finish, we’ve introduced you some unique ideas from TravelPerk’s present COO and former CFO, Huw Slater (LinkedIn).
Huw’s spectacular profession spans practically twenty years, together with 10 years in finance positions at BT Group, 3 years as VP of Worldwide Finance and Operations at Field, and CFO positions at Typeform and Travelperk. To study extra about Huw and his prime ideas for startup CFOs, try his interview on Soldo’s podcast, “The CFO Playbook.”
Huw’s journey towards turning into an skilled CFO began in a stunning place: the College of Manchester’s physics division. Constructing on his lifelong curiosity in math and science, he graduated along with his BSc in Astrophysics in 2003.
So how did he shift his focus from the celebrities to the C-suite? After an opportunity encounter with a British Telecom worker and a dialog about rugby, Huw joined the corporate as a brand new graduate and kicked off his profession in finance. Starting as a Monetary Analyst, he labored his approach as much as ultimately turn into a Finance Director. Subsequently, he joined cloud content material administration firm Field as they had been increasing internationally pre-IPO. He then moved to Barcelona to take a CFO position at Typeform, earlier than turning into TravelPerk’s CFO and COO.
Whereas astrophysics and finance could appear to be very completely different topics, Huw has discovered some fascinating parallels between the 2. Each require robust analytical abilities, and the flexibility to dissect complicated details and break them down into core concepts. In addition they each contain curiosity and asking the precise questions.
In physics, velocity is the measure of each pace and path. This is applicable to enterprise as properly: to acquire outcomes, leaders must mix pace with focus. Startup CFOs are tasked with sustaining a powerful progress trajectory in a company with many transferring elements.
One other physics idea that ties in properly with an govt’s tasks is entropy: dysfunction, uncertainty, or randomness. In enterprise phrases, this implies managing the various distractions that come up day by day. Paraphrasing Steve Jobs, Huw says CFOs should “say ‘no’ to 999 good concepts, to allow them to say ‘sure’ to 1 nice one.”
How TravelPerk overcame the pandemic problem
The COVID-19 pandemic was a serious problem for firms in practically each business, and journey was notably affected. Thankfully, TravelPerk got here out robust from the pandemic, with no need to make redundancies. So how did the management crew handle this disaster?
As Huw stories it, the TravelPerk crew had scheduled a board assembly for about 10 days earlier than the primary COVID-19 lockdowns began. At that assembly, management needed to handle the unsure actuality of the pandemic at a time when few folks knew what the longer term would appear to be. They put collectively some strategic planning for various eventualities in two phases and determined to quickly reduce advertising and freeze new hires. They then agreed to offer weekly updates to board members because the state of affairs advanced, planning to make extra important cuts in two months if circumstances demanded it.
A key consideration right here was long-term considering. For instance, whereas layoffs might need eased monetary ache within the quick time period, they may have additionally harm the long-term well being of the corporate. As a substitute, the finance crew aimed to make strategic cuts in areas that represented excessive value financial savings and low impression. In addition they made some stunning selections, like doubling the dimensions of the engineering crew as an funding in future enterprise success.
In the end, the COVID-19 pandemic created a necessity for new kinds of enterprise journey. Journey-related spend tripled in 2021, and the market is anticipated to develop much more in 2022. As firms have shifted to full-time distant or hybrid fashions, there may be now extra of a necessity for inside conferences as distributed groups get collectively in individual for offsites, crew constructing actions, and extra. On this context, the way forward for TravelPerk seems to be brighter than ever.
Presently, TravelPerk is sustaining its core focus whereas creating extra partnerships with firms like Soldo (a spend administration platform with pay as you go firm playing cards). This manner, we are able to present prospects with a 360° enterprise journey provide, whereas staying true to what we do greatest. Utilizing our SaaS software program, finance groups can streamline their enterprise journey packages, gaining management and visibility over budgets whereas enterprise vacationers keep their autonomy. It’s a win-win state of affairs for everybody.
Why startup CFOs must grasp clear communication
At TravelPerk, we’re all about in-person connection and communication. That’s why it’s not stunning that Huw mentions efficient communication as one of many keys to succeeding as a CFO.
A part of this includes strategic transparency. There’s no query that transparency is essential in enterprise, and other people respect it — a Paychex survey confirmed that 83.3% of workers with very clear employers had been happy with their jobs. Nonetheless, this want for transparency doesn’t essentially apply to each single subject: the survey additionally confirmed that workers had been largely involved with points that immediately affected them.
In response to Huw, “excessive transparency” can rapidly flip right into a sequence of undesirable distractions. Whereas groups completely must learn about key points, overloading them with irrelevant info will merely waste their time. Actually efficient communication is about delivering the precise info, to the precise folks, on the proper time. Whereas this idea isn’t sophisticated, it does require dedication and work.
However, in the case of goal-setting and targets, it’s higher to err on the facet of “overcommunication”. Huw recommends a radically open and trustworthy method to sharing progress and context. This manner, groups can stay aligned and perceive why targets have been set the way in which they’re.
On a private degree, CFOs want to recollect to offer themselves the area they have to be efficient communicators. Huw likes to put aside 45 minutes of “alone time” after he comes house to chill out and rebuild his power. Nonetheless, he additionally finds that being round folks could be energizing — in the course of the lockdown, this turned particularly clear.
Setting targets and KPIs at a fast-paced tech startup
Whereas highly-ambitious targets are interesting to traders, these targets additionally have to be sensible and achievable for the crew. The aim isn’t just to get folks to the following goal, however to allow them to work sustainably with out burning out.
At TravelPerk, the manager crew meets often to brainstorm targets, then palms them off to the prolonged management crew for suggestions earlier than finalizing. Whereas it’s inevitable that targets might be missed typically, it’s vital to maintain this in verify — often lacking a goal by 10% may work out, however lacking one by 50% can be very demoralizing.
Huw believes that targets should at all times be truthful. For instance, he remembers a state of affairs in a earlier job the place workers at decrease ranges of the corporate hierarchy got extra bold targets than their seniors. They might often miss targets, inflicting them to really feel disenchanted, whereas the administration crew would obtain bonuses. To keep away from such a end result, Huw advocates for setting sensible targets throughout the group, whereas being clear with each workers and the board of administrators.
To stability achievability with ambition, TravelPerk’s management crew allocates round 10% of sources to “moonshot targets” (extremely bold, revolutionary targets) and 70% to “incremental targets” (core, routine duties of the enterprise).
Changing into a profitable CFO within the tech world
If there may be one key aim startup CFOs have, it’s this: transfer sooner with fewer sources. After all, it is a critical problem. To fulfill their aims, as we speak’s CFOs often select to spend money on software program options like TravelPerk and unencumber their workers’ time for higher-value duties.
You’re a pacesetter first, and a CFO second.
Huw Slater, COO at TravelPerk
What his assertion means is that, though CFOs are answerable for accounting capabilities, monetary planning and evaluation, metrics, and money movement administration, a CFO’s prime priorities must be communication and higher-level enterprise technique. Profitable CFOs ought to over-index on management by specializing in each crew targets and firm targets. The finance operate ought to assist the corporate’s general technique from a cooperative, fairly than confrontational, standpoint.
Huw’s closing phrases of recommendation for finance leaders are:
Run in direction of the flames… discover the toughest drawback that exists within the firm. Simply go and assist anyone, get it executed. That’s the way you develop.
Huw Slater, COO at TravelPerk